Reporting from the Hotel Data Conference in Nashville, Hotel News Now provided some insight into hoteliers’ thoughts on the lingering concerns of a recession as industry performance metrics continue to show improvement across the board.
Published by: Robert McCune, Bryan Wroten, Dana Miller and Trevor Simpson/Hotel News Now
Published date: August 2023
NASHVILLE, Tennessee — Economists and analysts have been pushing back predictions and stretching out timelines for a recession. Most thought the U.S. economy would be in one by now, and a few have changed their minds completely, calling what’s ahead a “soft landing,” rather than a recession.
Adam Sacks, president of Tourism Economics, isn’t one of those few.
During the opening general session of the 15th Annual Hotel Data Conference, Sacks said he still expects the economy to go into recession later this year or next. He just thinks it will be so mild that no one, at least in the travel and hospitality industry, is likely to notice much.
Tourism Economics partners with CoStar hospitality analytics division STR to forecast hotel industry performance, and the latest edition of that forecast has key performance indicators improving across the board, though lower growth is expected — in every hotel chain scale from economy to luxury — through 2024.
Hotel performance will continue to improve, even in a mild recession, because there is still desire to travel — for leisure and business — and international travelers who so far have stayed away will eventually return to the U.S., Sacks said.
But there are still some nagging concerns, according to Jan Freitag, CoStar’s national director of hospitality market analytics. Those include plummeting office leases and office use as companies continue to embrace at least hybrid in-office and work-from-home policies.
“Outside of those of you who are in the office five days [a week], bless you, but are we back in the office ever again on Friday? I’m not sure. And I really think that’s going to hurt us with occupancy,” he said during a presentation on factors beyond the usual KPIs that are at play.
Freitag also said he doesn’t expect a quick return of international travelers, especially not from China, to the U.S.
Everyone’s “like, look, they’re going to come back” to the U.S., he said. “But if you have a budget for 2023, early 2024 for the return of the Chinese traveler, I don’t think so. Because as long as the Russian air space is closed, it’s really hard to get here.”
On the first day of the Hotel Data Conference, much time was devoted to reconciling continued optimism for travel and hotels with a murkier future view of the economy.
— Robert McCune, senior managing editor