H&LA’s Stephen Szczygiel attended the 2022 Hunter Hotel Investment Conference, which presented outlooks from some of the largest operators, financiers, and other industry leaders. In a pleasant change from prior years, while the industry grappled with the fallout from the COVID-19 pandemic, the great majority of these perspectives were bullish on recovery. Key takeaways regarding the propensity to travel showed optimistic anticipation that corporate and group travel will continue to experience growth in 2022 and beyond. According to data from the Global Business Travel Association, 72% of businesses in the United States are currently traveling, and, among those that are not, nearly 60% intend to travel within the next three months. Compared to 2019, group travel is expected to be down approximately 20% in 2022, which is still a vast improvement from 2020 and 2021.
One emerging trend that has come from many companies providing employees with work from home opportunities is the idea of “bleisure” travel, or the notion of combining business and leisure travel. Travelers in this new segment have started to reshape weekly booking patterns at many hotel properties, with Thursday and Sunday nights outpacing the historically strong business travel nights of Monday through Wednesday. These factors contribute to what is expected to be a full recovery in ADR for most markets in 2022, but the rising consumer price index gives caution to improved profitability, as inflationary factors are still a concern.
Additional challenges discussed at the conference covered a vast array of issues, including:
- Rising fuel prices as we head into peak summer tourism months
- Repercussions that may result in the wake of Russia’s war in Ukraine
- Labor shortages and the increased competition in attracting and retaining employees
- Increasing construction costs and lead times
- General mixed sentiment on the state of the economy moving forward
Many presenters assuaged some of these concerns, citing many different factors that are impacting the industry. They discussed the historic inelasticity of demand for travel in the face of higher gas prices. They offered best practice advice on hiring, compensating, and maintaining an engaged and satisfied workforce.
The overall tone of the conference was that the worst is behind us, and, barring any major deterrents moving forward, travel is expected to return to its pre-pandemic levels by the end of 2023, with domestic leisure travel continuing to carry the market throughout 2022.
Hotel & Leisure Advisors shares the positive sentiment displayed by most at Hunter and we look forward to the best days ahead for the industry. We continue to keep our finger on the pulse of the changing dynamics and all the factors that impact the critical business decisions being made as lenders, developers, management companies, municipalities, and others emerge resiliently from this unprecedented time in history. Our team is ready to do our part to help lead the industry to a full recovery with our experience and expertise in offering appraisals, feasibility studies, impact analysis, and other consulting services.