NYU: INDUSTRY CELEBRATES RETURN OF INTERNATIONAL TRAVELERS

Hotelsmag.com

By: Jeff Weinstein

Symbolically so, the 43rd annual NYU Hospitality Industry Investment Conference opened Monday on the same day international travelers started to return to the U.S. That milestone served as a backdrop for the opening sessions, with industry leaders lauding the opportunity to further drive the recovery.

Loews Hotels & Co. Chairman and CEO Jonathon Tisch opened the event, attended by some 1,100 people, noting international flight bookings to the U.S. have already reached 70% of pre-pandemic levels. “Domestic leisure travel has already come back strong – exceeding pre-pandemic levels in recent months. International travelers are eager to return to our country and we are ready to welcome them,” Tisch said.

When the CEOs took the stage, they reveled in the tremendous demand expected from international inbound travelers. “They are anxious to come to States, including business travel,” said Marriott International CEO Tony Capuano, who added that the U.S. waited too long to reopen its borders.

Hilton CEO Chris Nassetta said that as the U.S. hotel industry moves toward 2022, business will boom. “We will surprise ourselves,” he said. “We have underestimated what will happen. Leisure remains strong even into fall – it’s raging. We are running 80% to 85% on weekends. Group business has been pushed back due to the Delta variant, but demand and inquiry is off the charts. Eventually, it will be better than ever – both social groups and business meetings. In quarters two, three and four of 2022, we will see a huge uplift in meetings business. In a few years, all segments will be above where they were.”

Nassetta continued, “It’s a fool’s errand to prognosticate when you are at or near the bottom. Things will largely look like they did when we get to other side.”

Accor’s Sebastien Bazin said business travel is back in Europe, adding that international flights are packed coming to America. More generally, Bazin said the business recovery in Europe is running nine to 12 months behind the U.S. “I need Americans to come my way and we are also missing the Chinese. We need the Chinese to travel again.”
IHG Hotels & Resorts CEO Keith Barr said the return of international travelers to the U.S. will be great for struggling urban centers, as suburban markets are already running at close to normal business levels.

BWH Hotel Group CEO David Konga did sound a note of concern, saying it remains troubling that too many offices are not opening and will continue to hurt corporate business.

In response to the ongoing labor challenge, Bazin said the industry does not yet have the recipe for success. “We need to fix it. We need to offer a better sense of purpose. There is nothing worse than having great demand and an inability to serve.”

Barr said part of the solution is retraining the customer about service levels, especially when it comes to daily housekeeping.

Heard around the conference: Will management companies start to build minimum fees into contracts? Some say it is already starting to happen. For those representing owners, that move should mean managers putting equity into new deals as well as writing easier termination language. Management companies will have to give something for guarantees.

When asked to prognosticate a year out, Barr said record RevPAR in U.S. will come in 2Q22; Capuano said business transient will shock to the upside; Kong said the fundamentals of the U.S. economy are very strong and now the medical options to treat the coronavirus bodes well and next year will be a banner year; and Nassetta put a cherry on the top of the forecast by stating 3Q22 globally (maybe not evenly) will eclipse 2019 performance.