Again, despite the travel and tourism industry stocks rising on stimulus/vaccine news, the rebound will be long and slow.
In November, revenue per available room – a key measure of the hotel industry’s financial well-being – was half of what it was a year earlier, according to S&P Global Ratings.
In 2021, the number will improve but still will remain 20 to 30 percent below 2019’s average, S&P said, and predicted the hotel industry will not approach stable, improved booking levels until 2023.
Pleasure travel will slowly bounce back this summer, but business travel – the foundation of profits for many inns and airlines – likely will never return to previous levels now that companies have learned the efficacy of online meetings.
Executives who once traveled “are going to say, ‘Do I need my employer to spend money on this? Can we do this over a phone call? Can we do this over Zoom?’,” Michael Bellisario, lodging analyst at Robert W. Baird, said to the Wall Street Journal.
Business travelers have virtually disappeared, Nayan Patel, who owns seven hotels in Washington, D.C., told the Journal. He recently closed one of his properties because it was averaging just two or three bookings a night.
“If you look at our numbers,” he said, “they’re abysmal.” He expects them to remain that way this year. “If you look at the calendar” for 2021 “for the convention center in D.C., it’s empty,” Mr. Patel complained.
TREND FORECAST: The enduring lockdown restrictions will continue to keep most potential travelers at home for at least the next few months, which will throw more hotels into insolvency. And, as with other sectors, the Bigs will buy out the smalls.
