Cause for Optimism in Hospitality During COVID-19


I am forever an optimist.  Through these rose-colored glasses, I am starting to see signs of hope for the hospitality industry during the COVID-19 crisis.  None of this is to discount the important moments and movements happening in this country and worldwide, or to understate the fact that nobody knows what the future months hold.  That said, recent metrics both published and in my internal diagnostics have picked me up off the floor and encouraged me to dig back in, start to sell again, start to market again.

I had a growing sense of optimism slow-boiling below the surface for a month or so when, last Friday, I watched the ever-popular Today Show travel segment.  Airbnb reported that May 17- June 3, 2020 bookings exceeded bookings from May 17 - June 3, 2019.

Stop.  Rewind.  I was focused on other things and not really paying attention.  I could have misheard that.  Play.  (3:45)  

Smith Travel Research reports that nationwide occupancies knocked on the door of 40% in the last week (39.3%).  Another eye-popping number; NYC occupancy for the week was 47.1%.  Seriously?  After everything that the city has been through over the past three months, it is encouraging to see the very early signs of recovery in the data.  

Last week, the California Hotel and Lodging Association sent an email providing guidance to their members.  The state had “released new guidance for the lodging industry stating that individual/leisure travel can start next Friday on June 12.”

We have also been looking at our own proprietary internal data.  The company has the benefit of looking across our portfolio and picking out trends as they emerge.  The data proves that the bottom in hotel demand is well behind us, and as an industry, we are gaining steam in a recovery.  Demand is returning, though it is a fickle creature.  

Never one to be interested in feckless debates about whether people “should” be traveling, whether hotels and restaurants should be open during a pandemic or speculating whether COVID related travel pullbacks will occur in the near future, I have always instead focused on consumer behavior.  Ultimately, travelers are our true north, and it's clear to me that travelers are restless.  Every hotel occupancy trend line I review, most markets I study, shows a slow, steady march towards recovery led by those restless globetrotters we all love.  The wanderlust runs deep in this country!

Every market is not favored by this trend, and if you are operating a hotel in Downtown LA, for example, there aren’t enough travelers to support a property.  However, if you are open, and in a favored area, market to those journey-bound optimists.  There is an opportunity to compete for room nights.  Don’t make the mistake of assuming that just because you are open they will find you, and choose you.  Tell them a story.  Inspire them.  Help them achieve what they seek; escape.   

On this, the data is clear.  Just look at the Cornell study from the last travel recession.  Those who adopted a bunker mentality and waited on the sideline for the bad times to pass lost market share to their competition.  Those who came out and tried to steal occupancy (and save money) by slashing their rates as their primary strategy did long term damage to their rate integrity, and to their brand.  

I suggest a different path.  Watch the data, talk to your neighbors.  As soon as you get the inkling that demand is beginning to return to your market; pounce.  Better yet, be there before the demand starts to tick up.  If you’re struggling to find room in your budget to get help on your marketing, check out our performance-based model.  Focus on the leisure travelers instead of screaming to anyone within shouting distance that you are open.  Leisure guests will drive the early days of demand’s return.  Yes, I know optimism is subjective, but the data is not.