For hotels, leisure travel is roaring back
It’s been a little while since we’ve checked in on the hotel industry — one of the sectors that were hit hardest by the pandemic. Fast-forward to today, and things look a lot different.
Hotel chain Marriott said Wednesday morning that profits more than doubled from the same time a year ago. Earnings were up at Hilton as well.
“What we’re seeing from leisure has really gotten back to 2019 levels,” said Leeny Oberg, Marriott International’s chief financial officer.
That’s partly because many people have built up a lot in savings. Plus, flexible work policies have made it easier for people to extend their vacations and do a little work from the comfort of their hotel rooms, said Rich Hightower at Evercore ISI.
“You know, kind of blending business travel and leisure, midweek to weekend,” he said.
Business travel itself has been picking up too — but more slowly. Many corporations are still hesitant to send employees out on work trips, Hightower said. “I think a lot of that has to do, obviously, with the recovery coming out of the pandemic, and concerns around workers’ health being on the road and that duty of care.”
That means a lot of hotel conference rooms are sitting empty.
“Those are great pieces of business for us,” said Lynn Mohrfeld, who heads the California Hotel & Lodging Association.
Leisure travelers tend to spend their money outside the hotel, he said, whereas business travelers usually spend more where they’re lodged.
“That’s due to the meeting rooms, the dining. They come in for two or three days, utilize the hotel’s services very heavily,” Mohrfeld said.
Business conferences and meetings tend to happen in bigger cities, Mohrfeld added, meaning that hotels in urban areas are struggling the most.
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