The "unstoppable" Americans made hotel room reservations nervous again.
According to the latest forecasts from the World Travel and Tourism Council, tourism demand will be high this year, and the UNITED's gross domestic product (GDP) contribution to global tourism revenue is expected to exceed pre-pandemic levels and 6% more than in 2019. A survey of 12,000 travelers in 12 countries, including the United States, by online travel company Expedia, showed that more than two-thirds of respondents plan to "do big" on their next trip.
The hospitality industry news shows that potential travelers have moved. Hyatt Regency, a hotel group group, said bookings for group events in January were 14 percent higher than in the same period in 2019, surpassing pre-pandemic levels for the first time since the outbreak. Airbnb, a global homestay short-term rental apartment booking platform, also wrote in a recent earnings report that it expects bookings to exceed pre-pandemic levels for the first time in the quarter ending March 31.
Oxford Economics, in a report for the American Hotel and Lodging Association, expects U.S. hotel gross bookings this year to be almost equal to 2019 levels.
Irene Tunkel, chief strategist of the US asset strategy department of investment consulting firm BCA Research, told the first financial reporter a few days ago that the hotel industry belongs to the cyclical industry, and this year's cyclical stocks are more optimistic. "The reason I'm bullish on the consumer services industry is that demand is very depressed, so all the travel portfolios, such as aviation, hospitality, restaurants and cruise ships, have been hit a bit in the previous correction, and I think there is room for rebound in the market now." "A lot of people sitting at home can't wait to get on a plane and travel," she said.
As of Feb. 17, the S&P 500 Hotels, Resorts and Cruises Index rose 31.56% in one year and has fully recovered to its level of early January 2020.
Demand exploded and prices rebounded
This week, Hilton Global Holdings reported quarterly profit and revenue higher than analysts expected, with occupancy rose to 61.3 percent in the fourth quarter from 20.7 percent in the same period last year, resulting in comparable revenue per available room (RevPAR) of $84.14, a quarterly revenue that nearly doubled to $1.84 billion.
Marriott International also performed exceptionally well in the quarter, with occupancy rates in the U.S. and Canada jumping to 60 percent from 35.1 percent in the year-ago quarter. Marriott CEO Anthony Capuano told investors that demand for group event bookings in the U.S. has been strong as the number of cases infected by the Aumechjong strain has declined. Wynn Resorts CEO Craig Billings revealed that customers of its Las Vegas resort are "retaliating again."
Hilton CEO Christopher Nassetta told investors that business disruption from the Olmiqueron strain could essentially be contained in the first quarter of 2022, while most group events were rescheduled later this year. Bookings for group businesses will accelerate for the remainder of 2022.
"2021 is the year of recovery, and 2022 will surpass the pre-pandemic and become a strong growth year for the industry," said Jamie Lane, vice president of research at vacation rental research firm AirDNA, which recorded about 58,000 new short-term rentals being booked in January, the largest increase since the pandemic began, and that number is growing every day. The company's data also shows that the number of short-term rental nights booked in the U.S. in January 2022 increased by 35% compared to the same period in 2019, and increased by 12% globally compared to 2019.
Expedia's report this month also said that bookings have "rebounded strongly" this year. Prices have followed, with prices for food (+10 percent), hotels (+13.3 percent) and car fuel (+26.6 percent) all up compared to 2019, according to the American Tourism Association's recent Travel Price Index.
According to travel booking app Hopper's Consumer Ticket Index, airfare prices in January were 18 percent cheaper than pre-pandemic prices but are expected to rise, with airfares expected to increase by 7% per month and international flights by 5% per month by June. Consumer prices such as hotels are also affected by inflation and labor shortages, meaning prices could rise further as demand for travel grows.
The hospitality industry is catering to the demands of leisure tourism
Mark Hoplamazian, chief executive of Hyatt, said that although the spread of the Olmikron strain at the beginning of the year led to the cancellation of many hotel reservations, the total was still considerable and "demand was clearly suppressed." "There is strong and very clear evidence that group travel is on the eve of a significant surge and we have more booking and cashing out business in the fourth quarter of 2021 than in the fourth quarter of 2019," he said.
Some analysts believe that as business travel picks up this year, companies such as hotel chains, Expedia and hotel booking platform Booking will also benefit. However, the Oxford Economics report shows that travelers who travel for leisure tourism are still the main force. Hopra Mazan said the slowest recovery in the market was among individual business travelers, with demand recovering only to 45 percent of 2019 levels.
Thanks to the popularity of leisure travel, both Marriott and Hilton Hotels & Resorts released earnings results this week that exceeded expectations. Airbnb also said people are already booking summer stays. As of the end of January, the number of booked overnight stays for this summer trip increased by more than 25% compared to the same period in 2019.
Hyatt hotels acquired luxury resort hotel company Apple Leisure Group (ALG) last year, where leisure hotels now account for more than half of ALG's portfolio, compared with about 45% before the pandemic. Hopramazan said the acquisition was due to "a real explosion of leisure demand in the second half of last year." As the middle class in developing countries becomes richer, he said, leisure travel is likely to continue to outpace business travel in the future.
In addition, after the epidemic, tourists' travel destinations have gradually shifted from large cities to remote areas, and now they are beginning to return to large cities. According to the AirDNA that analyzes the short-term rental market, holiday rental bookings in small cities and resorts increased by 30% to 60% in 2021 compared to 2019, but rentals in large cities fell by about 25%. But travel booking site Skyscanner says New York City is its most booked U.S. domestic destination so far in 2022. People's searches for New York City on Expedia increased by 13 percent.