Re-Opening The Borders
The good news for the industry is that hotel performance in the U.S. is clearly beginning to pick up as we approach the spring season. In the week ending March 13, STR reported the best results since the pandemic began with U.S. hotel industry RevPAR of $53.45—a decline of only 15.8% from the same week in 2020.
Naturally, the expectation is that the RevPAR and occupancy numbers for 2021 should continue to increase and significantly outpace last year’s paltry numbers going forward. The driving force right now for any measure of recovery has been and continues to be leisure demand. While group bookings continue to be way down they will eventually aid in a recovery, but there is another piece of the puzzle that needs to be solved before the industry can hope to fully bounce back: international business.
In recognition of that—and the many other U.S. industries reliant on international travel—the U.S. travel and aviation industry earlier this week called on the Biden administration to set a deadline of May 1 to commit to a plan for reopening the country to inbound international visitors. The U.S. Travel Association is among the 26 organizations to sign the letter.
“Travel and tourism is the industry hardest hit by the economic fallout of COVID, and the damage is so severe that a broader economic recovery will stall if we can’t get travel off the ground,” said Roger Dow, president and CEO, U.S. Travel Association, in a statement. “Fortunately, enough progress has been made on the health front that a rebound for domestic leisure travel looks possible this year, but that alone won’t get the job done. A full travel recovery will depend on reopening international markets, and we must also contend with the challenge of reviving business travel.”
To underscore that point the letter to the White house points out that in 2020 international arrivals to the U.S. fell 62 percent from Mexico versus the previous year, 77 percent from Canada, and 81 percent from overseas markets, for a total loss to the U.S. economy of $146 billion last year.
According to USTA, if nothing is done to lift international travel bans and bring back demand a total of 1.1 million American jobs will not be restored and $262 billion in export spending will be lost by the end of 2021.
Of course, there are plenty of concerns when it comes to opening the borders as certain areas of the world, like Europe, have recently seen spikes in the virus. But certainly the number of those willing to travel internationally is likely to be considerably less than ‘normal.’ In fact, many international travelers may still be reluctant to come to the U.S. for quite some time so an expected flood of international visitors is highly unlikely to occur.
Even in the best-case scenario if a plan is in place by May 1 it’s not likely that we will see meaningful international travel until the back half of 2021 at the earliest. Nevertheless, it is no less critical for the industry to make sure that the U.S. borders are opened sooner than later and we can take yet another step towards a recovery.