The Road To Recovery
With occupancy on the rise for the past few weeks following unprecedented lows, the consensus from a number of leading industry executives is that the recovery has indeed begun in the U.S. with drive-to markets leading the way.
During a virtual session entitled “ALIS 6 X 8: Recovery Top Of Mind,” the C-level execs did acknowledge there was nowhere to go but up with some markets having been in the single digits in terms of occupancy. From a longer-term perspective, most participants noted that they don’t expect a full recovery to 2019 levels until around 2023.
Arne Sorenson, CEO, Marriott International, expressed a degree of optimism while citing an uptick over the past 5 or 6 weeks. “We see occupancy building week over week and what’s happening is leisure and drive-to first. People are getting back out because; a) they can; and b) they’re dying to get back out…That recovery will continue as long as states continue to ease restrictions. It will continue as long as the virus does not reverse and come back in bigger numbers,” he said.
Mark Woodworth, CEO, RM Woodworth & Associates, reinforced the point. “We’re selling more rooms this week then we did last week and the pricing in a number of markets is getting better. Those are clear signals that we’ve bounced off the bottom,” he said.
But a couple of the executives provided some perspective and a dose of reality while emphasizing it is still an uphill climb. “You can always say anytime you’re moving upwards it’s a recovery but you also have to recognize where you are. Things are looking better but we’re still in a very rough place and I don’t want lawmakers or policymakers to misunderstand where we are. Help is needed today, tomorrow and for the foreseeable future,” said Chip Rogers, CEO, AHLA.
Mit Shah, CEO, Noble Investment Group, furthered the point. “Of course the weekly stats will tell us that things are getting less bad, but it [a full recovery] is going to take some time,” he noted.
According to Mark Elliott, president, Hodges Ward Elliott, “We’ve definitely started the recovery just by definition. Occupancies are higher now than they were a month ago and more hotels are open today than a month ago. However, it’s going to be a slog until there’s a vaccine or herd immunity.”
Dave Johnson, Chairman and CEO, Aimbridge Hospitality, also emphasized the importance of a vaccine in the recovery process. “It’s going to take time but I think the rebound has started. Is it a hockey stick recovery, a ‘w’ recovery or a ‘u’ shaped recovery? The interesting thing is I don’t think we really know because the wild card in this whole thing is science. If we have a vaccine by the end of year it will be a hockey shaped recovery. People want to get back on planes, they want to travel but they just don’t feel safe. We’ve got this wild card of science to really accelerate a recovery,” he said.
Woodworth, meanwhile, shifted the focus on the industry’s prospects from a longer-term perspective. “How long is the path to recovery; is it 12 months, 18 months, or 36 months? I think the most likely scenario does point to 2023 as the point in time where we get at least the RevPAR levels back to where we were in 2019. If we’re lucky, if we get a vaccine and as consumers we continue to behave in a more responsible way that mitigates the spread of the pandemic, than those things would all auger towards a quicker recovery,” he said.
Shah referenced some of the baseball analogies the industry has always used. “What inning are we in? We really do not know, we just know that it’s going to be long. I do believe in the benefit of having an industry that is more together than it ever has been to fight all this together. We’re going to have a therapeutic, we’re going to have a vaccine, we will leave our homes and we are going to travel again. This industry is going to be back, it is just going to take some time,” he concluded.