Highlights from the Bring It On Webcast: August 18, 2021
For the better part of four decades, STR has shaped the industry and how we make decisions. It is the data standard for the hospitality industry and Carter Wilson, Senior Vice President of Consulting, STR, joined Kristi White for an in-depth conversation about where we are and where the industry is going for the remainder of 2021.
At this year’s hybrid Hotel Data Conference (HDC) in Nashville, STR provided new insights into market performance and forecasts for the rest of 2021. Kristi dug deeper into these insights with special guest, Carter.
Three important insights from this conversation:
- Market recovery leaders – Carter mentioned that it’s no surprise that those hotels in sunshine/beach destinations that have had lax mask rules are doing well. Many hotels in the Florida market are at the top of the list and are above and beyond where they were in 2019. Kristi sees some markets in California destination cities are also recovering. They both agreed that the leisure demand will slow down after the summer winds down, and certainly these markets can’t survive in perpetuity on leisure. Expectations are that business travel and small groups will kick in after Labor Day. Both agreed that we don’t know what will happen in the next three months, and certainly the Delta variant could change things, but RevPAR is about where it was in 2019 for some markets. The best advice is to get comfortable with change and be prepared to manage through it.
- Which markets aren’t recovering – Until we see market inroads with group and corporate travel, many Top-25 markets and international gateways cities will continue to lag. It’s no surprise that these non-leisure destination cities are still struggling, including Boston, Chicago, New York, San Francisco, and Washington D.C. because of their dependence on convention demand and international tourism. Carter noted that when STR indexes everything to 2019 and puts them into buckets, less than 50% of RevPAR is in a depression phase. San Francisco and San Mateo are last, with New York coming in sixth from the bottom.
- Measuring from the Chain Scale perspective – Carter said that economy hotels are “crushing it.” Nationally, they never entered the depression zone, but he cautioned that this could also be a result of summer travel. Mid-scale and upper mid-scale have recovered, but upper-upscale and luxury are only at 60% of RevPAR. He noted that ADR is doing great for luxury, but the demand isn’t there. The pre-pandemic business mix was around 65% transient demand and 35% group. Now its 90% transient and 10% group. The shift to higher rates is because of this. Hotels still need group demand; the ancillary spend is huge. As things get better, we will begin to see a softening of the rates, but for now, without the ancillary spend, the hotels have to charge more to remain viable.
Overall, the conversation was positive about the remainder of 2021 with caveats on the changing status of the Delta variant. One common piece of advice for hoteliers is to know your niche and be prepared to pivot based on changing market conditions. Proactively providing what your guests, corporate travelers and planners need to feel safe and well served results in confidence and loyalty that is the key to success during uncertain times.
The two discussed a wide range of trends and their impact for the rest of 2021 and broke down a lot of the data that was announced at HDC. Listen in to hear more!
BONUS: Don’t forget to check out the latest book by our guest and award-winning author, Carter Wilson. See his new psychological thriller here.
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