The economy segment should be in for another year of outperforming the broader hotel industry, but that doesn't mean there won't be significant hurdles in 2022, said Red Roof's Senior Vice President of Revenue Generation Alex Cisneros.
Speaking with Hotel News Now during the 2021 Hotel Data Conference, Cisneros said the end of U.S. government stimulus checks could keep some people from hitting the road, although demand patterns should remain favorable.
"My expectation is that we will continue to grow," he said, noting he expects the first quarter will be slow because "we don't have the stimulus checks" from the federal government driving travel demand.
"Red Roof is in the economy segment, and I think the economy segment, in general, really benefits from consumers having that extra income to travel," he said.
Cisneros said many travelers are eager to hit the road, and economy hotels, in particular, are poised to benefit from that.
"That pent-up demand that we had this summer is still there," he said. "Not everybody took advantage of the summer, and they didn't travel where they wanted to go. Maybe they'll take a little bit longer trips [in 2022]. Short trips were really what was happening, especially on weekends. I think that's going to get extended a little bit more."
In all, Cisneros said he believes the economy segment still has "one more year" of outperformance, but the segment will have to cope with the hurdles that come with higher rates — such as higher guest expectations or being in more direct competition with higher-segmented hotels.
"One disadvantage of higher [average daily rate] is you give the consumer the ability to look at higher brands, and will they pay an extra $10, $20 to stay at a higher brand," he said. "It's because we have increased rates so much that I think we are giving the consumer the option to go to a higher brand."
For more from HNN's conversation with Alex Cisneros, watch the video above.