LOS ANGELES — The ongoing recovery of hotel performance in the U.S. has given industry leaders a renewed sense of optimism for future growth.

During the “Boardroom Outlook: Assets — Positioning for Growth” session of the Americas Lodging Investment Summit, hotel executives spoke about plans to expand their companies and the factors driving that growth.

Leisure travel is what will fuel Wyndham Hotels & Resorts’ growth, President and CEO Geoff Ballotti said, noting the company recorded the highest average daily rates ever for the last two weeks of December.

“For our segments, the economy drive-to and midscale drive-to markets, that growth has not slowed down,” he said.

The blending of business and leisure travel will continue, he said. Rates are rising, hotels have pricing power, and the average length of stay continues to extend. That’s a sign for owners of economy and midscale hotels of a great spring, summer and fall ahead, he said.

Choice Hotels International President and CEO Pat Pacious said trends that have accelerated leisure demand through the pandemic include baby boomers and others retiring, as well as the success of "side businesses" and stock portfolios.

The labor-force-participation rate looks like it did in the 1970s as a result of retirements, difficulty around childcare and a lack of positive immigration, he said.

“I think you’re going to have fewer workers. What are those people going to do? They’ve got time to travel during the middle of the week. They’ve got time to travel on the weekend. That’s going to continue,” he said. “We've seen road trips and domestic travel increasing for the past five years. The pandemic only accelerated that.”

Marriott International President Stephanie Linnartz said the company's leisure hotel bookings returned to 2019 levels in 2021.

Many thought individual business travelers would come back before groups and meetings, but meetings have come back quicker, she said.

“We’re quite bullish about the outlook for group heading into the next several years,” she said. “I do think that the business traveler will come back, but everyone’s talking about leisure. It’s worth underscoring that leisure as segment is actually four times the size of business, the actual segment size, and it was growing at a faster pace, even pre-COVID.”

While the omicron variant has pushed out some group business, Aimbridge Hospitality President and CEO Mike Deitemeyer said for his company those bookings are only being delayed a month or two, with 87% of groups moving from January to February and March.

He said he was in London when the United Kingdom was getting ready to initiate its most recent lockdown, and two weeks after Christmas, hotels were open and bookings were taking off.

“There’s resiliency,” he said.

For full-year 2021, Aimbridge signed management agreements with 1,517 hotels, some through mergers and acquisitions, Deitemeyer said. The company acquired Prism Hotels & Resorts as well as Grupo Hotelero Prisma in Mexico and acquired the management contracts of 27 hotels from NewcrestImage.

“We see a bigger opportunity for the Asian community to get more engaged and provide the next evolution of what hotel ownership, management and family investing looks like,” he said.

The company continues to pursue expansion outside of the U.S., particularly in Mexico, which has been underserved in the third-party operator market, he said, noting that in addition to organic growth, there are opportunities for two or three strategic mergers and acquisitions.

Marriott signed 599 deals last year to add 92,000 rooms to its portfolio, Linnartz said. The company has expanded into other areas over the years to strengthen its loyalty program, Marriott Bonvoy, including the launch of its home rental program, Homes & Villas, which has grown to nearly 50,000 offerings.

“We have every brand you could want, and we're everywhere you want to be and take those points and redeem them for some of these fabulous, in many cases, leisure offerings. It's ... building an ecosystem around a Marriott Bonvoy program — but again, all in service of our core hotel business,” she said.

Wyndham's Ballotti said loyalty programs thrive on aspiration, which for a hotel company means offering guests aspirational places to stay.

The company's Registry Collection brand has existed for 15 years with 250 luxury resorts around the world, he said. The company recently signed a deal with Playa Hotels & Resorts for its new all-inclusive upper-midscale Alltra brand.

Choice Hotels has invested in the extended-stay hotel segment, which has also paid off during the pandemic. Two years ago, the company broke ground on its first Everhome extended-stay hotel property, Pacious said.

“The extended-stay segment just wherever it was has done exceptionally well,” he said, noting that demand for extended-stay roomnights in 2019 was double the purpose-built supply.

Marriott added more than 90,000 rooms to its portfolio last year, and more than 50% were outside of the U.S., Linnartz said. Conversions have played a large part in the company’s growth in the U.S. and globally, representing about 27% of signings last year, largely in its soft-brand collections.

Luxury has also been a been an area of growth for Marriott. The company has about 500 luxury hotels at the moment and signed 40 luxury deals last year, with many of them outside the U.S., Linnartz said.

Aimbridge’s Deitemeyer said the company has 150 properties in Europe and is focused on markets such as Spain and Portugal.

The Middle East is another underserved market with lots of recent transitions in ownership and brands, he said.

What has worked well for Aimbridge when entering new markets is using strategic mergers and acquisitions or putting together portfolio opportunities, Deitemeyer said.

Twenty years ago, Wyndham made deals with three development partners in China and allowed them to license the Days Inn, Super 8 and Howard Johnson brands, Ballotti said. Wyndham’s comfort level there has continued to grow, allowing it to expand its team in China and sell 10 of its brands directly, he said.

Choice Hotels' franchising model has been key to its growth strategy in Europe, focusing on markets where small business owners can aggregate capital and buy land, Pacious said.

“Europe is probably our key focus right now outside of the U.S.,” he said.

The company has done well in Australia and is pursuing growth in key markets across Mexico and Latin America.

“When you move to those markets, you’ve got to have this sort of flexibility within a framework to adapt your brands to each market,” Pacious said.

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