ATLANTA — U.S. hotel demand among both business travel and leisure travel has been steady despite a lot of recent economic uncertainty.
Kerry Ranson, president of operations and partner at Raines, a South Carolina-based hotel operator with more than 50 hotels in its management portfolio, shared his observations about hotel demand trends during a video interview at the recent Hunter Hotel Investment Conference.
Overall, hotel demand among corporate groups and business travelers has been consistent, Ranson said. For now, groups are still traveling for meetings and events and haven't canceled their travel plans.
"It's surprising, because I've got several peers [I talk to] to share information with one another about 'How's business, what are you doing, how are things going?'" Ranson said. "And several of us, overarchingly, have discussed the fact that it's been pretty steady. Now, there are some of the markets out there that are maybe showing some slippage, that are government-based businesses and things like that. But holistically, with our markets and where we are and some of my peers, it's been steady."
So far, Raines hasn't noticed any declines in leisure demand across its hotel portfolio either. Notably, there's been an increase in bookings this year ahead of the summer travel season, Ranson said.
Potential concerns center around leisure booking pace and whether it will continue at a steady pace or settle down.
"In this environment, we'll more than likely see some settling," Ranson said. "But I'll be honest, if I go to our seasonal markets for beachside locations, we're seeing better pick-up than we saw last year."
In 2024, Raines added 23 hotels to its management portfolio, Ranson said. A bulk of those hotels came via a deal last summer, when Raines announced a joint venture with Dallas-based Atlantic Hotels Group to manage 16 hotels in Texas.
In March 2023, Raines acquired HP Hotels, a full-service, third-party hotel operator where Ranson was co-founder and CEO. In the two years since the deal, Ranson said merging the two companies' cultures was the easy part.
"We looked at it and said this isn't about bringing in middle-of-the-page efficiencies. This is about how do we take human capital to make us do what we do really well and continue to grow? And that's what it was," Ranson said. "And because the teams have come together and they're all working together and recognize a bigger goal of where we're wanting to head, it's probably made it easier. But I think it speaks to the two companies' culture, because that's been the easiest."
Labor challenges easing
Even before the pandemic, the U.S. hotel industry was short on employees. Then, as the world shut down in 2020 and travel demand plummeted, hotels were forced to furlough or lay off workers and try to operate with leaner staffing models. The good news is that it's getting easier to fill open hotel positions, Ranson said.
"The last quarter of last year, we filled positions faster than we had filled for the previous two years. ... We're not fully back, but ... it's easier, a little bit easier, to get candidates and fill the positions a whole lot faster," he said.
There could be opportunities for hotel companies to hire more workers that have recently been laid off, such as in government and tech jobs.
"You've got what are some potential challenges on the horizon with the change in administration and what's happening," Ranson said. "So does that end up putting skill sets back into hospitality that may have been in government sectors and things like that?"
For more insights from Raines' Kerry Ranson, watch the video embedded above.