International hotel overnights and business in Europe likely will not recover until 2024, while domestic demand will likely lead the way in 2021, as it did in 2020.

Speaking at the online Hotel Data Conference: Global Edition, Robin Rossmann, managing director of STR, said there are still moving parts, not least of which are changes to government restrictions. STR is CoStar’s hospitality analytics firm. If things become better all round in 2023, then there's reason for optimism that recovery is only seven quarters away.

“Forecasting has never been more difficult. You can look at it all very granularly, only for a new travel restriction to come into place,” he said. “We all want [recovery] to be sooner, but a lag in international travel will dampen actualized [revenue per available room]."

Rossmann said as vaccination rollouts progress in the second and third quarters of 2021, the hotel industry can expect to see a better fourth quarter, with every improvement helping to drive optimism.

In the fourth quarter of 2021, “we are forecasting 30% to 40% of 2019 occupancy and 50% to 60% of [that year’s] average daily rate,” he said, adding his optimism stems from a belief there is even more pent-up demand than has been predicted.

Nicholas Northam, executive vice president, international, at owner-operator Interstate Hotels & Resorts, said is not quite as optimistic, adding the “next 12 months is impossible.”

Cynthia Paynter, vice president of revenue management and pricing at Accor, said the uncertainty in the world has many hoteliers waiting to uncork the champagne.

“There is a lot of amalgamation happening. We can see some certainty today over the next 12 months, perhaps even the next three to six [months] dependent on vaccination programs and government lifting of restrictions,” she said.

Anders Nissen, CEO of Pandox AB, said demand exists now, but it is being held back by government restrictions.

“Not every market has the luxury of domestic travel, [but for those that do] I think domestic will remain strong even if [international] restrictions are lifted,” he said.

Paynter said guest confidence is rising as restrictions are loosened and as more vaccinations are distributed.

“Seaside, mountain, real leisure destinations, the pent-up demand for them is so great, [and guests] are finding ways of traveling today. We expect a strong summer,” she said.

Rossmann agreed but asked if there would be a sufficient supply of opened or reopened hotels to cater to it.

“There could be some upside in city demand, as the regions fill up,” he said, referring to the fact most domestic demand in 2020 targeted non-urban destinations.

Paynter said Accor is putting together unique bundles to encourage city breaks, targeting weekends.

The panelists said another source of optimism is fewer hotels closing in the second wave of lockdowns than did in the first.

Nissen said staying open either during the first lockdown or the second is critical.

“To stay open is to stay alive, and staying alive is key as it translates to communications, contacts with customers. Never close a hotel, for that is to die,” he said.

Nissen cited two Montreal properties owned by Pandox — the 595-room DoubleTree by Hilton Montreal and 357-room InterContinental Hotel Montreal — which were only two of four large hotels in the Canadian city to remain open last year. Remaining open allowed the properties to accept a piece of military business requiring 800 rooms, he added.

Rossmann said the data showed that hotels that stayed open outperformed those that reopened later.

That has "carried on all the way through to February,” he said.

Nissen said that the difference in the cost of closing including continued security and maintenance expenses versus the cost of opening with limited services is not huge. He said recovery from the pandemic is replicating recovery from the Great Financial Crisis, even if declines are larger now than they were then.

Whether hotels stayed opened, reopened or are due to open, cleanliness is the main point of leverage, not rates, Paynter said. She added Accor has made a push to open new properties as demand starts to revamp.

“Price is a lever, but cleanliness is the key conversation, and all the major companies have spent a lot of money on this,” she said.

“Consumer confidence that hotels are a safe place to stay is critical, as there is not this assurance in alternative accommodation,” Northam said, who added he saw no reason why groups and events with domestic demand cannot go ahead.

Nissen added that this is more so the case now that technology means guests do not have to meet staff.

“We have learned a lot [about IT] this year, and we realize we can do it all more efficiently,” he said.

Rossmann said that the numbers showed that short-term accommodations such as serviced apartments has seen demand rise faster than hotels.

“Stays [in short-term accommodations] have gone up from three days to five [to] eight, and there is a missed opportunity for [hotels] there,” he said.

One European market heavily reliant on group and events is Germany, panelists said, but it is probably the case that medium-sized events will come back before larger ones.

Rossmann said group demand in Germany, Austria and Switzerland is significant and some countries are a bit more open to travelers, such as Russia.

Groups are even returning to Interstate's hotels in Russia, Northam said.

“[Interstate] has a dozen or so hotels in central Moscow, and we are now well over 50% occupancy, and we are seeing group business return. Only 5% of the population are vaccinated, but you can travel within Russia,” Northam said.