(Corrected on May 2 to update the source of the extended-stay data to solely The Highland Group.)
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1. Accor Reports Demand Rebound Despite Lack of International Travel
Executives at Paris-based Accor say lots of travelers are hitting the road while staying in their home countries, HNN's Terence Baker reports. During the company's first quarter earnings call, Chief Financial Officer and Deputy CEO Jean-Jacques Morin said the company is expecting an exceptionally strong summer with domestic demand returning to 2019 levels.
Demand in China, though, remains a sore spot.
“Shanghai is closed down, and 70 million people are shut down,” he said. “No one can foresee when China will reopen, and every statement out of China clearly shows that there is to be no short-term change to its policy of restrictions."
2. Consumer Spending Up 1.1% in March
Commerce Department data showed personal consumption went up a seasonally adjusted 1.1% in the U.S. for March, with travel and dining a big contributor to that increase, The Wall Street Journal reports. Strong spending is what gives some economists hope that the country will avoid a recession despite a GDP contraction in the first quarter.
"We think consumers are going to continue to rotate more toward services spending,” said Kathy Bostjancic, chief U.S. economist at Oxford Economics.
3. Frustration Over Chinese Lockdowns Boils Over
As noted by Accor, major Chinese markets including Beijing and Shanghai continue to face lockdowns and restrictions, which Reuters reports is creating increasing frustration and protests in the country.
The news outlet reports in Shanghai "fenced-in people have been protesting against the lockdown and difficulties in obtaining provisions by banging on pots and pans in the evenings," according to a Reuters witness and residents.
4. Extended-Stay Rates Grow as Supply Growth Drops
The Highland Group noted a 30% year-over-year increase in average daily rate for U.S. extended-stay hotels in March while supply growth fell to an eight-year low.
This marked the third consecutive month of accelerating ADR growth in the segment.
“Extended-stay hotel growth in demand and ADR are expected to moderate over the near term but with supply increases at an eight-year low, the outlook for strong gains in RevPAR remains very good” Mark Skinner, partner at The Highland Group, said.
5. Employment Struggles Continue as Travel Rebound Gains Steam
Hanging over otherwise sunny projections for a strong summer travel season are continued issues with finding enough employees to service travel demand, The Wall Street Journal reports.
The newspaper notes both hotel companies and airlines have been struggling to keep up with demand, although comments from Southwest Airlines CEO Bob Jordan during his company's recent earnings call indicate the struggle is as much about getting people up to speed as it is getting them in the door.
“I’m cautiously optimistic that we can get to a good balance of head count to operate our planned flight schedules for the remainder of the year while setting ourselves up for resuming more material growth in 2023,” he said.