Top U.S. officials had openly professed hopes the upcoming Fourth of July weekend would mark a return to normal for the country, with a target of at least 70% of adults having received at least one dose of a COVID-19 vaccine by that point.
But with vaccination rates plateauing, it now seems the country will broadly fall short of that goal — with many states lagging well behind that pace.
As of June 30, the U.S. Centers for Disease Control and Prevention data showed 180.7 million Americans — or 67% of the adult population — had received at least one dose and 154.9 million people — or 57% — were fully vaccinated. In all, 22 U.S. states and territories had surpassed President Biden's goal of 70% partially or fully vaccinated, led by Vermont at 85%. Mississippi showed the lowest vaccination rate in the country with 46% of adults having received at least one dose and 38% fully vaccinated.
Hoteliers across the country still see a a strong resurgence in travel demand for a holiday weekend they have long hoped would be emblematic of a wider rebound for the industry.
Here is what hoteliers are telling Hotel News How about their updated travel expectations and how they think the pace of vaccinations will impact future projections.
At the midyear point, how have your expectations for the travel rebound evolved for summer 2021 and beyond?
Sloan Dean, president and CEO, Remington Hotels: Overall, revenues have rebounded much faster than what we expected. Initially, we saw an improvement on weekend leisure, which accelerated in [the second quarter]. We expect summer weekends will be at record highs for occupancy and [average daily rate] for most markets. Leisure destinations have benefited the most from the increase in demand, though we have also seen similar trends for urban locations. The real question is what happens with business transient demand after Labor Day.
Ed Robison, senior vice president of owner relations and development, HP Hotels: For the summer and beyond, I would anticipate fairly dramatic shifts in travel patterns due to increased remote work, virtual/hybrid meetings and office redeployments, but do expect that leisure travel will continue to grow in the next six months. After more than a year in lockdown, people are ready to travel. We are still seeing a great deal of local and regional travel, but travelers are starting to venture a bit farther from home. The COVID-19 vaccination is increasingly important in giving travelers peace of mind, but I am not certain they are 100% ready for air travel. Corporate travel will remain well below 2019 levels, but leisure will still remain strong. They will continue local travel and begin to venture a bit further from home as their peace of mind grows.
Chris Bielski, director of sales and marketing, Fort Lauderdale Marriott Harbor Beach Resort and Spa: Our results thus far this year have far exceeded our expectations, and although we have seen a slight slowdown in our leisure transient pace, we are still seeing demand exceeding our 2019 levels for the same time period looking forward through the balance of the year. We remain optimistic that this will continue into 2022.
Jared Saft, chief business officer, Westgate Resorts: Across all our destinations at Westgate Resorts, we expect summer travel to exceed 2019 and possibly be the best summer season we’ve seen in recent memory. Americans are yearning to reconnect with loved ones and seek out missed vacation celebrations.
Rick Takach, chairman and CEO, Vesta Hospitality: At midyear, our business levels, both rate and occupancy, far exceed what I thought it was going to be at the beginning of the year. Our portfolio is doing extremely well, and many of our hotels are surpassing 2019 numbers this summer.
However, we must acknowledge that industrywide, not all markets are doing well, especially urban locations that rely on corporate and group business. While we have been getting a good number of inquiries from groups in recent months and do expect business travel to return, we must remain cautious about this fall and winter.
Increasingly, in addition to pent-up demand for leisure travel among Americans, we must also note that domestic travel is likely benefiting from limited overseas travel. What happens when international travel opens back up and an overseas vacation becomes more feasible or attractive?
Overall, demand is extremely strong right now, and we are able to drive average daily rate in select markets. However, this renewed business does introduce some tensions. Our average guest is a bit more fragile, right now. Guest expectations must be balanced against the reduced staffing and supply chain issues that many operators still face. Instead of a new normal, let’s call it a to-be-determined normal. We are working hard to maintain high standards of service, even as areas like check-ins, housekeeping or food and beverage continue to evolve.
Thom Geshay, president, Davidson Hospitality Group: Our expectations for travel in 2021 have been confirmed with the performance we are seeing in our portfolio. We predicted the recovery would not be even, and that certain markets would benefit more than others. What we have seen is a tremendous pent-up demand for the drive-to, leisure markets, particularly in the southern states. Certain markets are even above 2019 pace. But there are still many urban, corporate and group markets that are lagging dramatically. Looking forward, we feel confident strong leisure travel will continue, while group pace is improving, yet still behind 2019 levels.
Greg Friedman, managing principal and CEO, Peachtree Hotel Group: We've been in recovery over the last nine months or so, but that recovery is speeding up. As a result, I am bullish on the industry and expect to recover to 2019 levels within the next six to 18 months, depending on the submarkets. Given the tailwinds we have with how healthy the consumer is and how healthy the balance sheets of most corporations, we are well-positioned to exceed pre-pandemic levels.
Tracy Kundey, managing director of hospitality, Everwood Hospitality Partners: I believe we are seeing a faster recovery pace than many outlooks predicted in the leisure and business transient segments. Contract and business/company travel is slower than predicted. In this business, we must watch a lot of peripheral noise, and not just planes and gas prices. We see a resistance to return-to-office work environments, so company business is slower to get back into the routines. We still hear a lot of chatter around this with companies mandating return-to-office deadlines or compromise of three days in office and still two from home. The fact is that people have learned how to work remotely, and this is an impact on hospitality.
Two hypotheses are that the customer is over remote work and wants to feel the connection again, that is, a pushback on the lack of company travel. Even in our own business where we do not see the franchise company traveling or visiting the properties, we are voicing our concerns.
The second is that we feel there may be a spike to group meetings. Here again, people are yearning for the social contact, and work-from-home may create an uptick for more meetings to bring everyone together.
Sean Liu, manager of investments and underwriting, Everwood: I see leisure returning in full by end of this year. Business transient will return by end of 2022, and groups will return by 2023. For markets that don’t rely on much convention business, recovery will be 2022. For markets that do, 2023 or 2024. 2022 leisure and business transient demand may be stronger than 2019, because there were so many people that relocated. As a result, there is greater demand to visit business partners and friends and family.
Mike Marshall, president and CEO, Marshall Hotels & Resorts: I expect summer leisure travel demand to be very strong with rates higher than we have seen in history in most tourist destinations. Supply continues to be depressed due to lack of help which is driving up pricing for available rooms. I actually expect that trend to continue in the fall for destination markets with many folks having pent-up vacation time ready to use. I don’t see any real corporate travel coming back until the airlines start resuming routes that have been stopped causing airfares to start to get very high currently. It is going to be a process.
Has the flattening pace of vaccinations across the U.S. changed your expectations for leisure and business travel for the rest of the year? Why or why not?
Dean: It has not. What we have seen is that with the opening of states such as New York, Massachusetts and California, there is a renewed sentiment of getting back to work. Since the opening of these states, we have seen an acceleration of bookings for future months. During the month of June, we saw an increase of 8 percentage points of occupancy compared to the month of May. This indicates that business demand is beginning to take off. The latest airline trends by ForwardKeys indicate that last week the purchased/paid tickets were at 96% of 2019 levels, with Miami, Orlando and Dallas already over 100% recovery. We expect demand will continue to improve for business travel and urban locations and assume this will be more pronounced after the Labor Day weekend. I do think there will be some avoidance to areas where there are flare-ups due to lack of vaccinations; however, we do not operate hotels in those mostly rural or secondary markets.
Robison: The COVID-19 pandemic had a huge impact on travelers, and it has redefined how travel will look in the near future. The good news is that travel continues to rise and travelers are looking for experiences and getaways. They have a willingness to spend as a year of saving money has resulted in the will to spend on experiences. Many of our hotels are offering great hotel packages and dining options for families and senior travelers. We are rising to the challenge to delight guests during their stay, meet and exceed their expectations as well as providing services that will continue to boost hotel revenues.
Bielski: Expectations for leisure travel have not changed as this segment was strong prior to the start of the vaccination process. In regards to business travel, we expect to see this strengthen as well as companies are projecting to ease restrictions for those associates that have completed their vaccination protocols.
Takach: That is hard to determine, but I expect not. Our impression is that people who have been vaccinated have more confidence in traveling, going out to restaurants and being with other people in social situations. The more people that are vaccinated, the better travel will be. However, we do not see any flattening of demand at our hotels based on vaccination levels.
Personally, it still makes sense to take reasonable precautions, and as an organization, we will continue to follow the guidance of the AHLA and our brand partners, as applicable.
Geshay: The flattening pace of vaccinations has not changed our expectations for leisure and business travel for the balance of the year. What is playing out in the U.S. is similar to what is happening in other countries where there was a tremendous early rush for at-risk populations to get vaccinated, but now with over 325 million doses administered, representing nearly 55% of the population with at least one dose, the declining vaccination rate is simply a math equation with remaining citizens being either low-risk (youth) populations or COVID-recovered. Our expectation is that the effective vaccination campaign will continue, which will, in conjunction with the falling COVID-19 incident rates, make many business and leisure travelers feel more confident in traveling to places where restrictions have been lifted.
Friedman: With 66% of the U.S. population over the age of 18 given at least one dose, I remain optimistic we will exceed pre-pandemic levels in the industry by the end of 2022. The entire country, by the end of July, will be open. In terms of social distancing, in terms of capacity at restaurants and hotels, all of those restrictions will end, which will unlock a lot of capital. The roughly $4.6 trillion currently in money market or savings deposit will get fed into the economy in consumption and business expansion and investment. That's what's driving the economic growth forecasts for 2021 to a record level. With people coming back to the office, I expect that will lead to an increase in business travel. We are already experiencing a resurgence of group travel, and the level of leisure travel continues to exceed expectations.
Kundey: I am not sure where flattening is taking root. In our properties, we are seeing the cruise and airlines coming back which speaks to an increase in vacations. Some of the vacation spots may be hindered still by mask or vaccine restrictions, and they are more lead time like a cruise, so they are just getting started back up.
Keep in mind some places like Myrtle Beach, South Carolina or other U.S. beach destinations did not remain shut down for the long periods. In fact, the condo vacation saw the pickup as families could stay together, but isolated. When we factor these destinations, it may skew the data a little showing flattening, but if we are getting back to 2019 numbers, things are on the upside.
We have seen a spike in things like weddings and family reunions. People are looking to be social and normal, however, still with a caution to safety. The areas for us to continue to push are cleanliness both in rooms and public spaces. It is a short line between clean and pandemic so if we want consumer confidence to continue, we all need to keep up our cleanliness focus.
One noteworthy [thing to] mention is ADR is remaining strong, and this is helping the recovery take hold faster. If there were more of an ADR dip with lowered occupancy, we would be seeing different results.
Liu: I don’t think we’ll see another lockdown. I can see masking in public spaces continuing through the end of the year. In smaller communities, transmissions will continue in places with low vaccination rates. However, those places are governed by leaders who are least likely to shut down businesses or restrict travel. In major cities where business shutdowns are possible, vaccinations rates are generally higher in those areas, so leaders are less inclined to push closures and more inclined to promote vaccinations, especially in lower-income communities and minority communities.
Marshall: This is a big maybe as certain pundits are now trying to scare everyone about a new strain that is going to be much worse than the last but in reality just seems to be a way to scare more people into getting vaccinated in my humble opinion.