Hotel Sector Recovery Begins As A Local Affair

Marriott International’s Q2 2020 earnings — rough, as expected, reporting a net loss of $234 million after springtime bookings all but evaporated — contain nuggets of good news, such as the hardy recovery Marriott’s properties are experiencing in, of all places, China.

In its August 10 Q2 earnings release, Marriott President and CEO Arne M. Sorenson said, “Greater China’s recovery was originally led by demand from leisure travelers, particularly in resorts and drive‐to destinations.”

That “drive-to” trend is revealing in some important ways. First, it underscores the fact that people want to return to traveling and staying in hotels. They just don’t want to fly anywhere or, in many cases, even leave their state.

That’s consistent with PYMNTS’ research over the arc of the pandemic to date, showing that four distinct consumer personas have been forged by COVID-19. To one extent or another, they all still fear contagion and continue to be wary of exposure, particularly during air travel.

It’s brought back the in-state driving vacation this summer, as COVID hotspots continue to pop up and states are returning to more stringent screening and quarantining for interstate travelers.

Exotic Travel Cools as Local Stays Heat Up

After COVID was confirmed to be circumnavigating the globe via jetliners coming from popular destinations, borders were shut, airports became deserted and airlines had a sickening moment of déjà vu as they recalled the 9/11 attacks and their effects on air travel sentiment.

The hotel and lodging sector is in a different situation, however. With digital travel sales estimated to be down at least 45 percent for full-year 2020, PYMNTS recently reported on the resurgence of driving vacations closer to home. It’s a concept that’s putting heads in beds at a difficult time.

In a recent PYMNTS panel, AAA Northeast President and CEO John Galvin noted that “domestic travel, particularly car trips, will be the most popular form of leisure travel this year.”

Home-sharing platform Airbnb is seeing cabin fever getting cured via close-to-home trips. “People, after having been stuck in their homes for a few months, do want to get out of their houses; that’s really, really clear,” Airbnb CEO Brian Chesky told Bloomberg. “But they don’t necessarily want to get on an airplane and are not yet comfortable leaving their countries.”

“Airbnb said it has booked more nights for U.S. listings between May 17 and June 3 compared to the same weeks one year ago,” PYMNTS said, based on Bloomberg reporting. “Since the pandemic began four months ago, the percentage of bookings on Airbnb within 200 miles has grown from one-third in February to more than 50 percent in May.”

Airbnb’s Go Near campaign promotes vacationing locally and regionally, avoiding air travel. Additionally, the platform said fear of urban areas and big hotels have boosted its numbers for country getaways, with PYMNTS reporting on Aug. 6 that “in June, hosts in rural America earned over $200 million total, a 25 percent year-over-year increase.”

The ‘Coronacation’ and Other COVID-Era Phenomena

Hotels are getting their houses in order with new hygiene and sanitization guidelines meant to make people want to check in and order room service again.

As PYMNTS reported in late May, “The U.S. Travel Association and the American Hotel & Lodging Association (AHLA) recently released guidelines for the industry based on four ‘pillars’ — social distancing, contactless interactions, scaled-up sanitation procedures and extended health screening in locations like airports and hotels.”

“The AHLA this week also released separate Safe Stay Guidelines designed to help hotels enhance their cleanliness standards — and signal to guests that a site is safe to stay in. Major hotel brands like Wyndham, Hilton, Marriott, Choice Hotels, Omni Hotels and Best Western served on an advisory board that helped draft the standards.”

Cowen & Co. Analyst Kevin Kopelman told Bloomberg that Airbnb queries were down only around 10 percent year over year by early July, and other home-share sites were reporting similar increases in queries. “However, hotels and the wider Expedia brand have yet to get any summer relief, with searches still down more than 60 percent,” the article stated.

“Tourism recovery typically begins locally,” Elizabeth Monahan, spokesperson for Tripadvisor.com, told CNBC in late May. “Travelers tend to first venture out closer to home and visit their local eateries, stay local for a weekend getaway or travel domestically before a robust demand for international travel returns.”

A recent post on the business blog for booking site Trivago speaks of COVID-era leisure creations like the “coronacation,” where Gen-Zers, in particular, will be coaxed back with discounts and offers, and the “holistay,” which is a shorter version of the classic two-week summer stay.