Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
THE COVID-19 PANDEMIC will cost U.S. hotels a 29 percent decline in annual hotel occupancy over the next 12 months, according to a study from business strategy company Magid and consulting firm Horwath HTL. This can lead to a $75 billion in room revenue.
Declines in business travel, projected to drop 22 percent this year, according to the Magid HTL Forecast Tracker, although leisure travel plans also are expected to decline. However, while fewer people plan to travel, those who do plan to travel with the same frequency.
Data in the tracker is gauged by baseline information gathered prior to March and measures the percentage of the population who plan at least one travel experience within the designated time frame as well as the anticipated number of experiences in the same time frames. Its purpose is to predict a return to pre-pandemic travel performance.
“The forecast shows the continuing significant impact COVID-19 is having on hotel occupancy,” said Rick Garlick, Magid’s vice president and strategy consultant. “Currently, the forecast suggests a 39 percent decline in occupancy for the next month. If the average occupancy at this time of the year (summer) is 70 percent, this would put current occupancy around 43 percent.”
Other findings in the tracker include:
71 percent of consumers expect to next stay in a hotel 24 months from now, down from the baseline behavior of 89 percent who said so in March and the 74 percent in the beginning of June.
56 percent of consumers said they expected to next stay in a hotel a year from now, compared to 62 percent who said so in June and 79 percent who reported the same in March.
Consumers anticipate staying at hotels 7.26 times per year, up from 6.74 times per year in June and the “baseline” reported behavior of 6.58 times per year.
Vacation rentals are forecast to drop 64 percent for the last part of the summer, but are expected to return to normal in 12 months.
Within the next 12 months, air travel is expected to decline 31 percent, in line with the expected 29 percent drop in hotel occupancy.
“Many hotel companies are creating new forecast models for the remainder of this year and next without the benefit of insight into the mindset of the traveling consumer,” said John Fareed, chairman for Horwath HTL America. “This data will allow hoteliers to better understand the customer’s intentions and create marketing offers to consumers that will position them to survive and thrive this crisis.”
Last week, STR reported that Labor Day weekend provided an expected boost to U.S. hotels’ occupancy for the week ending Sept. 5. Occupancy for the week finished at 49.4 percent, up from 48.2 percent the previous week but down 18.9 percent year over year. ADR finished at $100.97, a 17.1 percent drop from the previous year, and RevPAR came in at $49.87, down 32.8 percent from last year.
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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