Omicron, Business Transient Return Remain Wild Cards – 2022 Hotel Forecasts Optimistic For Now – CoStar

Many of the same factors weighing on hotel forecasts persist, specifically the outlook for business transient and group travel, how inflation will play into travel demand, leisure travel’s endurance and the emergence of the COVID-19 omicron variant.

The calendar year has changed, but many of the same factors weighing on hotel forecasts persist — specifically, the outlook for business transient and group travel, how inflation will play into travel demand, leisure travel’s endurance and the emergence of the COVID-19 omicron variant.

Still, hotel industry prognosticators aren’t pessimistic about performance in 2022, largely thanks to the resilience travelers have shown over the past nearly two years and the power of pent-up demand for travel by people willing to pay pre-pandemic or higher rates.

Most of the industry’s largest forecasting firms raised expectations for 2022 performance in the fourth quarter of 2021, citing strong leisure demand, more widespread vaccination and the promising return of some group business on the books.

“The summer numbers were better than expected. Forward bookings on group business were short-term positive and even corporate group was turning positive,” said Scott Berman, principal and industry leader of PwC’s Hospitality & Leisure Group of his firm’s latest upward revision in November. “The real punchline and lesson learned, and what’s different from any other cycle, is the pricing power. Rate held much better across all the chain scales.”

Blake Reiter, STR’s director of custom forecasts, said moving into 2022, he anticipates consumers will be willing and able to spend saved money on travel, despite waves of inflation different parts of the world are experiencing. STR is CoStar’s hospitality analytics firm.

“If we saw this degree of inflation in a normal, non-COVID period, it might restrict travel to some extent,” he said. “But people’s travel savings now are typically much higher than normal, so I tend to think people will continue to travel.”

And while group rates tend to dilute ADR, forecasters haven’t necessarily seen that as too much of a problem as group business picked up in the back half of 2021.

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Posted by Nevistas News on January 3, 2022.

Categories: Trends