Hotel Industry Faces Short-Term and Long-Term Disruptions With Events – CoStar

World Trade Center Station, New York, NY, USA - Unsplash
Hotel Industry Faces Short-Term and Long-Term Disruptions With Events

While most of the discussions on group demand at hotels is still related to COVID-19, hoteliers worry that crime and safety concerns could be the next issue that hampers citywide events.

While leisure travel has buoyed the hotel industry through the early stages of the recovery, many hoteliers are still hoping that 2022 sees a more broad-based return of demand, including a rebound in business transients and groups.

But with COVID-19 cases still spiking and companies reticent to make big commitments to travel, the return of large, citywide events that drive a lot of that demand could be slower to return.

While much of the discussion about the lack of and eventual return of events and group demand have been in relation to COVID-19, Ben Seidel, president and CEO of Real Hospitality Group, said the hotel industry has group-related hurdles to face even after the pandemic ends.

He said signs are pointing to the pandemic ending sooner rather than later, and at that point many of the large cities that are often vying to host events will now have to grapple with souring perceptions in relation to crime and unrest.

Seidel pointed to specific markets such as Chicago, San Francisco and Portland, Oregon, as places that struggle with high crime rates that could ultimately deter meeting planners.

“Portland is a beautiful, but if you’re a meeting planner now, holding a conference there with their crime rates is not going to appear on the radar screen,” he said.

Seidel said he’s already killed two deals in Portland while in the due-diligence stage over these specific concerns.

The markets that are poised to benefit post-pandemic are those in places such as Florida and Arizona, although Seidel did admit those markets are also seeing benefits from now from having fewer COVID-19-related restrictions.

He said this pattern can also be observed in hotel industry events, with the Arizona-based Lodging Conference reaching attendance numbers closer to a typical year in 2021 than other major industry conferences.

Despite those concerns, Seidel said the industry’s overall view of the business transient and group recovery are too pessimistic, even if that demand is going to finding new destinations.

He expects a wave of “revenge travel” similar to what was seen with leisure as soon as it’s viable.

“I want to know why we all think we won’t see a wave of corporate travel with the light turns green and the in-house counsels and HR people say it’s OK,” he said. “Why won’t we see that pent-up demand to make up for the last two years? I think it’s definitely coming.”

He added if that predication rings true, ultimately the industry will be facing a new golden age, with overall demand significantly higher than what was seen in 2019.

Click here to read complete article at CoStar.