Quite the opposite, with Hilton CEO Chris Nassetta predicting that the hotel chain “will have the biggest summer we’ve ever seen in our 103-year history this summer.” Few industries were hit as hard as travel by the Covid-19 pandemic, which curtailed almost all leisure and business travel plans. But as vaccination rates and loose restrictions spread across the country, travelers returned. In May, global leisure and business flights exceeded 2019 levels for the first time since the pandemic began. However, while this comes at a cost, due to the high level of demand from travelers as well as other inflationary pressures, hotel companies still believe that there is room for further price increases. “The price has gone up for everything, so we’re no different than when you go to a gas station or the grocery store or any other aspect of life; it’s discreet,” Nassetta told CNBC’s “Squawk on the Street” on Monday. . Nassetta said two things kept demand high: more than $ 2.5 trillion in leisure consumer savings and strong corporate balance sheets combined with “very good” profitability. “Two years have passed, both in terms of entertainment and business, with meetings and events without being able to do the things they need to do,” he said. “They have discretionary income available in both departments to do it and they need it, and that matches demand.” Marriott CEO Tony Capuano said that on Memorial Day weekend, the company’s revenue per available room, which measures the hotel’s performance, increased by about 25% in 2022 compared to 2019. In Marriott’s luxury portfolio, which includes hotels such as JW Marriott, Ritz-Carlton and St. Regis, these hotels recorded an almost 30% increase in rates in the first quarter of 2022 compared to 2019. “I think as long as we provide services, something that can be challenged in markets where work is difficult, we will continue to see really remarkable prices,” Capuano told Closing Bell on Monday. He noted that while there was “extremely strong interest rate potential” in places such as leisure and coastal destinations, “in the middle of the country, some of the urban markets did not return so quickly”. Another potential boost in demand could come as the Biden government has now abandoned the Covid-19 test requirements for overseas air travelers. While other countries such as the United Kingdom and Greece have long lifted their claims, the United States still requires travelers to provide a negative Covid-19 test certificate one day before boarding a flight to the United States, regardless of vaccination status. their. It was one of the last countries to continue to apply such a rule. Travel industry executives have argued that the restriction had hit international travel demand. “The pre-departure test requirement creates uncertainty for travelers, another hurdle that could lead them to choose a destination with less friction,” Capuano told CNBC’s Seema Mody. “The Biden administration should be commended for this action, which will once again welcome visitors from all over the world and accelerate the recovery of the US travel industry,” said Roger Dow, president of the US Travel Association. “International incoming travel is vital for businesses and employees across the country who have struggled to recover from this valuable sector.” Hyatt President and CEO Mark Hoplamazian told Squawk on the Street on Tuesday that foreign travelers to the United States were spending far more than domestic travelers and that test requirements were “creating friction.” But even without travelers who may have put their travel on hold due to demand, demand remains high. “In general, almost all business and leisure departments are focused on all rollers,” Hoplamazian said. Keith Barr, CEO of IHG Hotels & Resorts, which owns brands such as InterContinental and the Holiday Inn, said he expects demand to continue to grow for the rest of the year as travel is more normal after the pandemic. This is likely to happen with further price increases, as inflation and other costs will be taken into account further. “Demand is so strong … we have the ability to price, but in reality, we have not even kept pace with inflation,” Barr told Closing Bell on Tuesday. “There is still some price strength in this growing business and demand will continue to grow until the summer.” “These prices will probably only increase as there will be ‘very little gradual new capacity to enter the industry,’” Nassetta said. “The laws of supply and demand, the laws of economics, are alive and well,” he said.
