How the Hospitality Industry Will Come Back from Catastrophe

It’s been a rough year. With the pandemic slowly releasing its grip and travel restrictions lifting, the resort and hotel industry can begin to recover, providing guests with some much-needed respite. While the task may seem overwhelming, the industry needs to remember they’ve overcome a slew of past catastrophes including natural disasters, SARS, 9/11, and the 2008 financial crisis. Here’s how the hospitality industry will bounce back.

Bouncing Back

After being cooped up with family for months, most are ready for a break. And if you live alone, you’re likely ready for some social interaction outside of Zoom meetings. Put simply, people are ready and itching to travel.  

As seen after previous recessions and in China’s current travel trends, leisure travel in the U.S. is bouncing back before business travel. And for many travelers, they plan on staying closer to home. With low gas prices throughout the country, local, domestic, and drivable destinations will recover quickly, becoming the new hotspots for travelers.

Even with deeply discounted flights some will still be hesitant to hop on a plane. Imagine jumping in an Uber, then navigating a crowded airport and security, to finally sit down smooshed next to someone on a plane. Being able to drive to a resort in your own vehicle eliminates the extra risk of exposure, making drive-to leisure destinations an ideal choice for safety and peace of mind.

This trend was seen just this past Memorial Day weekend. Occupancy spiked over the holiday weekend with one of Best Western Hotel Group’s hotels reopening at 100% occupancy. Best Western Hotel Group president and CEO David Kong affirmed, “Demand will be dominated by road trips.”

We’ll see the same trend with business travel. Primarily drive-to markets will rebound first. To encourage business travel, hotels and resorts must reassure companies by reimagining a future convention model that meets social distancing and new safety standards. This means integrating more technology, reconsidering the physical layout of meeting spaces, and changing how food and beverage is served. Unfortunately, you may not be able to enjoy a nice buffet for a while.

While some of the stats seem grim, overall occupancy is on the upswing showing the U.S. recovering more quickly than Europe. Hotel News Now also reports reassuring data stating, “STR’s current U.S. revenue per available room forecast for 2020 stands at -50%, with a sharp rebound of +63% expected in 2021. These numbers are in flux, but the tenor of the prognostications is clear: this is temporary disruption.”

Welcoming Back the Post-Pandemic Traveler

While you may be ready to roll out the welcome mat, guests will only show up if they know the mat (and the towels and bed and elevator buttons and dining area and even their tv remote) has been thoroughly sanitized. The biggest priority for guests will be their health and safety. Travelers will need to be reassured and understand the exact health precautions and cleaning protocols you’re taking. Start building trust now through transparency, open communication, and empathy.

With safety as the main concern, guests will likely opt for resorts offering separate cabins or bungalows. The feeling of safety will also extend into the activities you offer. Most travelers will seek out destinations boasting a multitude of outdoor recreational options where they can more easily keep a social distance. Beachfronts, golfing, and hiking will be big draws for travelers.

The uncertainty of what the future might throw at us next can understandably lead to reactive decision-making and panic. However, the outlook of the travel and the hotel industry is overall positive —especially for drivable resorts which can more easily accommodate guest needs and allay traveling concerns. With restrictions continuing to lift, drive-to resorts will see more demand from leisure travelers anxious for an excursion other than the grocery store.

As Laura Davidson, president and owner of LDPR told Forbes, “I have been through 9/11, SARS, swine flu, 2008 crash...this feels a lot worse but travel always comes back.”

Frank Jermusek

Frank Jermusek, J.D.

President / Managing Director

Frank Jermusek is a Principal at SVN | Northco headquartered in Minneapolis, Minnesota. SVN has become one of the most recognized commercial real estate brands in the world with over 200 offices globally.