There is no doubt the travel and hospitality industries have been hit very hard through the COVID-19 pandemic. The damage ranges from critical to dire, depending on the sector.
The American Hotel and Lodging Association warned its industry is on “the brink of collapse” in an August 31, 2020 report. Among the stark realities: urban hotels are at crippling low occupancy rates and hotels in major cities across the country are struggling to stay open.
Airline travel started seeing an uptick in passengers in August, although it was still at an average of 27% of 2019 numbers. On September 27, 2020 the TSA reported screening 873,038 passengers versus 2.45 million one year earlier. That’s 35% of the 2019 passenger count. Additional airline layoffs are expected to be announced soon, possibly hitting another 30,000 jobs.
Airlines are quick to share their safety protocols to combat spread of COVID like HEPA filters and that cabin air is turned over 10-12 times per hour. In addition, mask requirements and keeping the middle seat open (only some airlines) have led some safety experts to give the green light to air travel, if necessary. Included in the link above is an interesting contrast between two international flights early in the pandemic and how the use of masks affected the spread of the virus.
At Motivation Excellence, our Manager, Supplier Relations & Sourcing, Joe Reise, keeps an eye on all the latest news concerning our industry. He sees a boom in the future and he’s working with our clients now to get the best scenarios while mitigating risk.
Looking ahead, Reise believes 2021 will be a rebuilding year. Many hotels allowed group bookings in 2020 to move to 2021, packing the year full of moved 2020 business and already existing 2021 business. But as we get closer to 2021, group travel is starting to postpone again through the first half of the year.
“Once we have a vaccine, travelers will see an end game and demand will be explosive. If you wait until after the vaccine is released, rates will already be headed much higher. It’s best to start looking now while there is still some flexibility with rates and availability.”
Q1 2022 is already seeing bookings increase, as well as rates. Companies who’ve maintained a healthy financial status through COVID-19 are eager to book group travel as soon as it’s deemed safe.
In light of the uncertainties we’re experiencing now and into the future, here are our recommendations on how to navigate booking future group events while limiting concerns over hotel closures, increased rates and safety.
- Avoid airport, convention and big city hotels – they are at the highest risk to close right now.
- If you want to book a hotel in 2021 choose one that’s had a positive EBITDA/room (sign of financial health) since at least July 2020.
- In 2020 and 2021, consider drivable locations for your smaller corporate gatherings, and look at resort properties outside of urban locations.
- In 2022, be prepared for higher rates the longer you wait to book.
- Whether in 2021 or 2022, get the pulse of the people you plan to gather.
- Do they feel comfortable flying?
- Are they okay following airline and destination-based mask requirements?
- Is there a group size they feel comfortable engaging with?
Reise says demand for non-urban resort properties will be at an all-time high in 2022.
“Especially among financially healthy companies, once group travel is a go again, there will be a flood of demand over a very short window of time.”
COVID-19 will likely affect how we look at group travel for several years to come, but with careful planning and insight into industry information, your company can begin to plan for future events. If you have any questions or concerns, or would like help planning a future travel experience for your company please contact Rhonda Brewer at r.brewer@motivation.redefinedcreative.com.
