BY THE NUMBERS WITH
By Ermengarde Jabir , Ph . D .
ROOM FOR GROWTH
The hospitality sector is on the mend after a prolonged period of steady uncertainty .
Uncertainty has abounded in the hotel sector over the past 2 1 / 2 years as the pandemic made both leisure and business travel difficult or impossible . While holiday travel rebounded significantly throughout 2021 as travel restrictions were lifted , the rise of the delta and omicron variants dampened leisure travel in the second half of 2021 , further delayed any significant recovery in business travel , and had spillover effects into the hotel sector . Travel was also off to a less-than-salubrious start this year , as omicron cases surged in January before declining in February . Since then , travel requirements have eased both in the U . S . and abroad , as have city- and statewide mandates for tourist-related activities — an encouraging development for the hotel sector .
7-Day Average Traveler Recovery Ratio
100 %
90 %
80 %
70 %
60 %
50 %
40 %
30 %
Source : TSA Checkpoint Travel Numbers , Moody ’ s Analytics CRE
The traveler recovery ratio steadily climbed in 2021 , particularly in the second half of the year , peaking for the year at 90.1 percent during the Thanksgiving weekend . With the proliferation of the omicron variant as well as the typical seasonality of travel at the start of a new year , however , the recovery ratio fell back down to between 70 and 80 percent during the first two months of 2022 . As cases and restrictions have dropped , the recovery rate has remained near or above 85 percent , topping 90 percent on multiple days . These figures are incredibly encouraging for the hotel sector because the late spring and summer months are busy for leisure travel , especially with expectations to see pent-up demand this year .
2022 vs . 2019
2021 vs . 2019
Jan . Feb . Mar . Apr . May Jun . Jul . Aug . Sep . Oct . Nov . Dec .
Leisure travel accounted for 80 percent of all domestic flights in the U . S . in 2019 , according to the U . S . Travel Association . High travel recovery rates in the first half of 2022 indicate that , while quite slow to pick up through much of last year , business travel has also contributed to the healthy and sustained rebound in traveler numbers . However , it may be a long time before business travel rebounds to its 2019 levels — the last “ normal ” year — because teleconferencing platforms have provided flexibility and have served as a cost-saver for firms . Travel considerations have direct implications on the hospitality sector because those who are traveling , whether for business or leisure , drive demand for temporary accommodations .
Labor is such a crucial component of the conversation around performance in the hotel sector , both in terms of the people who keep hotels going by working at the properties as well as business activities that spur stays at hotels . Total non-farm payroll employment was strong in February , growing by 678,000 , according to the Bureau of Labor Statistics — a stronger number than expected , after months of tepid growth that fell short of consensus forecasts . Leisure and hospitality employment and professional and business services led the way — both good signs for the hotel sector , which gained 28,000 jobs in February . This indicates that demand for hotel properties is increasing , as hotels are hiring after employment in the sector was decimated at the start of 2020 .
Hotel performance has varied tremendously by asset tier and has not been immune to variant concerns . Revenue per available
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SPRING 2022