Business travel in a post-pandemic world will recover, but it may look very different from what it was before the pandemic. That’s the consensus of hotel industry leaders at the recently completed NYU International Hospitality Industry Investment Conference. Overall, conference attendees express optimism about the return of business travel.
In remarks during the opening session, Jonathan Tisch, CEO of Loews Hotels and conference chair, said the sector will recover “as business leaders realize there are just too many things you can’t do on Zoom, putting people back on the road to build relationships, make connections and close deals.”
However, Tisch asked, “What if less business travel is the new normal? What kinds of ripple effects will that create? And what will a sustainable business model look like?”
For example, Tisch pointed out that a decline in business travel could have an impact on leisure travel. “How much would leisure airfares need to increase to compensate for the reduced revenue from business travel?” he asked.
The post-pandemic corporate climate also presents opportunities, said Tisch. During COVID, millions of people learned they can work from anywhere. If workers don’t need to be in the office, Tisch maintained, how can the hospitality industry encourage them to stretch out vacations — working away from home while spending time with family — and enable them to be just as productive?
This trend is already emerging, and supporting it will benefit leisure destinations as well as airlines, restaurants, hotels, Airbnb and others, said Tisch.
Also at the conference, STR and Tourism Economics released its updated forecast, which predicts demand for hotel rooms in the US will near full recovery in 2022. According to Amanda Hite, CEO of STR, while group and business travel should recover significantly in 2022, it will be 2025 before the industry returns to 2019 levels of inflation-adjusted revenue per available room and average daily rate.
Business travel patterns are likely to change, said Paul Sacco, chief development officer for Mint House, a residential apartment provider. Longer trips will become more common as travelers meet with more clients on a single trip, and extend their trips with a spouse or partner joining them.
Another business driver, Sacco said, will be digital nomads who will live and work in different cities. He said residential properties like his will be “a backdrop for that lifestyle.”
And according to Jay Stein, CEO of Dream Hotel Group, conference business will come back quickly, already evidenced by attendance at major hospitality conferences like NYU. He said that while corporate travel will be last to return, “There is huge pent-up demand because your industry friends are as important as your personal friends.”
Stein said the delay in offices reopening had dampened the recovery, but signs are positive. As an example, he said when his company recently reopened its Chatwal Hotel in New York, the property sold out twice in the first week.