Hotel CEOs Reflect on the Oil Industry's Business Impact
Skift Take
Lower oil prices may translate to more road trips for leisure travelers, and better margins for airlines, but they tend to have a negative impact on hotels, especially in terms of corporate travel.
Oil prices may be recovering now, inching closer toward $50 per barrel, (although that's well below a record high of $145 a barrel in 2008), but that wasn't enough to help weakened oil-producing markets — or the hotels that serve them — especially during the first quarter of 2016.
That was a sentiment shared by a number of CEOs during their respective first quarter earnings calls. Those with properties in oil-heavy regions and cities like Houston, Calgary, and even the Middle East said they saw declining revenues in those destinations because of impacted business travel, but they also expressed hope that those markets would rebound and eventually stabilize.
If this week's news is any indication, it appears the CEOs were right to be optimistic heading into the second quarter.
