It’s a challenging time for the global tourism industry, and the hospitality sector is no exception: Acts of terrorism. The immediate after effects of Brexit. The looming U.S. Presidential election. The state of the economy. Lower oil prices. The growth of short-term rentals. The spread of Zika. These are just a few of the major issues having a direct impact on the global hospitality industry.

But the impact of these various challenges isn’t quite the same for all, and how companies are choosing to respond to them is, likewise, varied. And despite all of the uncertainty, hotel CEOs aren’t giving up on a bright future ahead, entirely.

While most hotel CEOs remain somewhat optimistic about the immediate futures of their respective businesses, they’ve also tempered their financial outlooks for the remainder of this year, given all of these challenges, as well as the ones that lie ahead.

“The big takeaway from all the earnings call is that guidance for the remainder of the year came down across the board,” said Michael Bellisario, an equity research analyst and VP at Robert W. Baird. “Most management teams cited continuing soft demand, especially on the business transient side. Expectations were reset lower, and the lowered guidance reflects these continued slow trends continuing.”

Whereas management teams were more bullish and far more optimistic in the previous two quarters, they’re not like that anymore, he said.

“In the last quarter or two quarters ago, there was this hope or expectation that trends would rebound and that seems much less likely today given the growth and what’s happening the in economy,” Bellisario said. “Stocks have reacted well, and that has to do with management teams’ expectations coming closer to a level where the investment community was.”

Here’s what various hotel CEOs and executives have had to say about the challenges they face together, and a glimpse into how they’re responding to them.

Global Terrorism

Recent terrorist attacks in Europe have, sadly, become a sort of new normal. While these attacks are having some immediate impacts on hospitality businesses in those destinations, most CEOs have said terrorism isn’t changing their overall business strategies.

“Obviously [terrorism] is a consideration,” Stephen P. Joyce, CEO of Choice Hotels said in an interview with CNBC. “But if you look at the history of places that have experienced terrorism, unfortunately, we’re getting used to it. When something happens, sure, there’s an immediate impact, but then people get back to living and working and traveling, and so our view is we want to make sure our hotels are as safe as we can possibly make them, but we love Europe as an opportunity.”

Joyce said his company recently signed a number of deals in Europe and the Middle East, including Turkey, Germany, Hungary, Austria, the UK, and France. He said that occupancy levels for Choice’s four properties in Turkey remain fairly high, in the 70-percent range.

Bellisario echoed Joyce’s assessment, saying, “Terrorism is out of companies’ and investors’ control. It’s something that is obviously not good. It’s unfortunate, but it seems like events like that have happened in the past may have immediate impacts, but it doesn’t necessarily derail hotel performance in the long term.”

Patrick J. Grismer, Hyatt Hotels CFO said the company has seen “significant cancellations of reservations that have been made for the months of July and August” in Nice, France, where a terrorist attack took the lives of 84 and injured more than 300 people.

“When we look at general market data for the upper scale segment in Nice, what we’re seeing is that the market is down about 25 percent, since those attacks. And we’re seeing similar outsized impacts, if you will, in Turkey as another example,” he said. However, he said that because these markets aren’t necessarily the largest markets for the company, the negative impact of lower occupancy in those cities isn’t having a large impact on the company’s financials.

Brussels-based Rezidor Hotel Group CEO Wolfgang Neumann, whose company’s majority shareholder is U.S.-based Carlson Hotels, painted a more challenging landscape in the wake of terrorist attacks in Europe. The company has a number of hotels in Turkey, France, and Belgium.

“Most notably the French and Belgian markets are suffering following the attacks in November and March,” Neumann said. “The continuous terrorism threat, as again seen recently in Nice, is certainly reaching far-reaching consequences for Europe in general as long-haul travelers avoid such destinations for the time being. And it remains to be seen how quickly the markets rebound.”

He added, “And in Turkey, a key market for us where we operate 14 hotels, the atmosphere remains certainly tense after various attacks and the coup, not to mention the more recent developments which we are monitoring closely.”

To manage this, the company is facing in these markets, Neumann said Rezidor will focus on “cost containment” and focusing on development and adding more hotels from conversions.

Likewise, Paris-based AccorHotels, the largest hotel operator in Europe, had its share of challenges in the second quarter owing to terrorism.

“A cascade of terrorist attacks in Europe is driving away tourists at the height of the summer rush, casting a pall over hotel chain and luxury retailer as they are already grappling with Britain’s vote to leave the EU,” said Jean-Jacques Morin, AccorHotels CFO. “Terrorist attacks in Paris, Brussels, and recently, Nice, are keeping the leisure traveler away from France and Belgium. The strong drop in business we suffered in Paris in the first half was partly offset by the French provinces, but we still need a bit of time to fully assess the consequences of the Nice trauma in the province.”

On July 14, just hours before the attack in Nice took place, Skift spoke one-on-one with AccorHotels CEO Sebastien Bazin about the threat of terrorism.

Bazin said, “Security of our guests has been of the utmost importance from the very first day we got created, no question about it. Can we prevent [terrorism]? No. Can we make sure we have all the proper security systems outside the hotel? Can we actually train our people to see whether somebody is of risk? A lot of it is common sense. A lot of it is training. A lot of it is sharing information with the local police officers. By doing that, you’re doing the best you can.”

He added, “At the same time, let’s not be fearful of it. We live in a world of very difficult times, but is it very different from the world we lived in 20 years ago? People have forgotten what was happening in Africa, and what was happening in Asia-Pacific. A lot of those tragedies were not displayed as immediately, because Facebook did not exist at the time. But they were as brutal as it is today, except today we have more emphasis on it.”

Bazin’s strategy in the face of such threats? Don’t turn away. “For example, Brazil is going through a tough time. We’ve been in Brazil for 40 years. Never ever did Accor leave any country, for any specific risk. Even if it’s geopolitical, a coup d’etat, we don’t ever leave a country, because you built in trust, and you’re there for the local community. Don’t leave the ship when they need you the most.”

Weak Oil Markets

As we’ve noted before, the health of oil markets has a far-reaching ripple effect on the travel industry. Lower oil prices mean more road trips for leisure travelers and better airline margins, but they also translate to dips in corporate travel business for hotels.

Executives at Wyndham, InterContinental Hotels Group (IHG), Marriott, and Rezidor said that weak energy markets have had an impact on their businesses during the second quarter.

Wyndham CFO Thomas G. Conforti said the company’s revenue-per-available-room (RevPAR, a hotel industry barometer of financial health) in oil-producing markets was down 16 percent in the second quarter. He also noted “continued weakness in the Canadian oil markets.”

IHG CFO Paul Edgecliffe-Johnson also noted the impact of oil prices in the Americas, IHG’s largest market, as well as in the Middle East. “Our performance continued to be impacted by our overweighting towards the oil markets where RevPAR in the second quarter was down 6 percent, compared to the non-oil markets up almost 4 percent,” he said of IHG’s business in the Americas. He added, “The low oil price and the high level of supply growth in the UAE meant that RevPAR for the Middle East fell 8 percent.”

However, looking ahead, Wyndham’s Conforti said he believes business in oil markets will gradually improve. “One is, and we know this will materialize, the effect of the disruption in the oil-producing regions, we saw an improvement quarter-to-quarter,” he said. “Last quarter, we had a 28 percent reduction. This quarter, we only had a 16 percent [drop]. By the end of the year, that number should be fully mitigated. So, we’ll pick up revenue there in the Hotel Group.”

Likewise, Marriott CEO Arne Sorenson had a similar positive outlook for the rest of the year.

“Houston I think was down 10 percent, if I remember right, RevPAR in Q2, which is 10 percent of the oil patch in the United States, obviously,” Sorenson said. “And I think that’s driven by bad aspects of our economy. The comparisons will get easier for oil certainly as the year goes along. I’m not sure that that means any of them will view business has been robust though, in a way, that causes them to get back to the level of activity that they might have had two years ago something like that.”

In Europe, particularly in Norway, lower oil prices have had a similar effect on Rezidor’s business. Rezidor CEO Neumann said, “In Norway, the situation continues to be challenging due to the low oil price that triggered significant investment cuts from oil companies and related industries.” He added, “Like Norway, a few other countries like UAE, Nigeria or Saudi Arabia, also subdued because of low oil prices or declining commodity prices.”

Even if the brands think oil markets should gradually improve over the rest of the year, investors aren’t quite in agreement, said Bellisario. “We don’t see it getting better anytime soon. It’s going to get worse before it gets better.”

So why are some brands more optimistic than investors are? Bellisario thinks it has to do with the fact that the full effects of the weak oil markets have yet to trickle down. “When oil fell, RevPAR didn’t fall right away. It takes a while for that to work through the system.”

For some hotel companies that rely more on leisure travelers, however, the lower oil prices are turning out to be a positive. Choice Hotels CEO Joyce said “We’re having a big summer. So, gas prices are low. Seventy-two percent of people that we surveyed are going to be on the road. The airline situation and the capacity issues and the general hassle of going through the airlines has put a lot of people on the road which is good for us, because we have a lot of hotels on the roadsides and we also have them in destinations.”

The Spread of Zika

Given the recent news that the Zika virus is spreading rapidly northward in Miami and Puerto Rico, as well as the fact that fears about the virus in South America and the Caribbean already resulted in weaker occupancies during the first quarter, it was no surprise that Zika was discussed by many hotel CEOs during their second-quarter earnings calls.

Hyatt CEO Mark Hoplamazian noted Zika’s direct impact on the recently opened Grand Hyatt Rio de Janeiro, saying “With respect to Grand Hyatt Rio, challenging macro issues including a volatile economy and concerns regarding the spread of the Zika virus had created significant headwinds for this hotel in its ramp-up phase.”

Even so, he said the financial success of the Grand Hyatt São Paulo “in an equally challenging environment in Brazil in 2002, and after enduring a volatile ramp up period,” would prove as an example for the Rio property, and “We expect Grand Hyatt Rio to follow a similar trajectory over time.”

Hilton also saw challenges in Brazil in the second quarter, owing to economic issues and Zika. Hilton CFO Kevin Jacobs said, “Brazil remained under pressure, given political and economic instability, while Zika virus fears also weighed on regional results, meaningfully affecting leisure demand in Latin America and Puerto Rico.”

Marriott CFO Leeny Oberg said “We saw occupancy declines in the Caribbean and Latin America largely due to weak economic conditions and the impact of the Zika virus.”

Given that fears over the spread of Zika are already impacting the stock prices for cruise lines and airlines, it could have a similar effect on the stock prices for hotels as well.

Bellisario said that investors he’s spoken to, however, aren’t as concerned about Zika as media reports may say. “We don’t’ get questions from investors saying they don’t want to buy a stock because of Zika. It’s a good talking point for the media.”

Brexit’s Immediate Impact

When the results of the Brexit vote were announced on June 23, the global community’s response was one of shock. The sterling fell dramatically, as did hotel stocks, although not quite as much as the British currency. In the near term, the fluctuations in currency are what’s having the most immediate effect.

“The Brexit impact is the ripple effect in how the dollar and other currencies have moved, and how that affects outbound and inbound travel,” said Bellisario.

While most hotel companies didn’t foresee Brexit having much of a negative impact on their businesses in the short term, AccorHotels CFO Morin noted the lower value of the sterling will be reflected in the company’s profits. “On current foreign exchange, we estimate the impact to be negative by about 10 million for the rest of the year,” he said.

Although IHG is headquartered in the UK, IHG executives said the lower sterling will not have a major impact on the company’s business. IHG CFO Paul Edgecliffe-Johnson said that approximately two-thirds of the company’s investments are in dollar-linked currencies, while only 5 percent are in sterling. Approximately 50 percent of IHG’s gross central costs and 40 percent of its Europe costs are in sterling, and about 70 percent of the company’s debt is in sterling as of June 30. “Given this profile, we expect current currency fluctuations to have only a small impact on our results,” he said.

Wyndham CEO Stephen P. Holmes said that Europe accounts for 13 percent of Wyndham Worldwide’s revenues, most of it from vacation rentals, and that 90 percent of its vacation rentals in the UK are made by UK consumers.

“Our rental brands have traditionally performed well in periods of economic and political turmoil because of our outstanding drive-to locations and strong value proposition. And our large inventory in the UK and nearly 40,000 units positions us well should demand for UK vacations increase due to the depreciation of the pound,” Holmes said. “So, while we may experience some additional FX headwinds resulting from the Brexit decision … we do not expect any change in overall demand or impact on bookings.”

Economic Uncertainty

All businesses, regardless of industry — but especially those in hospitality — have been asking themselves, “Where are we in the cycle?”

In June, Skift asked Marriott CEO Arne Sorenson that same question. His response? “I think the cycle is sort of a basic comment. The most important cycle is not a lodging cycle. The most important cycle is a GDP [gross domestic product] cycle. Where is the economy generally and what do we expect it to do over next couple of years?”

Well, the GDP results are in and they aren’t exactly stellar. Real GDP in the U.S. grew at an annual rate of 1.2 percent in the second quarter and in the first quarter, real GDP grew only 0.8 percent.

During Marriott’s second quarter earnings call, which was held before the U.S. Bureau of Economic Analysis report came out, Sorenson anticipated a weaker GDP.

“We now are making a forecast based on, essentially, the current face of GDP growth in the United States which is weak, not on a more rosy scenario,” he said. “Is it possible the U.S. economy performs worse than that? Of course it is. But when you look at the range of economic data that comes out including recent employment reports and consumer confidence reports and corporate profits and some of those sorts of things, it looks to us like it’s a reasonable good bet that the economy will continue to grow, albeit grow maybe somewhat anemically. And there does not appear to be data out there which would suggest that it is getting meaningfully weaker from a GDP perspective.”

Choice Hotels CEO Joyce, when asked how he felt about the economy on CNBC, said, “Until we got the last estimates out, I was feeling better.”

Still, he said he remains optimistic that the hotel industry can still do well. “Here’s the interesting thing,” he said. “The hotel business, because of low supply growth, has done incredibly well without any support from GDP. Now the fact that we still got a workforce that’s still under 63% employed is a big opportunity for us because a lot of those folks who are customers, if they get jobs, they’re going to start traveling again. So we would like, obviously to see a pick up toward the end of the year. We’re having a good year, and we’re going to have a good year, with or without, GDP.”

Bellisario said he believe the economy will continue to have “low growth” for the rest of 2016 but he and other investor analysts aren’t forecasting a downturn by any means.

Looking ahead, he said brands will be paying attention to what the federal government does, and what happens in the upcoming U.S. presidential election, but he “doesn’t expect too much change.”

“Supply is increasing and demand is slowing,” he said. “But even in the immediate term, it’s the new normal. That’s the new range we are in, with the economy not being strong enough and hotel fundamentals, whether increasing supply, dealing with pricing transparency, or Airbnb, what have you. Those risks are greater today and the economy is weaker today.”

Photo Credit: Hyatt CEO Mark Hoplamazian speaking at last year's Skift Global Forum. He and fellow hotel CEOs lowered their earnings expectations for the remainder of 2016. Skift