U.S. Commerce Secretary Raimondo hears your concerns, hotel industry. But how about some action? Until U.S. authorities outline a clear path to reviving key global business travel corridors, many sleepless nights are ahead, wondering what happens after Labor Day when leisure travel dissipates.
Hotel owners desperately in need of business and international travelers didn’t get any clear answers this week from U.S. Secretary of Commerce Gina Raimondo on when to plan for the return of those groups.
Leisure travel is still fueling a bulk of the accelerating U.S. hotel recovery. But what happens with business travel post-Labor Day is “what keeps us awake at night,” American Hotel & Lodging Association CEO Chip Rogers said this week on a webinar with Raimondo.
The commerce secretary didn’t reply with any specifics on sleep aids.
“So I hear you, I hear you, and I want you to know that I am doing everything I can as an advocate to help reopen key travel corridors to business … internationally, like the U.S.-UK corridor and also just encouraging people to think about traveling again,” Raimondo said. “There are safe ways to travel, particularly for those who are fully vaccinated. The [U.S. Centers for Disease Control and Prevention] has said so and, with the CDC clearing the way, I’m going to do everything I can to revitalize domestic and international business travel through the multiple agencies that report up to me.”
Raimondo did not provide any further details on that process nor did Rogers push her to provide any. Without these travel corridors open, hotel operators in major cities still feeling a more pronounced impact from the pandemic than those in leisure markets will have to quickly market themselves to new customers.
As much as a quarter of the pre-pandemic business at the Baccarat Hotel and 1 Hotel Central Park in Manhattan came from international travelers, SH Hotels & Resorts CEO Arash Azarbarzin told Skift earlier this year. Major cities like Boston, Washington, D.C., and San Francisco have typically been at the bottom for hotel occupancy rates during the pandemic due to their reliance on business and international travel to fill hotel rooms.
Raimondo offered vaccination efforts as her only real specific in reopening borders and giving businesses confidence to once again send travelers on the road. To be fair, accelerated vaccine initiatives have correlated to the stronger recoveries in China and the U.S. Larger domestic travel bases in both countries have also helped their respective travel economies recover faster from the pandemic than markets in Europe.
The U.S. hotel industry had an average 68 percent occupancy last week and was just shy of 14 percent off pre-pandemic rooms revenue levels, according to STR — outpacing China for the third straight week. That’s much better than the 27 to 33 percent declines off pre-pandemic revenue levels seen this spring, according to a Truist Securities report.
But strong leisure, domestic travel doesn’t always help the owner of a hotel in a major urban center. Hotel companies in China, which had led the world in a hotel recovery until recently due to an outbreak of new cases, reported better performance over the last few months in smaller cities than markets like Shanghai or Beijing.
“I can promise you this: Getting business travel going again and getting international travel going again is a top priority from the president in the White House on down across government, and we are collaborating across government to do everything that we can in order to ease travel restrictions safely,” Raimondo said.
Raimondo’s remarks came after the UK travel sector protested this week for the British government to accelerate plans to reopen borders. Business travel out of the UK for the second week of June was down 68 percent from the same week in 2019, Skift reported earlier this week.
Select European countries like France and Italy have reopened to international travelers. But the U.S. continues to restrict entry to travelers from the UK and 26-country European Shenghen area, which includes countries like France, Germany, and Italy.
While the U.S. and UK announced plans this month for a task force committed to reopening travel between the two countries, that plan was as sparse on details as the commerce secretary’s comments this week.
“I have been in continuous contact with CEOs of the cruise lines. I’ve been engaged very actively with stakeholders across your industry,” Raimondo said to the hotel lobbyist organization. “We hear the message loudly, and clearly we know how important this is. And all I can do is assure you that we’re on it, and we’re going to move as quickly as is safely possible.”
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Photo Credit: Secretary of Commerce Gina Raimondo addresses reporters Wednesday April 7, 2021, in the James S. Brady Press Briefing Room of the White House. The U.S. still isn't divulging any clear timelines to the hotel industry on when to expect international travel to reopen. Cameron Smith / Official White House Photo