3 Biggest Global Hotel Markets Not Seeing Big Omicron Impact Yet

The Omicron variant’s impact to the hotel sector isn’t likely to appear until after the winter holiday season.

Hotel performance in the U.S., China, and Europe hasn’t drastically changed since the emergence of the latest coronavirus variant late last month. Hotel revenue per available room — the industry’s key performance metric — in the U.S. was up more than 20 percent from 2019 levels, according to STR. That likely had to do with the shift in Hanukkah, a Truist Securities report noted. 

China and Europe both saw improvement from the prior week in their latest hotel performance data. European hotel performance was 13 percent below 2019 levels (compared to a 19 percent drop two weeks ago) while Chinese hotels were down 28 percent from 2019 (compared to a 31 percent drop the week prior). 

There was good news this week that booster shots of either the Pfizer or Moderna vaccine protect against the variant. Omicron infections, while highly contagious, also appear to be milder than prior variants. 

This isn’t to say there aren’t reasons for hotel owners to be concerned. 

Major events and attractions — including several Broadway musicals in New York City, next month’s World Economic Forum in Switzerland, and a JPMorgan Chase & Co. healthcare conference scheduled for January in San Francisco — have either been cancelled, put on hiatus, or moved online. 

The Consumer Electronics Show, typically the largest convention in Las Vegas, is still scheduled to take place next month, but major vendors like T-Mobile and Amazon have pulled out.

China’s hotel performance numbers continue to be suppressed due to the country’s zero-tolerance policy already dampening occupancy rates. But the city of Xi’an went into lockdown after detecting a new cluster of cases — it wasn’t confirmed if any were tied to Omicron — this week, impacting the city’s 13 million residents. The lockdown comes weeks before China hosts the Winter Olympics in Beijing.

European countries unfurled various travel and capacity restrictions in response to rising cases, but there is a wait-and-see sense heading into the Christmas holiday. UK Prime Minister Boris Johnson ruled out a lockdown before the holiday, but areas like Scotland and Wales are instating capacity restrictions the day after Christmas.

“While the headline results vs. 2019 were very strong, we would be careful around making assumptions that Omicron had no or will have no impact, at least not yet,” the authors of the Truist Securities report noted in the U.S. release.