It's clear that when Covid outbreak spikes diminish, travel will not revert to precisely how it was before. There will be winners and losers when cities and borders reopen.
Tyler Morse of MCR Hotels and Steve Hafner, the Kayak CEO with three hotels now in the fold, stared into two different crystal balls concerning the future of lodging. Morse argued that the business versus leisure travel mix will return to pre-pandemic levels while Hafner said the changes will be more durable.
Morse, whose MCR Hotels is now the third largest operator in the U.S., said the divide currently is 90 percent leisure and 10 percent corporate travel in the hotel industry, but he expects that to flip back to traditional levels, namely 70 percent corporate and 30 percent leisure travel.
“The hotel industry will revert to the mean like it always has,” Morse said.
Hafner countered that the mix may return to 70 percent corporate and 30 percent leisure at the Sheraton New York Times Square Hotel, which MCR Hotels recently acquired, but many people in the future will book alternative accommodations and avoid Marriott International properties. Sheraton is a Marriott brand.
The changes, including shorter booking windows and longer lengths of stays, will be more durable, Hafner said. He argued that traditional corporate travel won’t echo its previous shape, although spending levels may return.
Kayak co-founder and CEO Steve Hafner and MCR Hotels chairman and CEO Tyler Morse spoke at Skift’s Future of Lodging Forum Wednesday on “What’s Next for Hotels as They Stay Ahead of Consumer Demands” in a discussion moderated by Skift founder Rafat Ali.
Morse said he agreed with Hafner that travel patterns will be robust. Travelers are “jumping up and down on their masks right now” because they want to take trips and gain experiences, and they’ll even borrow money to travel if they have to.
“It’s just a question of how you split the pie,” Morse said, arguing that Airbnb will take a slice and so will the Marriotts.
Hafner said at his travel metasearch platform Kayak, people know the types of accommodations they are looking for — either they are looking for a short-term rental or hotel, and they are not necessarily open to both options.
The two different over some aspects of distribution. Noting that is TWA Hotel and John F. Kennedy Airport does not use online travel agencies like Hafner’s sister company Booking.com, Morse said hotels need to take more risks and to experiment with turning off online travel agencies.
Unlike hotel flags, Morse said, one attractive thing about online travel agencies is that you can easily return to using them if a hotel turns them off, and then needs to return for distribution purposes.
Hafner countered that some of Morse’s properties indeed use Kayak for distribution and that only a subset of hotels have the brand strength to boycott online travel agencies. The Kayak CEO added that his company can help hoteliers reach travelers, such as Chinese tourists, that they couldn’t otherwise reach.
That was a reference to a for-now bygone era, however, namely when there were Chinese international travelers.
Photo credit: (From left) MCR Hotels CEO Tyler Morse, Kayak CEO Steve Hafner, and Skift CEO Rafat Ali discussed the durability of changed travel patterns at the Skift Future of Lodging Conference in New York City May 11, 2022.