Skift Travel News Blog

The U.S. leisure and hospitality sector in February continued its recovery from the pandemic, according to a report from the U.S. Labor Department on Friday.

Government surveyors estimated that U.S. businesses created 311,000 jobs in February. About 14,000 of those jobs were in travel accommodation, mainly hotels. That was down slightly from a 15,000 reported gain for hotels last month.

On the one hand, many U.S.-based hotel groups reported in February hotel earnings calls that they feel broadly back at their full labor quotas, with labor gaps no longer a pressing issue.

On the other hand, 1.7 million leisure and hospitality jobs are open.

The remaining 91,000 added jobs were in restaurants and leisure and hospitality broadly. Employment in the broader leisure and hospitality was only below its pre-pandemic February 2020 level by 2.4 percent, suggesting a full recovery is in the offing.

“One way the federal government should address our workforce shortage is to increase the allotment of H-2B visas, which is at least 100,000 short of demand, to provide the industry with the temporary workers it so desperately needs,” said U.S. Travel Association president and CEO Geoff Freeman.

The national unemployment rate was estimated at 3.6 percent. On the plus side, low unemployment can fuel travel spending.

“There is still a much room for further services spending, greatly benefitting travel,” said Dan Roberts, vice president of research at Visit Virgina, a destination marketing organization. “Rotation of consumer spending from goods back into services, as has been the case for months now, is the story.”

On the downside, many commentators suspect the robust jobs report may embolden the U.S. central bank to boost interest rates. Such a move by the Federal Reserve risks overshooting economic trends, accelerating a contraction beyond what’s necessary to tamp down inflation and thus reducing economic growth in the second half of the year.

CLARIFICATION: A typo in the original version gave the wrong year for the pre-pandemic February 2020 level.

Membership Collective Group is best known for its Soho House upscale member’s clubs and hotels and for being unprofitable for decades. The London-based company wants to change both of those things, it said during a Wednesday earnings call.

In a few weeks, it will change its name to Soho House & Co., and its executives said they have a path to profitability.

On Wednesday, Membership Collective Group reported that it had narrowed its losses in the fourth quarter, year-over-year. It had a loss of $13 million on revenue of $270 million.

“We’ve raised prices by a double-digit percentage this year,” Carnie said on Wednesday. “Since we’ve increased our new member pricing, we continue to see super high applications, which shows the strength of our business.”

Total members grew to 226,830, up 7 percent on the previous quarter.

The company forecasts that its 2023 revenue will come in between $1.1 billion and $1.2 billion. That partly reflects a moderation in the pace of its network expansion. The company is returning to a 5 to 7 openings a year pace — which is a pace that’s easier to streamline and keep profitable.

The company’s streamlining push has a few key areas, including analyzing data to find operational efficiencies.

Data analysis has, for instance, shown that its members are using their facilities just as much post-pandemic as before Covid, but they’re doing so at different times. So the company has adjusted how it schedules its staffing to reduce its in-house operating expenses.

“Wages as a percentage of revenues dropped approximately 1,000 basis points in December versus August last year,” Carnie said of this initiative’s impact.

The company has been trimming the production of content, digital, and other corporate expenses. In one example, it will cut its “editorial content” expenditure by about 40 percent “going forward.”

In recent months, the company said it has found “sizable opportunities” to be more cost-efficient in how it procures supplies for its food-and-beverage offerings.

“The changes we’ve made in our F&B program continue to drive growth margin expansion with like-for-like F&B margins 230 basis points above the final quarter of 2019,” Carnie said.

“It’s still early days in terms of driving the benefits of these profit initiatives, and we have much more to go,” Carnie said. “But we’re on track, and we feel confident that this will help us generate stronger, more [consistent] earnings going forward.”

Nigeria’s Transcorp Hotels, one of Nigeria’s biggest hotel players, reported that it had returned to profit in 2022 after a rough pandemic.

The company reported a full-year 2022 profit before tax of $9.8 million (4.5 billion Nigerian naira) on $68.2 million (31.4 billion naira) in revenue.

“This impressive achievement is the highest revenue generated since the inception of the company,” said Dupe Olusola, CEO and managing director. “The full-fledged return of the international business travel segment and the bolstering leisure segment contributed immensely to this performance.”   

The company doubled its net profit margin year over year from 7 percent in 2021 to 14 percent in the year 2022. It reported a $5.6 million (2.6 billion naira) profit after tax.  

But the operator and the owner of landmark properties Transcorp Hilton Abuja and Transcorp Hotels Calabar still has potential room to grow for profitability. Its profit after tax in 2022 was the same as it was in 2015, a year when the country endured a six-week closure of its major airport.

Transcorp Hotels is a hotel operator that’s a three-decade-old subsidiary of the conglomerate Transnational Corporation of Nigeria, with interests in energy and agriculture.

The Transcorp Hilton Abuja will add a state-of-the-art convention center this year, after having just added a premium spa. A luxury hotel in central Lagos is also in development. 

Since 2021, the company has been attempting an expansion into Airbnb-like travel categories by running a listing marketplace for vacation rentals and experiences. Transcorp Hotels, runs Aura, a mobile booking app and website that lets entrepreneurs list short-term rentals, tours, activities, and restaurants, as Skift has profiled before.

For a profile earlier this month on CEO Olussola, read Nigeria’s Independent.

Travel technology giant Sabre said on Wednesday that Sean Menke, who has been CEO of the company since 2016, will become executive chair of its board on April 27, at which time its current president, Kurt Ekert, will become its CEO, too.

“It has been an honor and privilege to help lead Sabre over the last eight years,” Menke said. “I am proud of what our teams have accomplished and how we’ve served our customers during unprecedented times.”

Ekert joined the Southlake, Texas-based company in January 2022 as president and has since developed new growth strategies while reorganizing its largest business division. He had previously been president and CEO of the business travel management company CWT (Carlson Worldwide Travel) for five years. Ekert has also served at Continental Airlines, Cendant, and Sabre’s smaller rival Travelport.

Last week, Skift highlighted Sabre’s strategy for 2023 and beyond.

Marriott International said on Friday that its chief financial officer, Leeny Oberg, will now also lead the company’s global development organization, responsible for the strategic growth at the world’s largest hotel operator.

As executive vice president for development, Oberg will advocate for the Bethesda, Maryland-based company’s portfolio of 31 brands as the company aims to woo investors and developers to pick its offerings.

In related news, CEO Anthony Capuano on Friday became president, not just top boss. Capuano added the title after Stephanie Linnartz, the previous president, left Marriott to become CEO of Under Armour.

Marriott also said on Friday that it had appointed veteran Tina Edmundson president of luxury, and long-time leader Peggy Fang Roe as executive vice president and chief customer officer.

Leeny Oberg has long had an intimate fluency with the group’s strategic plan — regularly on display in analyst calls with investors and public presentations. She spoke on-stage in New York as Marriott International’s chief financial officer at Skift Global Forum 2019. Video, here:

Marriott Vacations Worldwide Corp‘s new CEO John Geller said on Thursday that the company’s fourth-quarter earnings underscored continued strength in leisure demand for its timeshare properties, package tours, and other offerings for travelers, despite talk of economic uncertainty.

In the fourth quarter, the company generated a net income of $88 million off of $1.19 billion in revenue. Revenue rose 8 percent year-over-year, thanks partly to the company’s lodging averaging nearly 90 percent occupancy.

The company said consolidated vacation ownership contract sales — a key metric in the sector — was $454 million in the quarter, up from $406 million a year earlier. Executives forecasted that the company would end 2023 with contract sales up between 5 percent and 9 percent.

Thursday was the first earnings call for John Geller as the company’s CEO, president and director.

“The past two months have felt a lot like when I joined the company just over 13 years ago, full of potential and possibility. Long term, I expect our timeshare and exchange business to remain the core of our business model while we look to add to our growth by diversifying into adjacent leisure-focused businesses where we can leverage our core capabilities. And finally, I want us to find new ways to unlock the power of data through advanced analytics to improve efficiency and drive top-line growth.”

—John Geller, CEO of Marriott Vacations

Marriott Vacations Worldwide’s international active members rose 21 percent year-over-year to 1.6 million.

But average revenue per member — another key performance metric — fell by 17 percent year-over-year.

In January, the company said that beginning this summer, it would rebrand all of its recently acquired Hyatt legacy Welk resorts as Hyatt Vacation Club.

Later this year, it plans to expand the vacation experiences available to Hyatt owners with a new exchange option called Beyond, allowing them to use their ownership for cruises, tours and hotel stays.

Earlier this month, the company acquired a parcel of land in Charleston, South Carolina, where it plans to develop a 50-unit Marriott branded resort, including a new on-site sales gallery by 2025.

Travelers are only modestly more dissatisfied with hotel stays on average worldwide than before the pandemic, according to a review of 6 million user-generated reviews and 20 million online comments. But North America stood out as a region where many guests felt hotels were underperforming compared to 2019.

Shiji ReviewPro compiled its 200-page hotel guest sentiment report for 2022 based on hotel guest satisfaction reviews and scores for the full year, including year-over-year comparisons back to 2019 and 2021 and taking into account reviews from 7,500 hotels worldwide.

The new study will highlight issues of concern to hotel owners and operators, who are debating whether they need to add back full staffing and service or whether guests will generally accept a leaner post-pandemic level of service.

In 2022, the global review index — a measure of guest satisfaction — was 84.3 percent, 1.7 points lower than in 2019, according to Shiji ReviewPro. Decreases were most pronounced among 3-star hotels, which lost 2.0 points from 2019 to 2022.

Labor challenges appeared to be a key issue.

To make the sample statistically relevant, the report looked at comparable numbers of hotels in five regions that are representative of each region’s makeup by category type.

North America saw the biggest decline in guest satisfaction of the five regions. In 2022, the Global Review Index for hotels in the Shiji ReviewPro data set was 83.3 percent, a drop of 3.5 points from 2019. Three-star hotels showed the steepest decline, losing four points. The results dovetailed with research last year from J.D. Power.

Booking.com accounted for an incredible 41.8 percent of global review volume in 2022, an increase of 12.9 points over 2019. Concerning the 66 review sites and online travel agencies in 45 languages included in the study, there has been no exclusion or bias: all reviews, regardless of platform, are included for each of the hotels the company analyzed, Shiji ReviewPro said.

Shiji ReviewPro is one of the three largest vendors helping hotels and the industry manage and understand user-generated reviews, customer feedback, and guest sentiment. Competitors include Revinate and TrustYou.

Last July, Wyndham Hotel & Resorts unveiled an effort to help Black dealmakers, franchisees, and developers join the club of hotel entrepreneurship. The U.S.-based hotel franchisor updated the media on Wednesday about the U.S. effort, saying it has signed deals for 18 hotels.

Wyndham — which calls its program Bold[Black Owners and Lodging Developers] — highlighted two Black hotel investors as examples.

Twin brothers Dubi and Chuchu Ajukwu, had invested before in residential and commercial real estate as co-managing partners of VANA Partners. But they hadn’t considered investing in hospitality until the Wyndham program.

“Participating in BOLD by Wyndham has not only enabled us to break into competitive markets with immense growth potential but also allowed us to leverage the scale and resources of the world’s largest hotel franchising company,” said Dubi Ajukwu.

The developers wanted a segment with strong long-term growth in markets that most excited them. It helped them identify the extended-stay sector and to set a goal of owning several properties throughout Florida and the Southeastern U.S., with the brothers hoping to break ground on their first hotel, an ECHO Suites Extended Stay by Wyndham brand, in Daytona Beach later this year.

Marriott International CEO Anthony Capuano on Tuesday toured the Evirma, the first sailing vessel in The Ritz-Carlton Yacht Collection. Capuano said in an interview that yacht-style cruises on the 623-foot Evrima — which hosts fewer than 300 people at a time — represent an important pillar of growth for the world’s largest hotel operator by pulling the levers of loyalty and luxury.

More than 70 percent of the bookings since the first October sailing has come from members of Marriott’s Bonvoy loyalty program, and the company sees the yachts as a way to fill in the matrix of interest in its program members.

“Luxury is a big part of the appeal of the Bonvoy program and a big driver of engagement with Bonvoy,” Capuano said.

Fares on the Evrima start at a minimum of $5,000 per person for a week and can rise beyond $25,000 per person.

About 70 percent of Evirma passengers have never been on the cruise before. So the offering is a way to leverage the Ritz Carlton brand name for additional spending from an existing customer base.

“It is core to our strategy to continue to look for ways to connect ourselves with our loyal customers throughout their travel journeys, whether you and I were talking about Marriott Homes and Villas or the launch of a mid-scale like City Express or the Ritz-Carlton Yacht Collection — they are all touchpoints that allow us to meet the needs of our consumers without ever looking outside the ecosystem,” Capuano said.

Yacht-style itineraries enable a more leisurely pace with more overnights in port than the typical large luxury cruise offers, plus the ability to access and explore smaller ports, such as Saint-Tropez, Ibiza, and St. Barts.

But playing in the luxury space has its perils. The more complex the product and the more high-touch the service, the more room there is for cost overruns. Spanish media have reported on financial filings from a shipyard claiming that the Evirma was budgeted at $300 million but cost twice as much.

Capuano said that the last few years brought a laundry list of “unusual challenges to owner economics,” with a mix of problems affecting supply chains. However, he said his company has long experience in executing luxury products well.

Marriott is the first of its hotel and resort peer companies to test the waters on yacht-style cruising, but three other companies in recent months — Four Seasons, Aman, and Orient Express — announced plans to offer luxurious yacht-style cruise lines.

More broadly, luxury is a key segment in Capuano’s vision for company growth.

“I continue to drive focus within the organization on luxury,” Capuano said. “Luxury represents about 10 percent of our global room inventory but about 20 percent of revenues through related fees. So from a purely economic perspective, the luxury portfolio and footprint are critically important.”

Marriott runs nearly 500 luxury hotels and resorts, with plans to open about 35 more luxury hotels this year out of a pipeline of roughly 200 properties.

“You can continue to see us make investments movements of dedicated capital to ensure that we maintain our significant lead in the luxury tier,” Capuano said. “We have a singularly unique portfolio in that we have a really compelling blend of classic luxury brands like Ritz Carlton and Saint Regis and emerging lifestyle luxury brands like Edition and W Hotels.”

Japan intends to draw a record number of inbound travelers in 2025, according to a draft of a government plan seen by Kyodo News on Thursday.

The 2023 to 2025 tourism plan also strives to boost per-person spending to $1,500 (200,000 yen) — up about 25 percent from the pre-pandemic level. The plan includes marketing efforts to coax travelers to visit more than just Tokyo and other well-known cities.

This proposal would be a return to Japan’s ambitious tourism trajectory. At 2020’s start — before the pandemic went global — Japan had aimed for a year-end goal of welcoming 40 million tourists, as Skift reported at the time. That would have been the country’s highest-ever visitor count.

The new plan is still subject to change and would need approval by the governmental cabinet.

Japan spent more than $1 billion over a decade to become more friendly to foreigners to welcome people to the Summer Olympics. That spending might yet pay off, even though the Olympics were a financial bust.

As Skift reported recently:

“Compared to before, Japan now offers more extensive free Wi-Fi, more infrastructure supported with multilingual signage, and increased deployment of universal designs for those with disabilities,” said Michiaki Yamada, executive director of the Japan National Tourism Organization’s New York office since May.

In recent months, the Japan National Tourism Organization (JNTO) said arrivals were rebounding but remained down roughly two-thirds below the pre-pandemic levels of 2019. (You can see Japan’s latest tourism statistics here.)

Japan’s depressed yen has attracted tourism from new markets with temporarily stronger currencies.

“Passenger demand from Canada to Japan is more than double what it was in 2019,” Reuters reported.