As uncertainty and new cases of the Omicron variant increase across the globe, some countries have reimplemented restrictions around travel. New restrictions obviously mean potential challenges for the hotel industry, and as we have seen throughout the pandemic, every class of hotel can be affected differently. In this latest piece, we look at how Luxury class hotels have performed around the globe, especially in more recent months.
With employees continuing to return to offices, ongoing vaccination progress, and the reopening of many international borders, the time would seem to be ripe for the return of business travel. Yet, even before the news of Omicron in recent days, there continued to be negative sentiment about the return of this segment whereas pandemic-era leisure travel sentiment remains buoyant. In November 2021, STR undertook an online survey of its Traveler Panel—an engaged audience of travel consumers—to examine the fortunes of the industry at this uncertain time.
As we get towards the end of 2021 and almost two years since the world has been living with Covid-19, across the aviation industry we’ve continued to talk about recovery in terms of air travel returning to pre-pandemic levels. Specifically, we tend to reference 2019, the last full year of air travel unaffected by this virus. With air travel growing year-on-year until then, 2019 is the high watermark in air travel, the year when global airline capacity and passenger numbers peaked.
The days before and after Thanksgiving are some of the busiest travel days of the year – so we took the opportunity to check back in and give an update on the travel and hospitality recovery as 2021 draws to a close. From April to July, the year-over-two-year (Yo2Y) monthly visit gap had been slowly but surely shrinking. But when we last checked in with the travel sector in late August, the summer season seemed to have ended abruptly, as the United States entered its fourth COVID wave.
Despite the best attempts of the latest Covid-19 variant 'Omicron', and a series of unilateral knee-jerk reactions from Governments around the world, global capacity this week remains stable. Rates are steady at 78.3 million, half of one percentage point down and the whole airline industry continues to watch events very closely, marvelling at the next crazy restriction that encourages travellers to find cunning ways to avoid taking a test. So far, fingers crossed at least, the airlines have not panicked.
Thanksgiving week for the U.S. hotel industry was record-breaking by all measures. Weekly occupancy topped 53%, which was 2.3 percentage points higher than the holiday week in 2019 and nearly a point higher than the previous record achieved in 2018. Thanksgiving Day occupancy (56.9%) fell a bit short to 2018’s level (57.3%) as did Monday’s, but occupancy on the other days of the week were at record highs. Looking at the 3-day weekend (Thursday to Saturday), occupancy reached 60.2%, 0.9 percentage points greater than in 2018 and 2017 which had been the bar to surpass.
Covid-19 has stretched the creativity of every airline network planner in the last twenty months as they changed airline schedules on a weekly or even daily basis in response to various lockdowns and changes in policy. At OAG we have seen exponential increases in schedule updates arriving from airlines around the world, and although it proves the creativity and resilience of an industry caught in a crisis, we all want to see stability return to airline schedules.
As COVID-19 cases rise in many parts of the world, especially Europe, the travel industry may be set for another period of disruption as winter encroaches and traveler sentiment worsens. Uncertainty in recent days has mounted further as the new Omicron variant has spread quickly, leading to many countries reimposing COVID restrictions. The situation is particularly ambiguous as recent months had produced stronger levels of hotel performance with vaccination progress leading to buoyed demand, reduced restrictions and the reopening of many international borders.
A new report from ForwardKeys reveals which destinations were the most visited since 1st November by travellers from the eight southern African countries currently designated as most at risk due to the Omicron variant of COVID-19 – namely Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa and Zimbabwe. The data supports calls from many people objecting to immediate travel restrictions imposed on travel to and from these African countries.
In partnership with European Cities Marketing and their Barometer Report, the analysts at ForwardKeys shone the high beam on the highs and lows of travel within Europe this summer and in the last quarter of a roller-coaster year. And a few nuggets were unearthed, showing the return of business and luxury travel back to Europe. There is increased demand for luxury travel. To illustrate this, we looked at passenger arrivals from Los Angeles to London and we see an increase in the share of passengers travelling in Business, First and Premium Economy classes.
It was always going to happen but after just one week of relatively little change in global airline capacity if feels like a trick is being played on the industry with the arrival of variant Omicron just before the year-end holidays. Stock markets panicked, airline shares plummeted, regulators applied new travel restrictions and airlines shrugged their shoulders and said, “here we go again”. Both as an industry and from the wider health perspective we are so much better placed to deal with another Covid variant but that doesn’t stop speculation
The overnight news of a possible new variant of concern emerging in Africa is clearly something that the aviation industry needs to be aware of. But, as famously said by Corporal Jones in _Dad’s Army_, a great TV comedy, “Don’t Panic”. Airline stock prices have taken a dive this morning, but perhaps that is an overreaction, and if we put the whole situation into context then this is perhaps just one more bump in the road to recovery that we expected, so what is that context?
The great aviation recovery is underway, or more precisely - airline capacity is rebuilding in many parts of the world, airline schedules are more stable than they have been all year, and if you are double vaccinated (and able to work out the paper trail of requirements) you can travel freely to most parts of the world. However, you are still unable to travel everywhere and, in a throwback to the mid-nineteenth century, there are markets that remain firmly shut for nearly all international travel and that is not good news for the airline industry.
The ForwardKeys team of travel experts have been closely monitoring the winds of change in the travel sector since the pandemic unleased, and up until recently, the air ticketing data was showing the Americas, especially the Caribbean, as the sole game changers when it comes to real-time travel recovery. However, Africa and the Middle East are also proving to be much more resilient. While the total global inbound figure for international arrivals as of October 2021 sits at -77%, for Africa and the Middle East this figure is at – 68%.
If last week was busy with IATA Slot, the Dubai Air Show and new aircraft orders, then this week is as flat as a pancake! Either nothing is happening, or everyone is taking a deserved break after the frantic activity of last week. In truth, it may just be this time of the year - pre-Thanksgiving, Winter ski season yet to start, and everyone saving their holidays for Xmas… we need the corporate traveller to return, any sightings anywhere?
STR’s latest 51-chart map shows a variety of recent national/regional trends as well as the general pace of the industry’s continued recovery. For the four weeks ending with 13 November 2021, more states closed the gap or exceeded their 2019 levels in revenue per available room (RevPAR) on a total-room-inventory (TRI) basis. Keystone markets, however, remain persistent holdouts toward further national recovery. Higher-than-expected average daily rate (ADR) along with strong weekend demand continue to underpin recovery.
The U.S. hotel industry saw its largest week-over-week demand gain since early October with 704,000 more room nights sold for the week ending 13 November 2021. Weekly demand has increased in 21 of the past 33 weeks and the most recent week’s gain was the 10th largest in that span. With the increase, occupancy advanced to 61.6%, up 1.9 percentage points from the previous week. Compared with 2019, occupancy indexed at 96, which was the highest level since early July. Average daily rate (ADR) also improved, up 1.3% week on week, to a level that was three percent higher than what it was in 2019.
‘Tis the time to give thanks in the USA and it appears sunny destinations both domestic and international are set to record growth on pre-pandemic US visitor numbers for the traditional exchange of turkey and well wishes. Travel analytics company ForwardKeys reveal the latest air ticketing data and trends placing Florida and El Salvador high on the travel agenda this Thanksgiving.
The US borders finally opened on November 8. Did that result in a material influx of tourists that will help increase hotel and retail traffic? Not yet... Let's review 5 airports that showcase both domestic and international travel: LAX and ORD (Chicago O'Hare) that capture international visitors from the Asia-Pacific region, and JFK and EWR (Newark) that capture traffic from Europe; plus LGA (LaGuardia) which has mostly domestic traffic for comparison.
The hotel industry rebounded slightly after two weeks of declines, gaining nearly a percentage point in occupancy during the week ending 6 November. The uptick was expected given that history shows a similar pattern after a Halloween Sunday. Of course, due to Halloween, Sunday demand was down significantly with decreases also seen on Monday, Tuesday and Wednesday. Week over week, average daily rate (ADR) was nearly flat (+0.2%) and revenue per available room (RevPAR) increased 1.8%.
