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At the How To Find Alternative Sources of Revenue in Your Hotel session at the recent Hotel Data Conference, executives from the hotel industry discussed the different ways hotels found themselves looking to drive business during the pandemic in 2020 when travel restrictions put a stop to room revenue.
Some of the ventures mentioned included offering takeout cocktails and using otherwise empty rooms as office space, and according to the panel, some of these may not go away simply because room revenue is returning.
Founder and Chief Vision Officer for Indigo Road Hospitality Group, Steve Palmer, talked about how people are still seeking safe spaces outdoors and that those hotels that had rooftop restaurants and bars were doing particularly well. He commented that this would and should probably have an impact on future hotel development, saying: “I can't believe anybody would build a hotel without a rooftop bar. The ROI on those bars is incredible."
According to a recent survey from TripAdvisor, 31% of U.S. adults had travel plans for this Labor Day weekend (September 3-6). This is on track with holiday travel for the same time last year (32%) and not too far away from where it was in 2019 (35%).
The survey also shows, however, that 22% of U.S. travelers still didn’t know if they were going to travel over the holiday weekend or not. The majority of U.S. travelers have been booking trips at the last minute (70% of trips booked on TripAdvisor in the first week of August were for travel within the next three weeks), and therefore many who were undecided may have still traveled.
According to Phocuswright's ‘Eastern Europe Travel Market Report 2020-2024’, while the whole of Eastern Europe has been affected by the COVID-19 pandemic, the response of each country’s government has varied.
For example, Bulgaria - one of the countries hit hardest by COVID, still required proof of vaccination, recovery from COVID, or a negative COVID test to enter the country as of July 2021. However, in Greece, the majority of travel restrictions were removed in spring 2021, and visitors from 53 approved countries could go there without the need for quarantine. This is perhaps related to the fact that 20% of Greece’s population work in the travel and tourism industry.
Domestic travel has been vital for the survival of several Eastern European travel markets. In Russia, many restrictions were lifted in May 2020, with citizens reacting quickly by booking domestic trips to places such as Sochi's beaches or cultural breaks to Moscow and St. Petersburg.
Highgate Ventures Principal, Kurien Jacob, said during the 2021 Hotel Data Conference, that although hotel industry-wide adoption of technology that supports automation on properties is inevitable, the COVID-19 pandemic "accelerated the digital transformation of hotels throughout the world."
Jacob pointed out that hotels have had to embrace tech that enabled automation ‘from the point of selling their rooms — distribution, pricing, revenue management — all the way up to contactless check-in’.
He said: "Hotels have also had to do more with less, so staffing at hotels has become a big issue. Hotels have figured out how to use technology ... to help drive certain results with much less staff."
He also commented on his belief that tech will be essential for hoteliers if they want to avoid information overload.
He said: "The other problem is there's huge amounts of data. The key is: how do you distill through this entire data explosion that's there and pick up the right information trends ... to help you make those decisions better? There are a lot of tools and technology available to help bring that to the fore. And in some cases, it's important for machines and artificial intelligence to help hotels distill through that data."
Genting Berhad’s 2Q21 financial reports have shown that the company’s newly opened US flagship, Resorts World Las Vegas (RWLV), generated revenue of US$14.9 million and EBITDA of US$3.9 million during its first six days of operation in June 2021.
The US$4.3 billion resort was the first brand new casino-resort development on the Vegas Strip for more than ten years, opening to the public on June 24, 2021. Offering 3,500 hotel rooms and 40 F&B outlets, as well as considerable retail and MICE space and 117,000 square feet of casino floor, it’s estimated that if those figures were to continue, RWLV would pull in approximately US$75 million of revenue and US$20 million in EBITDA each month.
Genting said that during that first week, hotel occupancy was 71.2% and the average daily rate was US$239.
The company said: “Additional amenities will be completed and opened in the third and fourth quarters, including The Theatre at Resorts World Las Vegas, Zouk Nightclub and the Spa.”
Analysts predicted that the property could generate up to US$300 million in EBITDA annually once it’s fully ramped.
As of August 30, the UAE is now opening tourist visa applications for fully vaccinated people from all countries, as long as they have one of the COVID-19 vaccines approved by the World Health Organisation.
The announcement was made jointly by the Federal Authority for Identity and Citizenship (ICA) and the National Emergency Crisis and Disasters Management Authority (NCEMA).
A statement said: “The decision applies to citizens of all countries, including those arriving from the previously banned countries. Arriving passengers on tourist visas must take a mandatory rapid PCR test at the airport. The previous rules for unvaccinated, including exempted categories, remain in place.”
Travelers are being encouraged to register their inoculation on the ICA platform or the Al Hosn application.
During ‘The Development sweet spot: Plotting hotel performance amid shifts in CRE supply’ session at the 2021 Hotel Data Conference, CoStar Director of Hospitality Analytics, Emmy Hise, said that high hotel occupancy in a market is not necessarily an indicator of future hotel development.
She said: “There’s clearly more to the story than high occupancy for hotel development.”
A study of the top 10 U.S. hotel supply markets from 2015 through 2020 looked at growth of population and employment, increases in office square footage inventory and retail square footage, and multi-family units and hotels, and how those factors coincided with development booms.
Hise said that each of the top 10 supply markets had a boom in employment as well as population, but not always in that order. Multi-family units were the first commercial real estate to be developed, followed by offices, with retail not really featuring in the trend.
She added: “The last thing, and last among almost every single market, was hotels.”
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