Hyatt Hotels CEO Mark Hoplamazian said on CNBC on Thursday that he is bullish on a recovery in the hotel industry, driven by leisure travel, as Covid-19 vaccines become more widely available.
While bookings will continue to face headwinds over the next few months, more consumers will be confident and ready to take trips, he said in an appearance on “Closing Bell.”
“We see that there’s a clear path to recovery from here,” Hoplamazian said. “I am optimistic that travel will fully recover.”
The hotel industry was devastated in 2020 after both business and leisure travel plummeted, in addition to international travel restrictions put in place to fight the spread of coronavirus.
Net bookings have steadily increased since the start of 2021 and occupancy rates industrywide are showing signs of rebounding. The industry occupancy rate in the last week of February was just below 50%, up from a trough of 22% in April of last year, he noted.
Chicago-based Hyatt found many of those new bookings are coming from spring break travel to resorts and destinations such as the Caribbean and Mexico. Lodging for business and meeting purposes is showing signs of recovery, while some consumers are starting to put in placeholder stays for the holiday travel season later this year, Hoplamazian said.
“I think the rumors of the end of big conventions and meetings are greatly exaggerated, and we’re seeing some now corporate bookings into the second and third quarters,” he said. “We’re hopeful that we can maintain that.”
Though domestic travel is picking up, gateway markets that depend on international vacations will continue to have a tough year, Hoplamazian said.
The travel sector was one of the parts of the economy hit worst by coronavirus-era mandates. Hoplamazian, who has led Hyatt since 2006, said it was the worst year for the business he has ever seen, adding that it was “emotionally devastating” to lay off hotel workers during the pandemic. The company announced layoffs of 1,300 people globally last May.
Hotels have been hiring employees since the beginning of the economic downturn, but last month’s Labor Department report showed that the industry’s workforce remains down 3.5 million from pre-pandemic levels. The sector now has an unemployment rate of 13.5%, down from 15.9% in January.
Hoplamazian said it will take some time for those jobs to return. After total revenues increased double digits in 2019, business plunged 58.8% to below $2.07 billion in 2020. Revenues depleted 80% year over year in the second quarter alone.
Hyatt’s portfolio of hotels has more than 975 properties, including Hyatt Regency and Miraval, in nearly 70 countries around the globe.
“We’ve come a long way, and it’s also true that we have a long way yet to go,” he said.
Hyatt shares rose 1.65% to close at $86.25 on Thursday. The stock is up more than 16% year to date as investors pile into cyclical stocks, betting on a strong economic recovery from the coronavirus-induced recession.
