CEOs said they were encouraged by the current and future state of the industry at the 45th annual NYU International Hospitality Industry Investment Conference, held at the New York Marriott Marquis.
The NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality convened top hospitality industry executives and thought leaders from across the U.S. and around the world for a deep dive into the current state of the industry and what is to be expected in the months to come.
“The CEOs Check-In: A View from the Top,” featured hospitality executives who discussed the resiliency of travel and the state of the industry. Sara Eisen, anchor, “Closing Bell,” CNBC, moderated this discussion with Keith Barr, outgoing CEO, IHG Hotels & Resorts; Sébastien M. Bazin, chairman/CEO, Accor; Anthony Capuano, president/CEO, Marriott International; Leslie D. Hale, president/CEO, RLJ Lodging Trust; Mark S. Hoplamazian, president/CEO, Hyatt Hotels Corporation; and Christopher J. Nassetta, president/CEO, Hilton.
“If anybody in the room [has] any questions about the resilience of travel, I think those questions have been answered over the last couple of years,” said Capuano. “If you’ve listened to any of our earnings calls, we’ve all seen business come roaring back. Across geographies, across business segments, we are well ahead of where we were pre-pandemic. It’s proven that the phenomenon we saw pre-pandemic of shifts of spending away from hard goods towards experiences has expanded beyond younger generations across generations. And we don’t really see any slowdown, even in the face of some pretty troubling economic headwinds. Forward bookings were pretty compelling.”
Barr agreed. “Business is really great,” he said. “This is an industry that faced more headwinds during the pandemic than probably any other and probably has more tailwinds now than any other industry, especially with the global recovery. And now we see the U.S. being an incredibly robust and strong market. Europe continues to do really well, and then you have the recovery the rest of the world. China [made] a pivot on policy and all of a sudden, we all saw the industry was about 96% [of 2019] in the first quarter. In May, the industry was above 2019 levels—and that’s not even outbound travel yet coming back from China. We’ve got some great years in front of us.”
Hoplamazian said that business in Europe is “on fire,” especially business travel. “Business travel in Europe proper is tracking ahead is tracking ahead of 2019 levels,” he said. “It’s the only region or subregion that we have that is actually tracking ahead of the business transient travel. Group travel is coming back with some lag, and leisure has been just off the charts.”
Hale characterized the demand environment as balanced. “If I look at fundamentals today, they remain healthy,” she said. “We’re encouraged with what we’re seeing in the midweek trends and national accounts from the business travel perspective. Group remains strong. Booking pace is very encouraging. Leisure demand is normalizing as expected given that we don’t have the same backdrop today as we had last year, from the standpoint of alternative demand…as well as savings accounts and the general sentiment, and obviously international capital was restricted. That’s different this year.”
Bazin said the future is stronger than it was pre-pandemic. “It is different in nature,” he said. “Prices are through the roof and staying there, which is a surprise for us. It is more and more experience-driven, and more and more local-driven. And a lot of new clientele.”
Among the “new clientele” that Bazin is excited about is the emerging market of travelers from India. “People tend to forget, but India alone has probably 500 million people as a new emerging middle class who never really traveled abroad,” he said. “Those 500 million will go five hours away to Southeast Asia and the Middle East. If you get 10, 20 or 37 million of them, it’s a game changer for the industry.”
Barr likened this growing outbound India market to China in years past, which led to a discussion of the country’s recovery and its important outbound travelers.
Nassetta said he was in the country recently, and while it has seen a lot of domestic travel, international inbound travel, hasn’t happened yet. “There are not a lot of flights going into China,” he said. “There are not a lot of flights going out of China. They haven’t issued passports yet, but that is happening. You can start to see that gearing up. Outbound China, which is a huge benefit, when it does come to this country and to Europe—probably Europe first and then the U.S.—that’s coming in the second half of the year.”
