Total Rewards Action Recording: The Pandemic's Impact on the Hospitality Industry - 11/12/20

Effects of the Pandemic on the Hospitality and Tourism Industries

Featured guests on the November 12th i4cp Action Call for the Total Rewards community were Louise Slark and Brian McCartin.

Slark is Vice President of Total Rewards for Choice Hotels. The firm is among the world’s largest lodging companies with over 7,000 hotels representing 570,000 rooms in 40 countries. Choice Hotels is a 100% franchised organization, and most franchisees qualify as small businesses.

McCartin is President and CEO of the Tempe Arizona Tourism Board, a destination marketing organization (convention and visitor bureau) that markets the city of Tempe, Arizona, a suburb of the greater metropolitan Phoenix area. A college town, Tempe has a population of about 185,000. McCartin’s organization focuses on economic development through tourism and is funded by the City of Tempe, primarily through hotel taxes collected from visitors.

Key Ideas Shared Today:

  1. Hotel and tourism firms have experienced large business losses
    • Data on both industries show huge financial losses in 2020.
    • Slark says Choice Hotels has been somewhat more resilient than competitors because of its varied brands and locations, however revenues per available room are down 29% from Q3 of 2019 and impact was even greater in Q2.
    • Economic impact of tourism is critical to Arizona. Pre-COVID, 46.9 million people visited the state (site of the Grand Canyon) yearly.
    • Travel spending in Arizona through September 2020 is down $10 million; hotel occupancy is down 28%, and tax revenues are down $405 million.
  2. Organizational leaders have responded effectively to the pandemic
    • Leadership teams at Choice Hotels responded quickly and decisively to the pandemic, prioritizing assistance to franchisees and providing them with needed support and information.
    • Protocols for cleanliness and for food production were developed and shared.
    • Both guests noted that their leadership joined with others in their industries to lobby for government assistance and to advocate for their industries
  3. Business rebounds won’t happen quickly, and business may return in different ways
    • While the hotel and tourism industries are seeing some positive upticks in business, the type of activity is shifting.
    • Currently, hotels are offering compelling travel deals. Remote work, combined with employer flexibility, has enabled families to take road trips over long weekends.
    • Business and international travel remains depressed, however there is growth in the driving travel market, and the Tempe Tourism Board is marketing to drivers from surrounding states.
    • Consumer tolerance for risk is increasing as pandemic fatigue grows; travelers are more likely to feel comfortable with a branded hotel chain versus other accommodation options.
    • Relocations of companies from cities to smaller areas is keeping extended-stay hotel brands busier.

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