Hotel Execs Say Remote Work, Retired Workers Will Fuel 2023 Demand
Workers aren’t in the office on Fridays, hotel operators say — because they’re working out of hotels.
The hotel sector may finally recover this year from the beating it took during the worst of the pandemic, industry figures say. Remote work, plus disposable income from consumers who took early retirement and employees whose wages rose, are pushing hotel revenues higher, Hotel News Now reported.
“If you look at remote work, it’s really sort of lifted that constraint of time where the workweek is now maybe three days a week and the other two days of the week people have the flexibility to work from anywhere,” Choice Hotels International CEO and President Pat Pacious said at the ALIS conference in Los Angeles this week. “In our business, we’re seeing more Thursday night check-in for weekends and Monday morning check-out.”
Although business travel is still lower than pre-pandemic levels, that’s in part because labor force participation is still low, Pacious said. However, that demographic shift is resulting in a boost for another type of hotel customer.
“With all the retirements that you’re seeing … a lot more people have freedom to travel because they’re not in the workforce,” Pacious said, per HNN. “We’ve always had a strong base of retired baby boomers, and we’re seeing more of that influx into our hotels.”
A third component poised to fuel growth for hotels this year is wage trends, according to Sloan Dean, CEO and president of third-party management company Remington Hotels.
The hotel sector still hasn't fully recovered from the pandemic like other areas of the economy, hampered by inflation and high gas prices that put hurdles in the path of vacation plans across the country. Business travel is still muted, and fears over a potential recession are viewed as another obstacle to leisure travel for many, kicking hotel operators’ hopes once again.
Nonetheless, hoteliers are confident in a full recovery in 2023 — CBRE projected as much in the summer, accelerating past forecasts — so much so that Hilton, Accor and Sonesta have all launched new hotel brands this year.
“You look at what segments do you need to be in, what brands do you need to be, in to meet guests’ evolving needs and owners’ capital investment desires,”said Elie Maalouf, CEO of the Americas at IHG Hotels & Resorts. “Where you are in a segment, you grow it; where you’re not in a segment, you go into it.”