Hotel executives have recently been focusing on adjusting to “normalized” labor patterns and the impact of inflation on their businesses. Apple Hospitality, a real estate investment trust that owns hotels, has seen its labor costs ease due to a more competitive job market. While inflation is moderating, some costs are still spiking, such as operational costs like serving complimentary breakfast and property insurance premiums. The hotel industry is also focusing on chasing higher rates rather than higher occupancy in an effort to maintain pricing power with consumers.
Corporate travel is starting to rebound to 2019 levels, with companies like Xenia Hotels & Resorts seeing upticks in business bookings from large corporations. This increase in corporate travel is primarily boosting hotel occupancy levels rather than rates. Additionally, tech giants are beginning to drive hotel bookings again in cities where they have major bases, helping to revive those markets.
Not all hotel companies are rushing to adopt major brands, as some believe that the fees associated with joining a major hotel group could eat into their profits. DiamondRock Hospitality, for example, wants to keep its independent hotels as they are rather than affiliating with big groups. As the industry evolves, hotel executives are considering factors like live music events, sports, and other forms of entertainment as key drivers of travel demand.
The importance of live music in driving travel demand is exemplified by Nashville, where music tourism has become a significant economic driver. Reed, the CEO of Ryman Hospitality Properties, points out factors like technology amplification, infrastructure investment, new venues, and celebrity influence as key factors contributing to Nashville’s rise as a tourism powerhouse.
The Skift Travel 200 (ST200) tracks the performance of hotels and short-term rental sector stocks, providing an overview of the financial performance of companies within the accommodations sector. The index consists of publicly traded companies across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, and alternative accommodations. As the hotel industry continues to navigate post-pandemic challenges, executives are focusing on labor patterns, inflation impact, corporate travel trends, and other key factors influencing the sector’s performance.
