How vacationers may benefit from resort business struggles
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Hotels and resorts, like the rest of the travel industry, took a hit during the pandemic, but potential travelers looking to book accommodation later this year may see a silver lining in the form of particularly low room rates and widespread availability.
According to the American Hotel & Lodging Association, which estimates half of all U.S. hotel rooms will be vacant in 2021, business travel, which typically accounts for 65% of hotel bookings, will decline 85% by April. and will not return to 2019 levels for another two to three years.
With so much inventory available, prices are sure to come down, said the association’s president and CEO Chip Rogers.
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“In general, prices follow occupancy,” he said. “If you’re looking to book a hotel, there is no better time because there is flexibility and prices are low.” While prices in some places, especially beach destinations, haven’t fallen at all since 2019, most are “at all-time lows,” added Rogers.
In Hawaii, the average daily room rate across the state in December was $ 291, down 17.6% from December 2019, according to the Hawaii Tourism Authority. Hotel occupancy fell to only 23.8%, which corresponds to a decrease of 56.4 percentage points compared to the previous year.
The Las Vegas Convention and Visitors Authority reported that the average daily rate for December for hotels on the Strip was $ 107.08, downtown $ 66.78, and the Vegas area was $ 100.90, an annual decrease of 21.4 %, 1.1% and 19.3% respectively. The total hotel occupancy for the month in the Las Vegas area was just 30.9%, compared to 85.1% in December 2019.
In the metropolis of Orlando, Florida, the occupancy rate in August was 28.7%, a 58.3% annual decrease, while the average daily rate for hotels was $ 83.25, a decrease of 22.2, according to Visit Orlando % compared to the previous year.
Only 56% of respondents said the hotel association plans to travel this year, compared to the 70% that OmniTrak (TNS) data typically sees in years leading up to the pandemic. Of those willing to travel, only 19% will stay in a hotel by April, while 24% expect to reserve a room for stays from May to August.
Travelers should strike while the iron is hot, Rogers advised, especially since the association noted an increased willingness among Americans to travel when Covid vaccination efforts began.
A recent forecast by the organization found that 48% of travelers say their willingness to travel is in some way related to vaccinations. The group found that only 11% of travelers are willing to stay in hotels because vaccines are widely available. Another 17% will book a hotel once they have been vaccinated, while 20% will wait for a large part of the US population to be vaccinated.
Similarly, financial services company IPX 1031 found that 58% of consumers plan to travel in 2021, while a ValuePenguin survey of 1,200 consumers found that 57% planned a vacation this year – and 16% booked immediately the hearing that new vaccines are available.
“When we start occupying again, prices will follow suit,” said Rogers. “You will go up again – no question about it.”