Hyatt CEO says demand for travel is ‘alive and well’
After closing 35% of its global properties in April 2020, Hyatt Hotels Corp. CEO and President Mark Hoplamazian said he is happy to see operations at the hotel giant returning to normal.
As of March 31, 96% of the Chicago-based hospitality company’s more than 1,000 properties were back up and running, and occupancy rates – as well as room rates – are closing in on 2019 levels at many locations.
“I cannot tell you how happy I am to see the demand come back,” Hoplamazian said. “The much talked about pent-up demand for travel is alive and well.”
A pedestrian walks outside the Grand Hyatt hotel in central Melbourne, Australia, Thursday, Feb. 4, 2021. All competition at six Australian Open tuneup events scheduled for Thursday was called off after a worker at one of the tournaments' Melbourne quarantine hotels tested positive for COVID-19. (AP Photo/Hamish Blair) (Photo: The Associated Press)
Business picking up at Hyatt Hotels
Hyatt has seen travel rebounding since the end of January, but Hoplamazian said things started to really pick up on May 13, when the Centers for Disease Control and Prevention updated their masking guidelines to say fully-vaccinated Americans no longer need to wear masks indoors in most situations.
It was an “inflection point,” Hoplamazian said. “We saw a pretty significant increase in bookings into the summer right after that announcement.”
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Most Hyatt hotels are back at 2019 demand levels during summer holidays, which include the Fourth of July weekend and Labor Day, and almost all of its resorts have surpassed 2019 demand levels those days.
On the Saturday of Memorial Day weekend – considered the kickoff to summer travel season – almost 200 Hyatt properties were fully booked. Analytics company STR said in a Friday report that occupancies across the greater U.S. hotel industry the first two days of Memorial Day weekend topped 78.3%, the highest weekend occupancy since October 2019.
“We’re seeing a lot of people turning to family trips and a lot of opportunities to finally get out of town and take a vacation,” Hoplamazian said.
Hyatt Hotels Corp. President and CEO Mark Hoplamazian. (Credit: Hyatt Hotels Corp.) (Photo: Hyatt Hotels Corp.)
Permanent, pandemic-induced changes
While certain numbers are nearing their pre-pandemic status quo, not everything will be as it was before.
Hyatt properties introduced new technologies like QR-based menus and mobile ordering to minimize person-to-person contact over the course of the pandemic. Many of those technologies will outlast the public health crisis, Hoplamazian said.
“When the whole industry hit a crisis of great severity, that created a need to innovate and to really experiment with different ideas and different offerings,” he said. “You’ll see that continue to happen because people are still evolving in terms of what they’re comfortable with and what they require in the beginning of this recovery.”
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New offerings like outdoor programs are also sticking around, along with the Work from Hyatt package, in which more than 120 hotels offer extended stay packages that come with a separate, dedicated workspace. The package has been popular with families, which account for 60% of the program’s summer bookings, according to Hyatt.
The company has also noticed an uptick in the number of days people are booking, with the average stay time jumping from two days in 2019 to three in 2021.
Hoplamazian credited the pent-up demand families and leisure travelers are experiencing after months of lockdowns and COVID-19 restrictions.
“People are really trying to take advantage of having a real break,” he said.
Low room rates will be harder to find
Travelers have been able to scoop up hotel rooms at low prices over the past year, but those days are limited.
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Between January and March, the average daily room rate for full-service Hyatt hotels in the Americas was 22% lower than the same period in 2020, according to filings with the U.S. Securities and Exchange Commission. The prior quarter, it was down 25% year-over-year.
Hoplamazian said rates aren’t back at 2019 levels yet, but they are expected to increase throughout the summer travel months.
“We’re still getting back to where we were pre-pandemic, and I would say it’s going to continue to firm up over the course of the summer,” he said
Fall pricing will depend on how quickly business travel returns. Hoplamazian doesn’t think overall rates for the industry will be back at 2019 levels until at least next year, once there’s more international and business travelers.
He added that some things are still up in the air, with the world not fully past the COVID-19 pandemic.
A giant heart created by windows lit by the building’s engineering team is illuminated in the Hyatt Regency hotel as a way to lift the spirits of the community in the midst of the coronavirus outbreak Thursday in Seattle. (Photo: Elaine Thompson/AP)
“We should always bear in mind the evolution and the variation of the virus is going to be with us, and we need to be vigilant,” he said. “There’s a great deal of optimism and great enthusiasm and a good feeling, which is wonderful. It’s also true that we can’t behave as though we don’t have any risks remaining. I would say public health is the number-one issue.”
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