Apr 10

Apr 10 Thursday Thoughts: Research to Inform Your Planning

Planning for the future requires information, and our goal is to monitor industry data to assist our partners in understanding short and long term COVID-19 impacts and opportunities.

No sign of a “flatter curve” yet, and physical distancing orders continue. There is a plethora of information and prognostication published and broadcast daily from hospitality and travel industry practitioners. Some thoughts from a selection of this week’s publications, with the “bad news” first:

The Bad News…Travel Spending Continuing to Decline: The U.S. will hit what is normally the peak of travel season within the next three months. Over this period, public health officials also hope to see the peak and eventual decline of the COVID-19 related mortality rate. The U.S. travel industry has a lot of ground to make up, as travel spending dropped from a relatively steady average of about $20 billion per week in February to a low of $3.8 billion at the end of March, a decline of 80 percent. The pace of the decline appears to be slowing, but we can’t know how long we will remain at this bottom until we begin to understand options for testing for and treatment of COVID-19. A soft summer on public lands should be part of your planning considerations (e.g., when will summer actually begin).
The Good News…Beginnings of a Recovery? The stock market, including hotel stocks, have historically been a barometer for the condition of the overall U.S. economy, and the travel and recreation industry typically directly mirrors U.S. economic health. In the last 7 days, the market has shown signs of a rebound as it reacts to the almost daily introductions of federal aid packages designed to prop up the economy. After its March 23rd close at a low of 18,591, the Dow Jones Industrial Average (DJIA) market has fluctuated a bit but has regained enough to close nearly 4,800 points higher by April 8. In contrast, the Baird Hotel Stock Index (BHSI) demonstrates deeper losses and less dramatic recovery, with the hotel industry hitting lows and slight recoveries a few days before the DJIA marks its changes. Keeping an eye on the health of the hotel stock index could potentially give us a window to when true recovery has a foothold, will continue, and when the traveling public will have the confidence to spend its discretionary dollars.
Using Data to Make Decisions: Good research and data can inform your agency’s planning. This article focuses on how to think about revenue forecasting by recognizing different possible situations (e.g., shapes of curve), introducing variables and identifying constraints.