Hard-hit hotels are hopeful of a rebound as mass vaccinations begin to rollout in the U.S., but with many people still cautious about, or unable to travel, they’re having to come up with novel ideas to drum up new business.
One idea is the wedding industry. A survey published earlier this year by The Knot found that almost half of couples in the U.S. who planned to get married last year ended up postponing their wedding, or else only having a small ceremony and delaying the reception until a later date. Another third of couples who responded to the survey said they plan to stage a much larger reception, perhaps a first anniversary reception, within the next few months as the COVID-19 pandemic eases.
For hotels, weddings and wedding receptions can be a lucrative business. Not only are there lots of guest room bookings, but such events usually include the couple booking a ballroom or outdoor event space and also use the hotel’s catering service. In other words, there’s a lot of money to be made.
“It’s not just weddings that are a source of post-pandemic pent-up demand for events and travel that can spur a rebound in the hotel sector,” Calvin Schnure, senior economist at Nareit, a trade association representing real estate investment trusts and public real estate, wrote in Forbes. “Many other gatherings that were postponed during the pandemic may be rescheduled in the months ahead, from family get-togethers and college reunions to visits with the grandchildren.”
Hotels need to make up for lost time. During the second quarter of 2020, total spending on traveler accommodations fell by 71%, according to data from the U.S. Census Bureau. Now, with states slowly reopening, hotels have clawed back some business. But overall, hotel bookings in the fourth quarter of 2020 were still down 44% from the year before.
With most analysts saying that business travel will take time to recover due to the rise of online meetings over Zoom and other platforms, hotels are looking at leisure travel and events such as weddings to spearhead a recovery. Some have promoted the idea of “vaxications”, or celebratory trips once people have received their vaccinations and are able to travel safely, for example. The idea appears to have caught on, with some travel agencies reporting a big increase in inquiries since vaccination campaigns began.
There have been some signs of a recovery already. Since the rollout of vaccines began, lodging and resort REITs have shown strong growth. Total returns from November 2020 to March 2021, including capital gains and dividends, jumped by 81.4% Schnure said in his article in Forbes.
“Lodging/resort REITs have fully recovered their losses from the early months of the pandemic, and the improvements in the fundamentals for leisure and business travel are encouraging for future gains as the economy—and the wedding business—gets back to normal,” he said.