Collectively the U.S. hotel industry can’t have a new normal without a vaccine at this point.
There are a LOT of hopes and dreams pinned to a COVID-19 vaccine, and the hotel industry is no exception.
During the first few months of the pandemic, hoteliers talked about getting the virus under control enough to spur travel, finding a “new normal” of living with the virus and rebuilding business after that.
We saw China do it; we started to track closely China’s recovery in hopes the U.S. and Europe could follow that tract. Leisure travel bumps in the summer helped.
But that line of thinking—that we could build back a semblance of normal business pre-vaccine—is completely out the window here in the U.S., and I’d say in the U.K. too, most likely.
Speakers at every conference I attend these days talk now about a vaccine as the silver bullet or cure-all, as it were. And it is, in a way. But it’s interesting to note the shift in thinking over just about six months.
Economist Bernard Baumohl talked about it this week, in a session he recorded for The Lodging Conference’s online event.
“We have to be very careful about having a false sense of security,” he said, referring to some positive economic reports about housing and retail sales. “The reason is that an economic rebound is not the same thing as an economic recovery. It doesn’t tell us we’re on a sustainable economic recovery course right now because, again, it is the virus that is still calling the shots and will until there is a vaccine.”
That vaccine in many ways will represent a green light to the economic markets, or an auspicious sign that says, “Business Isn’t Back But Conditions Show It Can Be Soon!”
In other words, in this year of uncertainty, a vaccine represents some tangible, certain light at the end of the tunnel.
Mind you, it didn’t have to be this way. China mobilized and found a new normal sans vaccine. I don’t need to spend a lot of time speculating about why the U.S. and Europe can’t do that, but let’s just say it’s something to note.
However, it’s been interesting to hear different stakeholders in the hotel industry talk about what this future vaccine will mean. To investors, it may signal a release of the flood of capital on the sidelines waiting to snap up distressed assets. To operators, it may signal the start of a road back to consumer confidence, “normal” travel and the ability to hire back staff, particularly in catering and housekeeping.
All in all, I think the vaccine will start the next phase of whatever recovery we’re in. Many hoteliers talked about phase one as those first few months of panic, dealing with paperwork and furloughs and making decisions. Phase two likely was this summer, when many hotels could scrabble for and enjoy a potentially nice bump in leisure travel.
That means we may be in phase three now, which is sort of that shoulder period after the summer bump and before the vaccine. This period may be the most uncertain one of all.
Of course, vaccine availability, distribution and efficacy won’t happen overnight. But it’s something, right?
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