Travel industry recovering but not completely yet, executives tell Hoover chamber

Travel industry recovering but not completely yet, executives tell Hoover chamber

The travel and tourism industry is making a comeback after taking a devastating hit in 2020, but it could be late 2023 or 2024 before it reaches full recovery, one industry expert told the Hoover Area Chamber of Commerce today.

Jefferson County had five record years of tourism in a row from 2015 to 2019 and was slated to have another record year in 2020 until America started to shut down in March 2020, said John Oros, president and CEO of the Greater Birmingham Convention and Visitors Bureau.

The expectation was to have about 450,000 room nights booked in Jefferson County in 2020, but when COVID-19 shutdowns began, the industry lost 200,000 room nights within a week, Oros told a chamber crowd at a luncheon at the Hoover Country Club.

Jefferson County hotels went from about 69% occupancy rates to about 25% in April or May of last year, he said.

Visitor spending in Jefferson County fell from about $2.4 billion in 2019 to $1.5 million in 2020, and the number of people employed in the travel and tourism industry in the county feel from about 33,000 to about 20,000, Oros said.

“Our industry was devastated, was gutted,” he said. “The good news is we’re on our way back, but we’re not quite there yet.”

Occupancy rates in Jefferson County for June of this year had climbed back to 67%, mostly due to leisure travel, including youth and collegiate sports, Oros said.

“If there is one segment that is recession proof, pandemic proof, it’s youth sports,” he said.

The Hoover Metropolitan Complex has been a great amenity to attract a lot of that sports travel, Oros said. The city of Hoover had great foresight to build that complex, he said.

Paul Dangel, the sales and marketing director for the Hyatt Regency Birmingham — The Wynfrey Hotel and chairman of the board of trustees for the Hoover Area Chamber of Commerce, said without the Hoover Met Complex, the hotel industry in Hoover would have suffered much more. The city is fortunate that no hotels in Hoover have had to close down completely, he said.

While leisure travel has made a recovery, business travel is still very sluggish, Oros, Dangel and other travel executives told the chamber.

Individual business travel currently is at about 43% of 2019 levels but is expected to climb back up to 79% in 2022, 95% in 2023 and be at full recovery by 2024, Oros said.

Corporate business travel currently is at 31% of 2019 levels and is expected to climb to 61% in 2022, 70% in 2023 and be at full recovery in 2024, he said.

“We’re looking forward to things turning, and things are turning around,” Oros said.

The pandemic greatly impacted hotel staffing, first leading to layoffs and then having trouble getting people to fill vacancies when business picked back up. It has been tough to get housekeepers and front desk associates, Dangel said. His hotel had to limit the number of rooms it could sell on a given night, and sales managers have been helping clean rooms, check in guests and cook food, he said.

“It’s meant some long days and some long hours, but we’re certainly getting through it,” Dangel said.

Jason DeLuca, general manager of the Hilton Garden Inn and Home2Suites in downtown Birmingham, said Hilton has made the decision to offer housekeeping services only when requested.

More guests have indicated a desire not to have anyone come in their rooms during their stays, he said.

Another big change has been in the area of food and beverage service, Dangel said. He believes the days of self-serve buffet meals and drink stations at hotels are gone, he said. Given health concerns, it’s no longer deemed prudent to have each guest handling the serving utensils, he said.


AIRLINES

The airline industry was hit similarly hard, said Jonathan DiCesare, the principal of strategic accounts for American Airlines.

“We were losing $70 million a day for at least a year,” DiCesare said. They finally got it down to $20 million a day, and “we didn’t make a dollar until June of this year.”

Airlines typically get a lot of business travelers, but now more than 80% of the travel is for leisure because international travel is greatly restricted with countries opening and closing and businesses still not putting people back into travel mode, Dicesare said.

American Airlines is having to adjust to accommodate the leisure travelers, adding hundreds of routes to places it normally wouldn’t fly, he said. American added Saturday service from Birmingham to Orlando due to an uptick in travel to Disney World, he said.

“It’s kind of crazy to see the ebbs and flows, but we really just have to be nimble and be able to fly where people want to go,” Dicesare said. “We really can’t dictate when businesses open back up.”

However, the current forecast is for a full recovery of domestic business travel in 2022, he said.

Airline bookings are going up as more people get vaccinated, but the new Delta variant of the COVID-19 disease is ramping up, and it’s unknown what impact that might have on business going forward, he said.

“Nobody knows what’s going to happen, but we really need some of these international markets to open back up to get a lot of that business traffic back,” he said.

American Airlines in October cut more than 40,000 jobs, including 19,000 through furloughs and layoffs. But the airline now has all of its pilots back as of about two weeks ago and is accepting applications for new pilots, Dicesare said.

“Our plan is growth still,” he said. “It was a really weird year. It was nothing we ever faced before. [But] if you’ve been through an airport lately, it is absolutely crazy, and our planes are full.”





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