It’s an understatement to say 2020 has been unlike any other year in the hotel industry. Revenue per available room declines and occupancy levels at the peak of the Covid-19 pandemic in late March and April were at or near their lowest ever, according to STR. In-person meetings currently are nearly nonexistent, save for a few local small gatherings. And many hotels had to close or curtail their operations.
While most of those properties have reopened, some have not yet brought back their full staffs, and the American Hotel & Lodging Association has warned that more than two-thirds of surveyed owners report that they will be able to last only six more months at current projected revenue and occupancy levels. The organization relentlessly has lobbied the U.S. government for additional aid.
With travel budgets being cut, some corporate travel buyers are shifting from higher-priced tiers to more affordable ones. And the extended-stay tier has seen the least erosion of its occupancy. In this environment, brands that buyers know and can depend on are more important than ever.
The 2020 BTN Hotel Brand Survey once again asked corporate travel buyers to rate their top hotel brands across seven tiers of properties. However, it also acknowledged the effects of Covid-19 by asking them to rate three attributes based on their experiences during the pandemic along with 11 pre-pandemic attributes for each hotel brand they named. The top brands for the tiers overall weren’t necessarily those that scored the best on the pandemic response criteria. Further, fewer brands qualified this year than last, with two tiers—upper-upscale and midscale—including just three brands in each that made the cut.
Among multibrand hotel companies, Marriott International had six brands place in the top three spots of their respective segments, including repeat top honors for the upper-upscale Marriott brand, the only brand to retain its No. 1 spot among all seven tiers. Hilton Worldwide had four brands place in the top three, with Hampton by Hilton taking top honors for upper-midscale. Hyatt Hotels Corp. followed with three, but two were No. 1 for their tiers—Hyatt Place for upscale and Hyatt House for upscale extended stay. InterContinental Hotels Group and Best Western each had two, with the latter taking top honors for the midscale tier.
It wasn’t surprising to note that those brands that scored highest for having clean, attractive and well-maintained hotels and facilities pre-pandemic and those with high responsiveness to safety, security and sanitation concerns during the pandemic tended to take top honors in their segments. Other criteria rated highly this year included the quality of on-property service staff and the ability to maintain critical operations at key locations for business needs.
"Some brands, like Hilton for example, were early on communicating messages about health and sanitation [in regard] to Covid-19, and it got kind of a boost from that," said industry analyst and adjunct professor at the New York University School of Professional Studies Jonathan M. Tisch Center of Hospitality Bjorn Hanson. "I don’t know if that was because leisure travelers were sensitive to it, or corporate travel managers were saying, ‘I’m probably safer sending travelers to brands communicating and focusing more on health and sanitation.’ "
With more travelers concerned about health and safety, several hotel companies also have accelerated their technology plans to offer contactless services, mainly through their mobile apps, for such transactions as check-in, checkout, virtual payment, room keys, room-service orders and other service requests.
Hanson warned, however, that there still are travelers who want the personal touch. "The conundrum is how to make both available for people who want that [at-desk] check-in and checkout and those who want automation so they [don’t feel like they are] forced to [choose] one," he said. Additionally, he said, it’s important that guests who want in-person service not feel awkward in doing so. For instance, a guest who wants to check out at the front desk might feel like they are inconveniencing staff if someone needs to be called to take care of them, he explained.
While many in the industry believe the worst is behind us, a full recovery is a long way off. STR and Tourism Economics predict that U.S. hotel demand won’t recover until 2023, with occupancy, average daily rate and revenue per available room reaching at or near 2019 levels in 2024. CBRE also anticipates that the key performance indicators for the U.S. lodging industry won’t meet or surpass 2019 levels until 2024.
Methodology: BTN emailed readers responsible for corporate hotel buying decisions, and 426 participated July 24-Sept. 11 in an online survey to rate hotels with which they have conducted business in the past year. Buyers rated each brand on 11 pre-pandemic attributes and three pandemic-related attributes on an ascending scale from one to six. BTN reported results only for tiers and brands with significant respondent usage. The survey bases hotel-tier divisions on price-point data provided by STR. STR periodically moves brands to different tiers. Brands in this survey are placed in their respective tiers based on STR's summer 2019 chain scale segments, as respondents' answered survey questions based on summer 2019 to summer 2020 usage.