Tourism Economics’ Adam Sacks offers a preview of his general session at HSMAI’s upcoming ROC Americas event — including why he thinks ‘the industry remains strong.’
By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)
As COVID cases are rising again, many hoteliers find themselves wondering once more how this will impact the industry. Adam Sacks, president of Tourism Economics, says there is reason to remain positive — even though the situation is darkening right now, the medium-term outlook for the hospitality industry remains strong. “We see in sentiment data that people have concerns and plans are beginning to weaken for later this year,” Sacks said. “But the reality is that the industry remains strong. Recovery on the business travel and group side may be delayed again by a few months to 2022, but it will come back. While travel may soften in the current environment, it is likely to only be a temporary softening.”
For more than two decades, Sacks has worked with destinations, industry associations, and companies around the world in the areas of opportunity and risk assessments, policy analysis, and economic impact. He is an authority on measuring the economic impact of visitor activity and has analyzed the impacts of cruising, gaming, timeshares, hotels, new attractions, and destination marketing. He’ll put his expert perspective to use during “The Outlook: Recovery and Beyond,” a general session at HSMAI’s ROC Americas event for revenue optimization professionals in Dallas on Sept. 29, where he’ll share Tourism Economics’ latest views on the economy, the mindset of travelers, and expectations for how and when travel will fully recover.
SLOW AND STEADY
Sacks recently discussed his upcoming presentation in an interview with HSMAI. “It’s still incredibly difficult to predict anything right now, but I would say that things have gotten easier to look at over the past six months,” he said. “If you go back eight months, we didn’t have three vaccines that are incredibly effective at preventing death and hospitalizations, and we didn’t have nearly 70 percent of the population vaccinated. It’s not eradication, but it is an encouraging development, and it gives us hope.”
Sacks has been looking at data throughout the pandemic, and despite the recent uptick in cases, his outlook has remained steady over the past few months — and isn’t likely to change too drastically in the near future. “This summer actually outperformed our forecasts, so it is encouraging to see pent-up demand for leisure travel exceed our expectations, even by a little” Sacks said. “We expected a slow return to business and group travel for the rest of the year, and we are holding to that. Any revisions between now and the end of September could be a tempering of the outlook for the remainder of the year, but I don’t think our overall predictions for 2022 will change.”
While Sacks’ predictions for the medium term are optimistic, that’s not to say the industry won’t see any negative impacts in the final quarter of the year due to the rise in cases. According to Sacks, recent surveys have shown that customers are feeling more reluctant to travel right now, which may or may not lead to more cancellations. “There’s still a lot of wait-and-see right now,” Sacks said. “This latest rise in cases has weakened group bookings in the fourth quarter, but the good news is that we haven’t seen an appreciable weakening in the actual data. STR is still pacing over the past few weeks at a similar level to 2019, and air travel is holding at 80 percent of 2019. That gives us some indication of where customers are right now.”
Sacks cautioned against looking at negative customer sentiment right now as a long-term trend. “These surveys are coming at a moment in time when things are worsening,” he said, “but in another month, we could be on the other side of the curve and the sentiment could turn quickly again.”
THE OLD NORMAL
In 2022, Sacks expects to see even more pent-up demand for leisure travel because people have gone without for so long, something that he has held to since the onset of the pandemic. When group and business travel will come back full force remains unknown, but Sacks is certain that it will come back.
“Some people are predicting that business travel will never recover beyond 50 percent of pre-pandemic levels,” he said. “But we think that’s a misguided point of view. The need for business travel, the benefits for corporate performance, and the importance of meeting in person will prevail, just as they have in past crises, when people were saying the same.”
The number-one thing that Sacks wants ROC attendees to come away from his session with is that the medium-term outlook for travel remains very good. “The new normal will look a lot like the old normal,” Sacks said. “The actual crisis itself has come and gone in waves, but through those waves, travel demand has been resilient. Things have improved since the worst of the crisis last January, and we will continue to recover.”
ROC Americas is part of HSMAI’s Commercial Strategy Week in Dallas on Sept. 27–30, 2021. Learn more.