Consumer sentiment shows a long recovery for the industry
It took a little less than two months into the pandemic for top hospitality brands including Hilton and Marriott to try and reassure travelers that their rooms were squeaky clean, even amid the health crisis. In April, Marriott announced a council featuring prominent doctors to elevate its own cleanliness standards. A week later, Hilton announced a partnership with Lysol.
Almost four months later, it seems these measures aren’t working yet. According to a survey of 1,000 travelers conducted by the market research firm Magid, in April 42% said they didn’t trust hotel brands to ensure health and safety standards. By June, that figure had only fallen by 1%.
“None of this is working,” said Rick Garlick, vice president and strategy consultant at Magid. “People still believe that travel locations, buildings [and] facilities are petri dishes to spread Covid-19. People don’t trust hotels, cruise lines, airlines to enforce the very guidelines they say they’re going to implement.
”The hotel industry’s trade group, the American Hotel and Lodging Association (AHLA), released its own standards to unify practices across properties in May, though many brands across the travel ecosystem had overhauled their cleaning protocols beginning in March.
Specifically for the hotel industry, there isn’t a ton of optimism.
On Tuesday, more than 4,000 hospitality leaders sent a letter to Congress, urging additional relief for commercial real estate loans to alleviate hotel owners’ fears of foreclosures.
“With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently,” said Chip Rogers, president and CEO of the AHLA. “Tens of thousands of hotel employees will lose their jobs and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate. We urge the immediate passage of this legislation so America’s tourism industry can survive and recover when the public health crisis subsides.”
In another survey of consumer sentiment, Magid found that travelers’ willingness to take a trip in the next 12 months dropped 29% between April and August—whether or not a vaccine existed. That loss could result in a loss of $75 billion for the industry.
While consumer sentiment isn’t a perfect barometer for the future—especially when cases jump and fall week by week—a decline of 29% is still substantial. When given more time, whether they’d stay in a hotel within two years, 89% of consumers in April said they would. By August, that figure fell to 70%.
The losses at the top of the industry have been substantial: Marriott and Hilton lost a combined $664 million in Q2, and executives with both companies predict the industry’s recovery to be a “grind.”
Until then, they might need to find a new way to regain consumer trust.
“They’ve got to get the word out about everything they’re doing,” Garlick said. “The trust isn’t there.”