In this video clip from "Real Talk" on Motley Fool Live, recorded on Feb. 25, Calvin Schnure, Senior Vice President of Research and Economic Analysis for the National Association of Real Estate Investment Trusts, shares his take on the travel sector, which segments are seeing faster recovery, and how long he thinks it will take to get back to full strength.
Calvin Schnure: Travel and everything associated with travel is another one of these sectors that is really lagging quite a bit during the pandemic, and it's important to separate it between personal leisure travel and business travel. Because they both shut down very early in the pandemic. We couldn't travel, we couldn't go anywhere. But one of the first things that opened up was people said, "I haven't seen family, I haven't seen friends, I haven't seen grandchildren," that's one that everyone mentioned was grandchildren. I happen to think that anyone you want to visit is worth visiting.
We've seen a good recovery and operating performance in the hospitality sector, but it still has quite a ways to go. But what's really interesting is look at the days of the week. Typically, the occupancy rate on Saturday night is not that different from the occupancy rate on Wednesday night, but there are different groups of people. The office rates on Saturday night came back pretty well. Those are largely leisure, personal travel, and those are the things that have come back quickly because visiting the grandchildren by Zoom just ain't the same thing. The Wednesday meetings, the Wednesday nights, the midweek, that is largely business travel and that really has not recovered as much. We have not seen business conventions, trade shows, conferences come back as much, but I'm seeing more and more of them online. I've attended a number of them. I've spoken at a number of conferences in-person over the past five months. I think other people are seeing that as well. There is a lot more ground to recover in the business travel. Impact on the hospitality sector. What's the timeline for that? It's hard to tell. I suspect it's going to come back comparable to what I mentioned for office. Second half of this year, I think you'll see more conferences, more business travel, you're going to see more people getting on the road. Probably stronger recovery in 2023, it's a little bit early to have a full robust recovery in the travel market.
