Hotel exec on ‘incredible demand’ for travel despite soaring inflation
Omni Hotels & Resorts President reveals current travel trends
Omni Hotels & Resorts President Peter Strebel weighs in on travel trends amid the current economic landscape.
There is "incredible demand" for travel despite soaring inflation, according to Omni Hotels & Resorts President Peter Strebel.
The hotel executive also acknowledged on "Mornings with Maria" that prices for accommodations are "a little on the high side" caused by supply and demand as well as the inflationary environment.
Inflation hit a fresh 40-year high in February with the consumer price index climbing 7.9% on an annual basis, according to data released last month by the Bureau of Labor Statistics. Month over month, inflation rose 0.8%.
From January to February, nearly every category of goods and services got pricier. Gas jumped 6.6% and accounted for almost a third of price hikes. Grocery costs jumped 1.4%, the sharpest one-month increase since 1990, other than during a pandemic-induced price surge two years ago.
According to data provided by the Bureau of Labor Statistics, prices for airfare shot up by 12.7% in February compared to the same time the year before.
Inflation data for March will be released next week.
Strebel stressed that despite soaring inflation, demand for hotels is strong.
"So we are selling out and obviously when you sell out, you can increase prices," he said.
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He also noted that the hotel industry is experiencing "a big, big load of inflation."
"It costs much more money now to employ people," he told host Maria Bartiromo, noting that wages for his employees shot up over 20%.
Strebel also pointed out that input costs are a lot higher, including food items like chicken, eggs and beef.
"We’ve got supply chain issues from stuff coming overseas so it’s been tough," he continued, adding that "the business is a strong business" because people love to travel and don’t want to give it up.
People are seen at the Miami International Airport in Florida. (Photo by CHANDAN KHANNA / AFP) (Photo by CHANDAN KHANNA/AFP via Getty Images) ((Photo by CHANDAN KHANNA/AFP via Getty Images))
According to an American Express travel report released late last month, people are planning to take more trips in 2022 compared to the year before.
The American Express Travel: 2022 Global Travel Trends Report also revealed that the vast majority, 86%, of respondents are planning to spend more or the same on travel in 2022 compared to a typical pre-pandemic year, a news release noted.
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The report, based on data from the United States, Australia, Canada, Mexico, Japan, India and the United Kingdom, revealed that in the fourth quarter of 2021, global card member bookings made through American Express Travel, increased 24% compared to 2019 and have continued to strengthen in 2022, the release also pointed.
Strebel said on Tuesday "every day" his hotels set a new record for occupancy.
"COVID moves fast when it comes, the business slows down, but when it goes away the business speeds up real quick," he said.
Omni Hotels & Resorts President Peter Strebel acknowledges prices for accommodations are 'a little on the high side' caused by supply and demand and an inflationary environment.
"The pace of our bookings has never been stronger," Strebel added, noting that his hotels are 25% higher in reservations for May, June and July compared to 2019, "which was a very strong travel season."
"We are about 60% above where we were this time last year so Americans are back on the road, Americans are back traveling and they’re going to all the great destinations across the United States," he continued.
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Strebel revealed that the most popular destinations include those with beaches, noting that Hilton Head Island in South Carolina has been in demand.
He also noted that city destinations, including New York City, "have come back really fast."
Strebel pointed out that according to his booking data, there is a "bounce back" in business travel in the cities including San Francisco, Chicago and Austin.
He noted that pre-COVID his hotels "would basically sell out every, Tuesday, Wednesday [and] Thursday with business travel" and now occupancy is reaching about 60 to 70%.