Business travel is back to about 50% of pre-Covid levels
Hilton CEO Christopher Nassetta told CNBC on Wednesday there are reasons to be optimistic about the recovery of corporate travel following a prolonged coronavirus-related slowdown.
“This is as good as I’ve felt since the pandemic started in terms of where we are and what I see in forward-looking trends and bookings in the business,” Nassetta said in an interview on “Closing Bell.”
Leisure travel has been propelling the industry’s recovery so far, and Nassetta said he expects to see record numbers in that category this summer. However, a return of business travelers is crucial for a complete rebound in the hospitality sector.
“Business travel, while it’s lagging, it’s coming back. It’s probably about half the levels that we saw at the prior peak,” Nassetta said. “Group and events are lagging that, but they’re coming back.”
One particular reason to be hopeful, Nassetta said, is that the hotel operator is experiencing stronger corporate bookings in markets where the pandemic situation has improved.
“As businesses are starting to reopen offices and an expectation of in the fall kids going back to school, people start to travel for business again, and they start to congregate in meetings,” he said. “In fact, if you look at markets even in the U.S. and certainly China … where they’re further along, we already see business travel back to effectively 75% of volume levels that we saw in [2019].”
Many companies plan to adopt more flexible work arrangements post-pandemic. Given that change, there have been questions about how traveling for meetings and conferences fits into that hybrid-work equation. Some have suggested business travel will never fully recover.
On Tuesday, Jamie Dimon expressed dissatisfaction with remote work and videoconference meetings during an event for The Wall Street Journal CEO Council. The JPMorgan Chase chairman and CEO said he was “about to cancel” all his Zoom meetings.
“We want people back to work, and my view is that sometime in September, October it will look just like it did before,” Dimon said. He also said JPMorgan has lost business to competitors in some instances during the pandemic when rival bankers traveled for in-person meetings.
Companies that suffered financially during the pandemic will have to build up their travel budgets over time, Nassetta said. But in general, he said, he feels there is a broad desire to cut back on virtual meetings and conferences.
“The anecdotal evidence, as I talk to our big customers and as I talk to friends who run businesses and the like, is that there’s a huge amount of pent-up demand to get out and travel for business and to get out for group meetings and events, just because it’s been so long since they’ve done it,” he said.
Shares of Hilton fell more than 4% Wednesday after the company reported worse-than-expected quarterly earnings. The company’s stock is up about 10% year to date.
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