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Return to travel will be ‘regional and sporadic,’ Choice Hotels CEO says
The return of travel within the United States will be “sporadic” and will not bounce back in the same way in every region, Choice Hotels CEO Patrick Pacious said Monday. “I think what we are going to see is a return to travel that will be regional and sporadic,” Pacious said on “The Exchange.” “It’s what…
The return of travel within the United States will be “sporadic” and will not bounce back in the same way in every region, Choice Hotels CEO Patrick Pacious said Monday.
“I think what we are going to see is a return to travel that will be regional and sporadic,” Pacious said on “The Exchange.” “It's what we're seeing today. The Southeast part of the country, where a lot of our hotels are located, did rebound sooner.”
Pacious said that 97% of the company's U.S. hotels have continued to operate during the pandemic, even as travel has fallen precipitously as people shelter in their homes. Airlines have slashed their flight schedules and major tourist attractions, such as theme parks, have closed due to the pandemic.
However, the number of customers has increased during recent weekends and it appears family and vacation travel will bounce back before business travel, Pacious said.
“Two-thirds of our business is leisure travel in normal times. So we do expect leisure travel to return before business or group travel, and we think that will benefit our owners as well,” Pacious said.
Choice Hotels — which includes Clarion, Comfort Inn and Quality Inn hotels, among others — has made several cutbacks to preserve cash during the pandemic. The company has suspended its stock buyback and dividends plans, cut executive pay and implemented a hiring freeze, among other measures. The stock is down roughly 30% this year.
About 70% of the company's hotels have participated in either the Paycheck Protection Program or the disaster loan program through the Small Business Administration, Pacious said. Public companies, including restaurant and hotel companies, have been criticized for taking money through the PPP, and the Treasury Department issued guidance discouraging large publicly traded companies from using the program after much of the money had already been approved.
However, Pacious defended hotel chains getting the money, saying they were providing essential services.
“We are part of the critical infrastructure,” Pacious said, pointing to housing National Guard members and victims of tornadoes as reasons why hotels need to stay open.
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