By Christopher Durso, Vice President of Content Development, Hospitality Sales & Marketing Association International (HSMAI)
When HSMAI’s postponed and rescheduled Fall Curate 2019 program is held on Oct. 14–15 at The Breakers in Palm Beach, it will be within striking distance of 2020 — the year that a growing number of observers seem to think the economy will enter into a recession. What might that look like for the travel and hospitality industry? How can today’s hospitality sales, marketing, and revenue optimization professionals, many of whom have yet to experience a slowdown let alone a downturn, prepare themselves? Is it better to focus on recovery or resilience?
These are some of the questions that Katie Briscoe, president of MMGY Global, and a panel of industry veterans — IHG’s Isaac Collazo, KSL Resorts’ Jeff Senior, and MMGY’s Peter Yesawich — will explore during a session at Curate. After presenting a comprehensive outlook for travel and hospitality, Briscoe will lead Collazo, Senior, and Yesawich through a discussion about what they’ve learned about navigating an economic downturn. We recently spoke with Briscoe about what to expect from the session.
How do you go about preparing an economic outlook for this industry?
We have the benefit of having access to travel-specific insights through our work for Portrait of American Travelers and our travelhorizons study, which is done quarterly. Our Portrait is a look back and our travelhorizons is a look forward, and then we’re sort of bookended in how we’re approaching this outlook. We take a broad look at travel to help shape our opinion, but then you also have to really understand the pulse of the global economy as well to start to gauge potential impact.
What is the relationship of the travel and hospitality sector to the greater economy?
It’s a multitrillion-dollar industry — actually, the latest numbers that I’ve seen are $8.8 trillion. But then there’s so much depth to the industry when you’re talking about hoteliers versus destination marketing organizations versus transportation. There’s so much diversity, and the impact of a recession will be different across industry segments. Whether you’re talking about economy, mid-scale, or luxury, there are different implications and there’s just so much complexity as to who and how it would impact, and how businesses are thinking about it.
Does this mean you’ll be using the R word in your presentation at Curate?
Yes. We’ve referenced a lot of data that’s not our own to back that up. The Wall Street Journal earlier this year published a survey of economists, asking them what are the odds of a recession within the next 12 months. And 49 percent of those economists polled expect a recession in the next 12 months. So then you think, okay, less than half think it’s coming. Well, of the remaining 51 percent, half of that group expect one in the next 24 months.
You have economists thinking more broadly, not just through the lens of travel, saying that a recession is absolutely coming. Then we’re also starting to see some softness this year in travel. Leisure is starting to slow down, and while we are showing commercial strength, we expect that that’s going to be followed by some weakness. Our international inbound — we’re losing market share to other parts of the world, so that’s something that obviously is a big point of discussion as well.
And it’s not so much, is a recession going to happen, but what effect is it going to have on the industry?
Right. A lot of the questions that we’ve been asking are about the perspective of people in a position of power in the industry — that’s marketers, that’s revenue managers, that’s owners — to make decisions during challenging times. How are they thinking about this? Are they thinking about recession recovery, or are they thinking about resilience? You’re going to see some brands in an economic downturn that take advantage of the fact that they could capture more market share. How are people putting plans in place to either endure a downturn or capitalize on what’s coming?
How does the economic outlook then cue up your panel of experts?
I think that the most impressive thing about what Peter, Isaac, and Jeff bring to the table is that they have been through these economic cycles previously. We’re now absolutely in a position where many of the decision makers I referenced before have not seen an economic downturn like this. In terms of how to handle this from a business standpoint, it’s pretty unknown. The value of Jeff, Peter, and Isaac is that they can provide some great insight into how to remain resilient and then also quickly recover from a cycle.
And, of course, they’re coming from different but complementary perspectives. You think about Isaac from a real global perspective, along with Jeff, who can really comment on the owner’s POV and also the luxury segment. Some believe that luxury is going to be especially insulated from a downturn, but others don’t believe that’s the case at all. And then you have Peter, one of the most well-known researchers in North America on travel and the travel economy. Their ability to comment on these economic cycles is going to serve an educational purpose for our audience and create a lot of interesting dialogue for people who don’t necessarily agree on what this looks like. Which is okay — that’s the point of the session.