CEOs of some of the world's largest hospitality companies touted during New York University’s annual International Hospitality Industry Investment Conference on Monday what they called growing business travel demand.
"Last year, leisure was off the charts," Hyatt Hotels Corp. president and CEO Mark Hoplamazian. "We're still growing in leisure, but this year the big change is in business travel. New York City is up 20 percent year to date in business transient. That's staggering."
Hoplamazian's comments recalled his remarks during Hyatt's first-quarter earnings call last month, when he called this year's business travel demand "extraordinarily encouraging." Demand remains strong, he said Monday.
"Yes, there have been some shifts. Small and medium-sized enterprises led the way; that was the 2021-22 phenomenon," Hoplamazian said. "Our corporate accounts through April are up 12 percent year to date, and total business travel is up 6 percent year over year."
Hoplamazian took a shot at Microsoft co-founder Bill Gates, who in 2020 amid the Covid-19 pandemic famously predicted a permanent 50 percent reduction in business travel. "He was dead wrong," Hoplamazian said. "Business travel is back, and it is on a steady rise. We haven't seen one month that goes by where we don't see positive [growth] year over year."
Accor chairman and CEO Sébastien Bazin, echoing his comments from February when he acknowledged his own prediction, said, "Bill Gates might have been wrong. I was wrong on this panel three years ago. I really thought that international business travelers would go away, for 25 percent of it, forever. You know what, I think it's still true. Because what they don't see is that business travel is back, but it's a different business travel mix.
"The guys going from Seattle to New York or Seattle to London, I guarantee you half of those individual businessmen are reducing his business travel by half because he's going on Zoom or Teams," Bazin continued. "But it's been replaced by so many small enterprises, where they [meet] so often because they don't see each other because of flexible working … These groups meet every two months, two hours from where they live, so they can be back together. We call that business travel; this is not international business travel, it's a different form. And that has more stickiness and is more loyal."
Accor's 2024 negotiated rates for its large corporate accounts averaged a 5 percent to 8 percent year-over-year increase, Bazin added.
Meanwhile, the post-pandemic hotel staffing shortage appears to be abating, at least at the largest hotel companies. Each CEO on the panel, which also included Marriott International's Anthony Capuano, IHG Hotels & Resorts' Elie Maalouf and Hilton Worldwide's Christopher Nassetta, agreed that staffing has at least returned, and in some cases have exceeded, pre-pandemic levels.