Impact to Hospitality and Travel Industry
At the onset of Covid-19, the outlook for both the hospitality and travel end markets were initially negative; however, recent data and consumer/business behavior suggest increased potential for facility retrofits and Tier 2 city construction activity. North America is leading in domestic travel and seat capacity expansion leading to:
- High performing facilities investing in safe occupancy measures, redesign of space, and updates to improve experience and attract new customers
- Individuals are beginning to move outside of urban areas to more rural locations, leading to development for new hospitality options (e.g., restaurants, strip malls, hotels)
- The CARES Act created support for consumer spending, including vacation and holiday planning, which is likely driven by pent up demand for domestic travel and tourism
“More and more hotels are re-opening, and many others have begun to move-up renovation plans and/or are repositioning their property with a brand conversion.” – Hotel Design Consultant
Industry Indexes Indicate Recovery
The AIA/ABI index is an early indicator of future construction and major remodeling activity; the index provides details on activities, inquiries and trends across the entire industry.
Data through July indicates improving conditions:
- Inquiries have increased since May at a significant rate for architectural and design services
- Contracts have remained consistent through early July with an suggesting a rebound due to holiday vacations and slow process to award contracts
- The commercial and industrial segments experienced the largest decline initially, however, are rebounding as a result of demand and opportunities
DuckerFrontier’s Building and Construction team continues to follow and analyze the key trends and impacting the hospitality and travel industry, both during and post Covid-19 disruptions. Visit our Covid-19 Resource Hub for the latest insights and implications for global business, or contact us to connect with a team member.