- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
IHG Hotels & Resorts CEO Keith Barr joins Yahoo Finance Live to forecast hopeful revitalization in the travel and leisure sectors for 2022, especially for international and business group bookings, as U.S. travel restrictions have just been lifted.
- The hotel industry received some good news on Monday in the form of the Biden administration lifting the travel ban on international visitors. Hotel CEOs, who are in New York City for a key industry conference, are telling me they already seeing a large uptick in bookings as a result of the ban lifting. Let's check in now with IHGs CEO Keith Barr.
Keith, good to see you here. A lot of folks have been telling me, like I just mentioned, they have seen a pretty large uptick in bookings this month as a result of this ban lifting. What are you seeing over IHG?
KEITH BARR: Yeah, good morning. It's great to be with you here from the Intercontinental in Times Square. And you can definitely feel a buzz beginning to come into the city as international travel reopens. When the administration made the decision to reopen borders, we saw a significant increase of international travel. And talking to my colleagues in the airlines, their phone lines were overrun the day of. And right now, it's pretty difficult to get a seat coming from Europe into the US on many of the international carriers, which is great for cities like New York, Washington, DC, and San Francisco.
- Are you seeing a good bit of pricing power here? I'm hearing rates, in some cases, depending on where you want to stay, up more than 50%.
KEITH BARR: Yeah, it's been one of the real positive surprises, for an industry that had such a challenging 18 months, was the strength of the recovery, which really started in earnest this past summer. We saw about 3,000 hotels here in the US that are in suburban locations have pricing at or above 2019 levels. And at the top end of the market, in the luxury and lifestyle brands and resorts, you're seeing significant pricing powers with rates up materially over 2019 because, again, consumers want to travel.
And COVID was a demand suppression event where people could not travel for a period of time. The consumer today, here in the US, has something like $2 trillion more in their pockets than they had pre-COVID. And they want to spend that money staying in great hotels, like Intercontinental, which is celebrating its 75th anniversary this year, but also staying at Holiday Inn Expresses and Kimptons and all of our brands, which is great to see.
- Keith, this is Emily. Wanted to ask a little bit about your split between leisure travelers as well as business travelers. And are you seeing a pickup in terms of those business-related bookings? Or is leisure and that type of consumer still leading the way higher right now?
KEITH BARR: Yeah, I mean, definitely we saw leisure travel be very, very strong once markets reopened. And we had that essential business travel, which most people tend to forget. There are a lot of people who have to travel to do their jobs-- going to a manufacturing plant, servicing it as a project team, and so forth. And the death of business travel has been highly overstated.
I remember, a year ago, people were saying business travel is never coming back. And what you're seeing from most of the global hotel companies is that a lot of that business travel has come back. And many markets were only about 15% to 20% versus 2019.
And we're continuing seeing that progress, again, as people come back into offices, as they reopen, as restrictions are lifted, vaccination rates continue to increase, consumers have confidence, business has confidence. But we think the leisure trend is here to stay. We think that consumers want to blend business and leisure travel and really want to get out and stay connected. And the international component of travel is a really important step for the United States.
- Keith, it's Julie here. What are you seeing in terms of hiring? You know, everywhere we go these days, seemingly, there are signs that say please bear with us. We're having trouble finding people. But if prices are going up for everything from hotels to food, everything else, I mean, how long are people going to put up with seeing those staffing shortages, experiencing them, and paying higher prices at the same time?
KEITH BARR: It's a real challenges for the entire service industry-- hospitality, travel, tourism, and restaurants. And it's not just a US issue. Actually, I was in France last week talking to President [AUDIO OUT] Macron with the CEO of Accor at an event. And we said one of the biggest challenges we face in the developed world is bringing staff back. Candidly, demand came back faster than this industry expected. And we've had a challenge bringing people back into the workforce.
We estimate that we're down between 25% to 30% in this industry. But we did see positive trends in October with the jobs report here in the US. And a significant portion of those jobs are in hospitality. So we're very focused now on bringing people back in, training them up, and making sure we can deliver great services to our customers. But it's still going to take a bit of time for this industry to fully staff back up.
- Keith, I have not heard one clear-cut solution on how to fill so many thousands upon thousands of open positions. How are you addressing this issue? If higher wages are not the answer, how do you get the workers you need back into your business?
KEITH BARR: I think part of it is about reshaping the view of the industry. It's a fantastic industry to work in. And many people think of it as a transitory career. I work in hospitality on my way to do something else. Actually, I started in this industry when I was a teenager. And 35 years later, I'm a global CEO. And so there's a great track record there of people starting at the front line and working their way up.
We have to get that message out. We've been very focused on recruiting, very focused on bringing people back into this industry, putting more and more resources in our staffing and development teams, and really, honestly, just getting the message out that hospitality is a great place to work. We are seeing wages go up, which is good for this industry.
And we're also seeing more and more people come back into the workforce because, unfortunately, the workforce that was significantly impacted, tends to be more ethnically diverse colleagues and women who left the workforce. And we're now beginning to see them come back in. And we have to make sure, though, we're offering the flexibility they need and the career development they need to be successful here.
- All right, we'll leave it there. IHG's CEO Keith Barr. Good to see you back in the city for the conference. We'll check in with you soon.