Travel’s Going to Look a Little Different for a while.
Photo: Al Seib/Los Angeles Times Via Getty Images
IT’S OBVIOUS THAT TRAVEL IS WAY DOWN RIGHT NOW, But Booking Holdings, The Company That Online Travel Agencies Including Pricece and Booking.com, Helps US Numbers to the Size of the Slide. Newly Boked Room Nights Through the Company’s Sites Were 85 Percent Lower This April Than The Same Month Last Year. To the extent People Are Booking Hotel Stays, the Company is see what it calls a “dumbbell” Pattern: reservations are eather nearly immediatte, for urgent travers, or they are for months from now, when travelers will have improved. For obvious reasons, Few People are planning vacations in june.
The Stays on the Far End of That Dumbbell Provide A Sign of Hope for a Hotel industry that is battered by a decline in business, but it is a sign that should be viewed warmy. Hotels, Like Airlines, have great relaxed their cancellation police, encuraging customers to book Now with the promise that they can get the Money Back if Conditions Remain Inhospitable to Travel. This has encountered customers to book Speculative Trips – Reservation the option to take a vacation in the late or fall, locking in a favor as airfares and hotel rates have fallen, and knowing they can be cancel the which ishf pandemic CONDITIONS CONTINE TO TRAVEL INADVISABLE. So hotels have to be prepared for the positionbility that reservations on their books now won’t turn into income, and that deposits they have will be willing to be refunded. That is, they is a miniature version of what they have faced in March, as Customers Canceled a More Full Book of Reservations en Masse.
“We have 10,000 Customer-Service People in Our Business, and they’re Working Real Hard, and this is just so overwhelming,” Says Glenn Fogel, the Ceo of Booking, adding that calls at times ben triple the normal levels. “And they’h not the work work from the Centers. They’re Working from Home. Imagine that. They got the kids yelling, trying to do schoolwork with the kids and all the others, at the Same time. THEN THE”S GETTING YELLED AT BY The Hotel. ”
MANY hotels relaxed the terms of their cancellation police at their initiative as the pandemic hit, but booking says it invoked force majeure clauses in its Contracts with hotliers that would not, Advancing refunds to customers and then demanding the side of any deposit. Transferred to hotels. Because Hotels Depend on their ongoing Relationships With Online Travel Agencies (an industry led by booking and its maintor, expmedia), book will like success in colcting these eventual – as Long as the hotels in the Business. But at Present, Many of the Propperties Booking Wold Contact to Seek Refunds Are Fully Closed. That leaves the Company Also Waiting to Collect the Commissions that is Owed for Hotel Stays that actually did in February. (If you book your stay through a site like prileine butnay for the staay at the hotel, the booking commission gets remitted from the hotel to the agency you are complica.) In its first-Quarter earnings announcement Last Week, Booking increes for Bad Bad. Expenese, acknowledging that it would be to go to the commissions it is Owed from hotels that are now in direct straits.
That Said, there is a distinction between the outlook for equity owners of hotel Properties – Very Grim, in Some Cases – and the Outlook for Hotel Stays as Activity. Relative to a restaurant, the investment in a hotel is more weighted Toward fixed, long-term investments in buildings and other Physical Capital and Less Toward the Intangible Aspects of the Enterprise. That means the supply of available rooms is relatively fixed over time: iTi’s expensive and time-consuming to build new hotels; Once the property is built, though, it”s likely to continue operating under some name, at some room rate, this if the participle of a participle of the hotel goes into foreclosure.
“The Building Will Reopen Under a New Name or the Old Name,” Says Fogel. “There’s New Capital. It Will Be There.”