Marriott encouraged by direction of European travel recovery

The Sheraton Frankfurt Airport Hotel

Insight Comment
Marriott’s exposure to Europe isn’t as big as some of its rivals but like them it has been waiting for things to get better. The question is will things stay this way?

 

The geographical impact of Covid-19 has been an uneven one and as the world starts to get back to normal the recovery has followed a similar pattern. 

So China, which was hit hardest first has bounced back quickest, followed by the likes of the United States. Europe has so far lagged behind. The hope is that it follows the trends seen elsewhere and the CEO of Marriott International Tony Capuano is starting to like what he sees in the data.

“Many of the markets in Europe, as you know, rely much more heavily on inbound international, so their recovery curve has been a bit flatter. But even there, we're starting to see some encouraging signs,” he told an audience at the recent Goldman Sachs Travel and Leisure Conference.

“Total bookings in Europe versus 2019 over the last two weeks were only down 48%. Now, for the first four weeks of this year, we were down 79%. So, we are seeing some recovery.”

The issue Europe has faced is one of market size. The US and Canada together and then China are Marriott’s two biggest markets and they both have a deep domestic market. European countries are smaller and rely more on international travel, which remains restricted.

The good news fro the travel and tourism industry is that when restrictions are relaxed, the international demand is there. It was the case last summer and the same has been true this year too.

“When Greece came out as one of the first European countries to say we are open for international inbound travel, in the last two weeks, we've seen inbound bookings up 6% versus the same two weeks in 2019,” Capuano said.

“I think the other thing that's been quite interesting, you saw the EU Commissioner come out in mid-May and say they were gearing up for quarantine free travel coming into European destinations. In the two weeks after that announcement, we saw the number of US bookings for Europe picking up about 40% versus the prior two weeks.”

Capuano’s relative optimism is a recent thing and shows just how quickly things can change in both directions. In the UK for example, which at one point was a leader in vaccine distribution, the growth of the so-called Delta variant has been something of a setback. In order to fully open up countries need to have vaccinated a significant portion of their population or they risk a slowdown in the return to normality.

“I think even a month or two ago, if we had talked about Europe, I probably would have been a bit more muted in my feelings about recovery. And again, I don't want to get too enthused about a couple of weeks of data. But again, as you see borders opening, the trends are quite encouraging,” Capuano added.