08/18/2021 | by
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The recovery in the leisure travel sector continues, despite concerns over new COVID-19 variants, while a similar trend in the business travel segment is yet to emerge, according to Jim Sullivan, managing director and REIT analyst at BTIG.

Speaking on the REIT Report, Sullivan said that as of mid-August, “we have not seen any material decline. Traffic volume is holding up pretty well in the face of the Delta variant concerns.”

Sullivan said Transportation Security Administration (TSA) data point to a “pretty consistently high” level of comfort in traveling, particularly for the leisure traveler. Recovery in the business sector is going to occur later, however.

One reason the leisure market is seeing strong demand is the new flexibility provided to travelers who are able to work remotely, Sullivan noted.

“What we're seeing now is that the weekend is no longer a two-day weekend. It's a three- or a four-day weekend. As people have been able to work from home, they've also been able to work from the resort. Being able to go away for a longer stretch of time translates into better business for hotels in these markets,” Sullivan said.

Meanwhile, the lodging sector continues to face labor challenges, according to Sullivan. This has resulted in hotel companies adopting more technology initiatives to reduce the necessary staffing that they would otherwise need.

Looking ahead, Sullivan said he will be watching the attendance rates at in-person conferences and whether any major events are canceled due to concerns about the Delta variant. He will also be looking at the level of business travel, and whether pent-up demand for in-face meetings actually translates into bookings.