Hotels have been severely affected during the pandemic as stay-at-home orders and Americans’ caution cut down domestic travel. But they’re hopeful for a turnaround as the vaccine rollout continues, and they’re putting more focus on one area of their business: weddings and wedding receptions.
Nearly half of all couples who had planned a wedding in 2020 either postponed their wedding until 2021 or later or held a small ceremony and delayed their reception to a later date, according to a survey by The Knot. About one-third of survey respondents said they planned to hold a larger reception—possibly as a first-anniversary celebration—over the next few months.
Weddings can offer big business to hotels. Beyond just wedding party and guest room bookings, weddings can also include booking a ballroom or outdoor event space and may include the hotel’s catering service as well.
“It’s not just weddings that are a source of post-pandemic pent-up demand for events and travel that can spur a rebound in the hotel sector,” Calvin Schnure, senior economist at Nareit, a trade association representing real estate investment trusts and public real estate, writes for Forbes.com. “Many other gatherings that were postponed during the pandemic may be rescheduled in the months ahead, from family get-togethers and college reunions to visits with the grandchildren.”
The hotel business has a lot to make up for. Total spending on travelers’ accommodations plunged nearly 71% in the second quarter of 2020, according to U.S. Census Bureau data. As states reopened, hotels regained some business, but still business was down nearly 44% in the fourth quarter of 2020 below the 2019 pre-pandemic peak.
Hotels believe business travel likely will be more slow to recover, due to the growth in online meetings and conferences. However, some analysts believe that leisure travel and wedding bookings could offer the most potential for an increase in the short term.
A hopeful sign: Since the rollout of the vaccines began, lodging and resort REITs have quickly grown. Total returns—which are capital gains plus dividends—from November 2020 to March 2021 jumped 81.4% for lodging and resort REITs, Schnure writes for Forbes.com: “Lodging/resort REITs have fully recovered their losses from the early months of the pandemic, and the improvements in the fundamentals for leisure and business travel are encouraging for future gains as the economy—and the wedding business—gets back to normal,” Schnure notes.