Travel ‘tailwinds for the recovery are greater than the headwinds’: HotelPlanner CEO
HotelPlanner Co-Founder and CEO Tim Hentschel joins Yahoo Finance Live to discuss geopolitical tensions from Russia-Ukraine disrupting European leisure travel, Disney, China, and expected travel trends for 2022.
DAVE BRIGGS: All right, let's talk travel. Just when it seemed like the entire travel industry had bounced back from the pandemic came the Russian invasion of Ukraine, inflation in particular, high gas prices, and further COVID outbreaks. But is the data showing that travel will surge despite all that?
Let's talk about it with Tim Hentschel. He's the co-founder and CEO of HotelPlanner. Tim, good to see you. So what do the numbers show? A lot of reasons that would suggest people are going to travel less. Anecdotally, though, just got back from a trip. The parking lot was full at the airport, every flight was full, security was packed. What are your numbers showing?
TIM HENTSCHEL: Our numbers are showing the same as your anecdote. Basically, people are still getting out there. The tailwinds for the recovery are greater than the headwinds that we're seeing from inflation from the war. Basically, when it comes to the war, you know, Russia was never a strong-- or the Ukraine a strong travel destination for the US traveler. US travelers are still going to Europe in heavy numbers. And they're still getting around the US.
As it comes to inflation, you know, that is a number that we're looking at. And it may have more and more of an effect, especially since this recovery in travel from COVID is mainly due to a leisure traveler. And inflation will eat into their disposable income. But it will have an opposite effect on rates for hotels because as hotel occupancies drop, hotel rates drop. So if we have inflation eating into people's disposable incomes, then the rate should come down as occupancies drop.
DAVE BRIGGS: You mentioned Russia, Ukraine not huge destinations, probably not Poland either. But what about European travel in general? Has it been impacted?
TIM HENTSCHEL: Not that we're seeing. We're still seeing from all the pent-up demand, there is quite a bit of US travelers that want to get out there. All of the major indices in our industry for the Star Report and RevPARs are showing occupancies are rising in both the US and in Europe. We're expecting a strong travel season for the summer. And that should get occupancies back to 2019 levels. So we're encouraging people to book now and lock in your rates because as occupancies grow, as I said, so will rates. So now is the time to get a great deal.
DAVE BRIGGS: A more recent headline is the China plane crash, and I saw some numbers out on Bloomberg to just 74% of flights to China canceled in the 48 hours since. Are you seeing any impact?
TIM HENTSCHEL: We're not currently seeing an impact because that mainly affects APAC region, which I'm actually located in, Singapore. And we're on heavy lockdown still here for COVID. Both South Korea, Hong Kong, Japan, and Singapore are still on COVID lockdown. So there is not a lot of travel still going on in Asia. Our main markets where travelers are traveling is North America and in Europe. And in North America, we're seeing a lot of demand for dry vacations, so no, the crash in China did not affect us. And I don't think it affected most global travel companies.
DAVE BRIGGS: Curious, back here at home, today, the Disney walkout over their handling of the Don't Say Gay Bill that was passed there in Florida. Are people voting in a sense with their pocketbooks and staying away from Disney hotels?
TIM HENTSCHEL: No, not that we've seen at all. Disney always has a ton of demand, as if you've been to any park, you can attest for. So people will go to Disney. They planned those vacations over a year in advance to take their families there. So, no, we're not seeing any drop in demand for Disney or for Orlando in general. Orlando is one of our strongest markets after Las Vegas.
DAVE BRIGGS: An Amex poll out today said that February was their best month ever in terms of travel. What are the trends you're seeing for the upcoming year? Where are people going?
TIM HENTSCHEL: Well, like I mentioned, Vegas is coming back strong. So is Orlando. New York is another destination. Our headquarters is in Palm Beach, right next to Miami. Miami is very, very strong. So, you know, all of the major destinations are getting a boost from the pent-up demand. A lot of people stayed away from major cities over COVID. And now that we've recovered from COVID, people want to get back to those major cities again, especially as they bring down the vaccine requirements, as New York just dropped their vaccine requirements and other major cities have, too. That's getting people out there to travel again.
DAVE BRIGGS: Tim Henstchel, co-founder and CEO of HotelPlanner, really appreciate you being here. Thank you, sir.