Hotel Slump Sparks Strategy Shift

Leisure travel is expected to rebound quickest and lead a recovery in the beleaguered hospitality industry, and some hotels are adapting accordingly.

Entering 2020, hospitality industry experts had no way of predicting a pandemic and the resulting widespread orders that shuttered the economy. The actions halted business and leisure travel virtually overnight, and neither is expected to fully rebound for some time. The leisure segment is expected to lead an eventual recovery, however, and that new reality is prompting some hotels to quickly shift strategies.


In New York’s Finger Lakes region, for example, operators of Hotel Canandaigua were focused on booking groups of around 250 in preparation for its summer opening. Loading up on groups is a common strategy for many new hotels, said Katie Patnode, director of sales and marketing for the property. But as dramatic changes began taking place in the spring, including a month-long ban on construction that has pushed the property’s opening into fall, Patnode began to leverage the hotel’s location. Not only is the hotel on Lake Canandaigua but it is also in the middle of western New York’s wine region.

Hotel Canandaigua in New York’s Finger Lakes region has shifted its focus from booking groups of 250 to attracting families and small groups of travelers looking for drivable but out-of-the-way retreats. Photo courtesy of Hotel Canandaigua

“Everything we’re hearing right now is that people are going to be traveling in small groups and avoiding dense, populated cities,” she said. “They’re going to focus on drivable destinations off the beaten path with a lot of open-air activities, and that’s exactly what we are. So we’re shifting our efforts to attract that clientele.”

Such settings will give travelers a sense of control over their environment and a feeling of greater health security, added Robert Mandelbaum, director of research information services for CBRE Hotels Research. “In general, hotels located in less dense areas with plenty of external outdoor space will be attractive,” he said. “Those oriented towards group meetings will most likely lag in recovery.”

Sector Insights rotates among office/medical office, industrial, retail, multifamily, self storage and hotel/hospitality.

Read the June 2020 issue of CPE.