Japan Lifts Covid Controls

Japan has announced that it will lift most of its Covid border controls beginning this Saturday. The change was supposed to take place on May 8th but it was expedited due to the Japanese national holiday season which starts this weekend.

The government will downgrade Covid to the status of a common infectious disease in May and has also repealed its mask mandates.

The country was one of the last major tourist destinations to drop hard-line restrictions on travel, opening finally to travelers on October of last year.

What They’re Saying This Week: Get Ready for Flight Rage

In speaking at a media briefing this week, Geoff Freeman, president and CEO of the U.S. Travel Association, warned, “This summer’s travel demand will be as strong as we’ve seen since before the pandemic, and potentially the strongest ever.” He added, “That kind of demand in a system that is woefully underfunded and understaffed is likely to create substantial frustration among travelers.”

Adding to things to be worried about include increasingly erratic weather patterns during hurricane seasons, a shortage of pilots and air traffic controllers and FAA overhauls that may not go as planned or cause interim chaos. The FAA has asked airlines in key airports including JFK to pull flights from an overcrowded and understaffed grid, making overbooking a foregone conclusion.

However, forewarned is forearmed.

What can meeting planners do:

  • Strongly encourage meeting goers to subscribe to push notifications in case of cancellations and delays.
  • Have someone on a hotline to help navigate rebookings to other airlines.
  • Try not to book flyers on tight turnarounds at connecting airports, especially in the middle of the country in the middle of summer storm seasons.
  • Make airport pickup and dropoff as seamless as possible to make up for likely frustration in the airport.
  • Encourage participants to join CLEAR or TSA Pre-Check. Security lines are getting longer and longer, especially on morning flights.
  • Add in “chaos” wait time before major aspects of the meeting starts. Participants are bound to be late in arrival, unraveled, tired and in need of rest.

Hotel Construction in the US Booms

In the latest United States Construction Pipeline Trend Report from Lodging Econometrics (LE), analysts report that construction pipeline projects in the U.S. continue to increase, standing at 5,545 projects/658,207 rooms at the close of Q1 2023. Up 9% by both projects and rooms year-over-year (YOY); project totals at Q1 ‘23 are just 338 projects, or 5.7%, behind the all-time high of 5,883 projects recorded in Q2 2008.

At the close of the first quarter, projects currently under construction stand at 1,051 projects/140,365 rooms, each showing 9% growth YOY. Projects scheduled to start construction in the next 12 months are at 2,060 projects/241,568 rooms, each up 8% YOY. Projects in the early planning stage account for 44% of the projects in the total U.S. construction pipeline at Q1. Early planning projects increased 10% YOY, setting an all-time high of 2,434 projects/276,274 rooms.

Lodging Econometrics says that this is the fourth consecutive quarter of total pipeline growth for the U.S., which can be, in part, attributed to the robust recovery of travel demand. Increased consumer confidence and spending activity has fueled strong occupancy and rate growth throughout the last twelve months as well. Developers are motivated to sign new projects anticipating more favorable financing conditions in the coming quarters. Owners are eager to wrap up existing brand conversion and renovation projects, which have been a substantial focus for many quarters now.

The U.S. hotel construction pipeline is expected to grow modestly or just incrementally through 2023. There are no growth spikes expected this year. The pipeline is back loaded, meaning there is ample opportunity for vendors/suppliers in the industry, and third party management companies.

At the Q1 close, sixty-two percent of projects in the total pipeline are concentrated within the upscale and upper midscale chain scales. These two chain scales continue to dominate the pipeline and that is not expected to change anytime soon.

Renovation and brand conversion activity in the U.S. continues to boom in early 2023, reaching record project counts of 1,953 hotels/253,533 rooms, for a 38% YOY increase by projects and a 37% YOY increase by rooms. LE expects renovation and conversion activity to continue into 2023 as owners spend to bring their hotels into alignment with current brand standards or look elsewhere for new brand identification.

A total of 103 new hotels/11,762 rooms opened in the U.S. in the first quarter. For the remainder of the year, LE forecasts another 493 new hotel projects/59,355 rooms to open, representing a combined 1.3% supply growth rate in 2023. LE analysts expect the upward growth in new hotel openings to continue with an additional 699 new hotel projects/81,574 rooms anticipated to open in 2024, for a 1.4% supply increase.

Source: Lodging Econometrics