To hear consumer company executives describe it, the leisure and hospitality industry is on the cusp of a major vaccine-fueled rebound.
Businesspeople are tired of working from home and want to gather again for group meetings and conferences. Teenagers and adults can’t wait for movie date nights or evenings out with friends. And theme parks that seemed like scary places a year ago are gearing up to do business in a new, increasingly inoculated world.
Or as one hotel group executive put it recently, “we will begin to see these first cracks in the ice in the coming weeks and months.”
Gaylord Texan owner Ryman Hospitality Properties Inc. said it’s “tremendous news” for the hospitality industry to see multiple COVID-19 vaccines approved and distribution ramping up nationally.
“Conditions are right for a very healthy recovery,” Ryman chairman and CEO Colin Reed told investors on a call last week.
The U.S. is now administering more than 1.7 million doses of vaccine on average every day, according to data from the White House and National Institutes of Health. In Texas, about 12% of the state’s population has received at least one dose of a vaccine.
And top U.S. coronavirus expert Dr. Anthony Fauci has estimated the majority of the general public will be able to get their first dose of a COVID-19 vaccine by April.
Widespread immunity couldn’t come quicker for hotels, theme parks, movie theaters and many other businesses banking on the success of vaccination efforts as they come off an unprecedented year for travel and leisure worldwide.
Ryman’s sprawling Gaylord Texan resort and convention center in Grapevine saw its revenue fall 62% during the pandemic that kept it closed from late March through June 8. It was the first Gaylord resort to reopen.
The Texan’s 2020 revenue came in at $111 million, down from $292 million a year earlier, according to its parent company.
And its occupancy rate checked in at 29.3% last year versus 78.2% in 2019. Even though Texas reopened early, the Texan managed only a 27% occupancy rate through the rest of the year.
In a call to discuss the company’s financial results, Reed said he sees pent-up demand from people wanting to meet in person again. With 1,814 hotel rooms and 488,000 square feet of meeting space, the Texan relies on business meetings for a substantial portion of its annual bookings.
“I believe that pent-up demand will begin to surge and let me assure you, our company will be ready,” Reed said.
A majority of live-event attendees and the companies that host them plan to return to face-to-face events by the fall, according to new research from Dallas event management firm Freeman.
Ryman, which reported annual revenue of $1.6 billion pre-pandemic, believes Americans will be ready to travel in increased numbers again in the “coming weeks and months.”
The company, which also operates Ryman Auditorium and the Grand Ole Opry, has seen about 2.5 million room nights canceled since March 2020. It has rebooked the majority of those for later dates, but its entertainment venues are seeing end-of-year 2021 booking volumes that mirror pre-pandemic demand, Reed said.
That optimism is shared by Richard Stockton, CEO of Dallas-based destination resort operator Braemar Hotels and Resorts.
“We are in the early stages of the recovery, but we can now see a clear path to normalcy,” Stockton told investors Friday.
Braemar’s revenue fell to $227 million last year, down from $488 million in 2019. Its luxury hotel portfolio includes Marriott, Hilton and Ritz-Carlton properties across the continental U.S. and Virgin Islands.
“The rollout of vaccines gives us hope that the hospitality industry can return to a more normal environment in the near future,” Stockton said.
Arlington-headquartered Six Flags is also optimistic theme park attendance and spending will bounce back in 2021, reinforcing that belief by restoring all employees to their full salaries with the exception of CEO Michael Spanos.
The company is still working with local governments to reopen several parks that remain closed due to pandemic restrictions.
Attendance at its open theme parks ended 2020 at nearly half of pre-pandemic levels. When it began reopening parks in the second quarter of the year, Six Flags was seeing just 25% of pre-pandemic attendance. The company posted a $423 million loss for 2020, a 76% decline from 2019.
“Our guest surveys indicate that there is extraordinary pent-up demand for outdoor entertainment options close to home, and we believe that this widespread desire will drive attendance in the coming quarters,” Spanos told investors last week.
In 2020, Six Flags laid off 10% of its full-time staff as part of a broad cost-cutting measure that it expects will deliver as much as $35 million in savings this year. But as CFO Sandeep Reddy told investors, much of that savings will depend on the company returning to “operating in a more normal business environment.”
For entertainment venues like Six Flags, that recovery is also going to be heavily dependent on whether states loosen pandemic restrictions enough for the operator to reopen idled parks, Reddy said.
At Plano-based Cinemark, leaders see vaccine adoption as key to getting people back to movie theaters. Meanwhile, the company continues to burn through roughly $65 million each month.
“We are singularly focused on becoming stronger, leaner and more competitive than ever before to lead the rebound in our industry, and we believe this rebound is imminent with active rollout of multiple vaccines,” Cinemark CEO Mark Zoradi said on an earnings call last week.
About 25% of Cinemark’s U.S. theaters were still temporarily closed at the end of 2020. The company made the decision to temporarily shutter all of its locations in the U.S. at the start of the pandemic last March.
It was the first major theater chain in North Texas to welcome moviegoers back in 2020, starting with a four-phase reopening process on June 16 at five Dallas-Fort Worth cinemas.
And while not every part of the U.S. has lifted pandemic restrictions to the extent Texas has, executives pointed to other recovering countries as an example of the “pent-up demand” that could drive a rebound.
In China, Australia and Japan — where COVID-19 has been more contained than in the U.S. — movie theaters are posting record box office revenues, Zoradi said.
“The Chinese New Year holiday brought in an all-time high of $1.2 billion with a staggering 160 million viewers visiting the movie theater, which also sets a record,” Zoradi told investors. “This was the first time ever that China’s single-day box office earned more than $155 million for five straight days.”