PKF Hospitality Research Senior Economist Jamie Lane leads the hotel-industry forecasting and research efforts at the Atlanta-based company, which this summer was acquired by commercial real-estate services giant CBRE. Along with PKF Hospitality President Mark Woodworth, Lane this month co-authored a study analyzing the potential impact the Ebola scare may have on U.S. hotel room demand, and used the SARS (severe acute respiratory syndrome) outbreak of 2003 as a primary point of reference. He spoke with Travel Weekly hotels editor Danny King.
Q: What are the early indications of the Ebola impact on the U.S. hotel industry?
A: We haven't seen any effect at all on any of the cities in the U.S. We continue to see strong [demand] growth in Dallas and Atlanta [the two U.S. markets most associated with the Ebola scare].
Q: Are you surprised by that?
A: That doesn't surprise us. The risk to the traveling public hasn't been substantiated, so it'd be irrational for people to stop traveling at this point.
Q: How are you getting to that conclusion?
A: We get data on the top 55 markets in the U.S., and we have forecasts for all of those markets. Any deviation we see in the actual numbers coming in based on our forecast numbers, we will investigate if it's Ebola-related.
Q: Your report notes that the SARS scare had the largest negative impact on U.S. gateway cities such as New York, Los Angeles, San Francisco, Boston and Washington. Has hotel room demand in those cities been impacted by the scare?
A: We are monitoring those cities, as well, and we haven't seen any effect. [Previously] we saw the effect because of the major amounts of Asian travel. There's a lot less travel from Africa.
Q: Did you consider any precedent other than SARS when doing the study?
A: We outlined the impact of what have historically caused demand shocks, whether it was the economy or other events. The other [potential] precedent was the impact that 9/11 had on U.S. hotel performance, because it did cause a fear of travel, and that stigma in the industry lasted for a while.
But we didn't feel like it was relevant to analyze it as in depth as SARS because [the impact] lasted so long. With SARS, once the risk was mitigated, we saw the impact quickly dissipate.
Q: Your report says that SARS may have cost the U.S. hotel industry as much as $2 billion in lost revenue, but you're not forecasting the same level of impact with Ebola. Why?
A: It's important to note the difference in the transmission of Ebola and SARS. SARS could be transmitted airborne, which made it very risky to be on a plane or in a hotel. Ebola [which is transmitted through bodily fluids] is much different. But we're continuing to watch any city that has any confirmed cases, and how that transmission occurs. If there were confirmation that anyone was infected while traveling, that would worry us.
Q: How do the changes in the international travel-screening process play into this?
A: We think that's a positive. There's much more sophisticated border screening now [than in 2003] because of the time we live in. If they need to ramp up the border-screening process, they seem to have the ability to do that. That's a positive for the industry, and that should cause people to worry less.