Excerpt from CoStar
Speaking at the Hotel Data Conference, STR's Isaac Collazo said current data indicates a recession is unlikely due to strong employment.
While much of the recent discussion about the near-term fate of the hotel industry has been dominated by whether the broader economy faces a recession, STR Vice President of Analytics Isaac Collazo said those concerns are likely overblown.
Speaking during the "Bringing It All Together" closing general session at the Hotel Data Conference, Collazo said he simply doesn't believe a recession is in the cards.
We've not had a recession when employment is going up, and employment is going up," he said.
STR is CoStar's hospitality analytics firm.
Collazo added unemployment data is also encouraging because college-educated individuals, who are the most likely to be travelers, is especially strong.
"You can continue to look at the data, and this is stuff that has grounded me," he said. "I could be totally wrong, ... but I don't see a recession."
Kelsey Fenerty, senior research analyst for STR, said her point of view on a potential recession was a bit more pessimistic. She added the unemployment data is now showing the "massive" amount of young people who are not joining the labor force.
"With unemployment levels, yes we can say they're very, very low, but we also have a whole lot fewer people looking for or who are employed right now, which has given us a really tight labor market," she said.
At the same time, waving away the effects of a recession are foolish, she said, due to the correlation between rate and gross-domestic-product growth.
But either way, any looming downturn is likely to be smaller than what the hotel industry saw in 2020, she said, and concerns about things like rising gas prices are often overblown.
"Gas prices are relatively inelastic," she said. "You're probably not going to cancel that trip just because of that added cost. You might be annoyed, and you'll definitely complain. Maybe you skip the steakhouse and go to the burger joint instead, but gas prices are not going to materially impact demand."
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