America’s roadside motels are the stuff of folklore, cinematic hideaways for both the romantic and the criminal. But these no-frills, trucker hangouts may well suit different visitors this year: investors. Motel chains’ potential compares well with the outlook for fancier, city-centre hotels that cater to business travellers.
The US hotel industry took in $168bn in sales in 2019, according to the American Hotel and Lodging Association. Last year, it managed to make only half of that. While travel and leisure stocks have rallied in recent months on hopes that vaccinations will kickstart demand, the AHLA does not expect travel to return to pre-pandemic levels until 2024. Within this, business travel is forecast to be down 85 per cent compared with 2019 in the year to April 2021.
Yet as US lockdown restrictions ease, domestic leisure travel has picked up. Instead of flying to some far-flung location, Americans are jumping in their cars and heading out on the highway.