Billionaire investor Barry Sternlicht told CNBC on Wednesday that a recovery in travel in the U.S. is underway – at least in parts of the country like Florida – after a slowdown induced by Covid.
“We see all this pent-up demand coming back. It will be a frenzy this summer,” said the president and CEO of the Miami-based Starwood Capital Group at the Squawk Box.
For example, OpenTable’s Miami restaurant service data shows that many days in March were higher than the pre-pandemic levels of 2019.
Sternlicht also said that one of his company’s hotels in the area, 1 Hotel South Beach, is “ahead in February this year, ahead of 2019”.
His comments on Wednesday offer insight into the recovery of the US economy after the coronavirus crisis, which devastated sectors such as leisure and hospitality. In February, the number of people employed in leisure and hospitality was still almost 3.5 million less than in February 2020, according to data compiled by the Federal Reserve Bank of St. Louis.
However, expectations of significant economic improvement in the coming months are common. Last week, the Fed raised its US gross domestic product projections, forecasting a 6.5% increase in 2021.
“Recovery is well underway,” said Sternlicht, pointing to President Joe Biden’s recent comments that states need to open Covid’s vaccination eligibility for all adults by May 1.
Vaccinations are considered essential to enable recovery, giving Americans more confidence to engage in economic activities that they would otherwise have avoided during the pandemic, such as vacations and travel.
As of Tuesday, about 25% of the US population has received at least one dose of vaccine and nearly 14% have been fully vaccinated, according to the Centers for Disease Control and Prevention.
Sternlicht believes that pent-up demand will also boost the apartment market in the coming months.
“There are 5 million people living with their parents. They all go back to the apartments as soon as their jobs return and people go back to the office,” said Sternlicht, whose Starwood Capital focuses on global real estate investments, hotels and the energy sector. The Sternlicht company also launched Starwood Hotels & Resorts in 1995, which was acquired 20 years later by Marriott International.
“You are seeing people saying that they want to meet with their employees in person. … One of our companies has signed a $ 350,000 15-year lease in Germany in Berlin,” added Sternlicht.
He compared the desire to be in the office to those who still enjoy watching movies in theaters, despite the advent of digital streaming. “The truth is, it is a social event,” he said. “People are going to go back to the cinemas and go back to the office.”