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