As hotels constantly struggle to find the latest, greatest amenity to entice guests, the newest perk has hit the hospitality industry, and it isn't rooftop yoga -- it's a COVID-19 test. Find out how this might benefit hotel investors.
Room service and a COVID-19 test, please
International travelers now have another reason besides wanting a late-night snack to call room service. They can request a doctor to come to their room to administer either a rapid antigen or a PCR COVID-19 test. Or guests can go to a special testing room, depending on the hotel setup.
COVID-19 travel requirement
The Centers for Disease Control and Prevention (CDC) prefers you don't travel at all during the coronavirus pandemic. But for people who "must" travel, the CDC, on Jan. 26, 2021, made it a requirement for all air passengers over the age of 2 to have a negative COVID-19 test, taken within 72 hours of flying into the United States. If you don't have a negative test result, you don't board the plane.
New requirement affected travel
The CDC testing requirement put a damper on international travel -- even bigger than what already had been happening with travel during the coronavirus. Both domestic and international travel were way down in December 2020, tracking at 40% of trips purchased from 2019 totals. Potential travelers didn't want to risk being stuck in quarantine away from home if they were to get COVID-19.
After the CDC announcement, international travel dropped even more -- to 23% of 2019 sales -- largely due to confusion regarding the new policy and having the additional hoop to jump through to travel. Something had to be done.
It's big in the Caribbean
The early adopters for providing COVID-19 testing have mostly been Caribbean and Latin American hotels. Many countries in those regions have no COVID-19 travel restrictions, as opposed to many other international travel destinations that have been off-limits to Americans during the coronavirus pandemic.
It makes sense for hotels
Hotels are in the business to entice guests and make them happy, and one way they do this is by offering popular amenities. A COVID-19 test now makes the cut.
If all U.S. citizens over the age of 2 must get a COVID-19 test (and test negative) before boarding a flight into the United States, having the hotel offer the required test is the height of convenience. In fact, not offering a test might mean guests won't come at all -- searching for a testing facility in an unfamiliar place or needing to get to the airport even earlier to test just might make people wait to travel.
The tests have proven to make a difference. At Nayara Gardens in Costa Rica, for example, owner Leo Ghitis told Conde Nast Traveler that everyone who calls to make a reservation asks about testing options.
Depending on the type of test guests want, the price could be steep: a low of about $22 for a rapid antigen test to a high of up to $250 for a PCR test ($390 for an expedited PCR test at a Four Seasons resort in the Bahamas) -- just another line item on the hotel bill. But some hotels, like various Hyatt Hotels (NYSE: H) and Eden Roc Cap Cana in the Dominican Republic, are offering complimentary tests for a limited time.
If you test positive, many hotels offer discounted rates for your 10-to-14-day quarantine period. The Bahamas requires visitors to purchase health insurance that would cover the cost of a quarantine room, medical care if needed, or a private flight back to the U.S. for travelers who prefer to quarantine at home.
The Millionacres bottom line
The ability to get a COVID-19 test at your hotel might not be a typical amenity travelers seek. But these aren't typical times. Anything that can bring the hotel and hospitality industry back to life should be good news for investors.