REAL ESTATE NEWS

RETAIL, RECREATION REBOUNDS AMID WIDESPREAD VACCINATIONS

Published on Monday, April 12, 2021

While trips to the office are sticker because they are dictated by employer policy, leisure movement is hitting near pre-pandemic levels for the first time since July 2020.

 

As vaccinations reach critical mass, in-person retail and recreation visits are recovering more rapidly than trips to the office over the past month in the US, according to Fitch Ratings<

While trips to the office are sticker because they are dictated by employer policy, leisure movement is hitting near pre-pandemic levels for the first time since July 2020 in the US, according to Fitch. Not surprisingly, increased leisure travel is having a positive impact on US CMBS hotel and retail delinquencies.<

While vacation travel is picking up, business travel may be slow to follow. In a recent podcast discussion with CBRE, professor Joel Kotkin, author of “The Human City, ” said <many workers will choose to attend events remotely as opposed to flying cross-country for a dinner. <

“I think where you are really going to see some changes is that people are going to start to look at different places, different options, and different ways of doing things,” he said. “And I think the key thing for cities—and this is what I would tell the city leaders—make the places livable, make them more attractive. And I think a bigger problem than the pandemic is the breakdown of law and order and the rise of crime that there’s no recovering from. I think these things are really important issues, and I think cities should focus on how do you control that first.”<

In contrast, workplace visits are still 25% below the baseline, according to data from Fitch, Oxford University, Haver Analytics and Google Mobility Reports. They have stayed at that level since the summer of 2020. Fitch attributes the continued lag in office visits to the effect of flexible working. With the rise of vaccination not increasing travel to the workplace, Fitch concludes that culture is driving remote work.<

But that could change in the second half of the year. A poll by Gartner indicates that <human resources leaders were eyeing office reopenings later in the year.<

Of the 258 sampled in the Gartner poll, 45% expect their workplace to reopen in 3Q21. Almost one-quarter (24%) more are planning for their workplace to reopen in 4Q21.<

“Given the uncertainty that will exist around vaccination status, most organizations that reopen will do so with social distancing and mask wearing in place,” said Brian Kropp, chief of research for the Gartner HR practice, said in a prepared statement. “Regardless of reopening plans, only 1% of the HR leaders we surveyed expect all of their employees to work full-time in the office.”<

While the slow return to work is a trend in Israel and the US, it isn’t universal. In Germany, Fitch found that spring and autumn 2020 travel to the workplace was only on average 15% below baseline. But it reached a 20% drop in the Winter. Fitch says sectors were not digitized before the pandemic in Germany, which means many companies are not equipped for remote work.