To get a sense of the financial fallout rippling across the travel industry right now, consider this statistic from Tourism Economics: The impact from COVID-19 will be nine times worse than the post-9/11 economy. The outlook is bleak for every part of the travel ecosystem, especially hotels.
“The hotel industry is at a critical juncture,” Chip Rogers, president and CEO of the American Hotel and Lodging Association, said in a press release at the end of April. Rogers called on Congress to offer more relief for hoteliers, saying, “We need more resources to survive this unprecedented time.”
Rather than wait on Congressional funding, Rachel Harrison, co-founder of Lion and Lamb Communications, developed a different approach: Take a cue from the bond market. The world of debt securities may seem like an unlikely source of inspiration — government- and corporate-backed efforts to pay down debts or raise capital aren’t exactly as thrilling as checking into an Instagram-worthy hotel on the beach — but hotels need cash now in order to open their doors when people are ready to travel again. Harrison’s initiative, “Buy Now, Stay Later,” is a program in which guests buy “hotel bonds” to cash in at a later date. Guests pay $100 — the minimum amount — and the bond is worth $150 after the 60-day maturation period. They can buy more of those bonds, too, depending on the hotel.
From the boutique LondonHouse in Chicago to the JW Marriott Houston Downtown, the program includes approximately 300 independent and branded hotels that run the gamut from limited-service to luxury properties. It’s not limited to the U.S., either. As I’m stuck at home, dreaming of a time when I can explore the world again, properties in South Africa, Bali, Saint Lucia, and more that are part of the bond program, remind me of just how much I miss the opportunity to board a plane and venture somewhere new.
Buying bonds is easier than dealing with the actual bond market. Guests can submit requests for bonds via a simple form that is sent directly to each hotel’s management. One proviso: The fine print includes a warning that the bonds are not guaranteed in the event that a hotel closes. If enough guests buy now and stay later, they may be able to avoid that worst-case scenario.
David McMillin is an associate editor at Convene.