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On today\\u2019s show we\\u2019re taking a look at the impact of the emergence from the pandemic. We are facing a renewed sense of optimism in the economy with signs of dropping case counts for new infections. We have states like Texas and Mississippi fully opening their economies and dropping mask mandates completely.

But the path from A to B is rarely a straight line.

Some of the dropping case counts represent a false sense of security. A small but growing proportion of these cases are the so-called mutant variants that have higher rates of transmission. The UK variant is nearly 50% more transmissible than the original SARS Cov2 virus and represents a fast growing percentage of the new cases. It only took a few months in the UK for the new variant to become the dominant strain of the virus. So while the current case counts are dropping, the new variants represent a threat to the pandemic recovery.

There is no question that the emergence from the pandemic will vary widely from one geographic region to the next.

Cities that have a high exposure to travel and hospitality like Las Vegas will experience a protracted recovery, even if governments throw the gates wide open tomorrow. It is going to take time before the public at large regains the confidence to travel en masse for vacations. 2021 will continue to be a second year of social distanced, driving distance vacations.

Friends of mine who have taken recent trips report less than 25 passengers on aircraft capable of carrying 150 passengers.

The rate of vaccination is another variable. As of the first week of March, some states in the US report less than 15% vaccine penetration. Other states are currently at 25-30% vaccine penetration. These differences will also

Israel has led the world in terms of vaccine rollout. So far 85% of those over age 60 have been vaccinated, and 40% of those aged between 16 and 60 have been vaccinated. Recent reports from earlier this week show that Covid-19 infection rates for those who have been vaccinated in Israel are one in 1,500. If these results are mirrored elsewhere in the world, the outlook for an end to the pandemic is promising.

But it will take a long time before the rest of the world catches up to Israel. President Biden made a bold claim that enough doses will be available in the US to fully inoculate the population by May. So far as of March 3, the US has administer 23 doses of vaccine per 100 people. But in Canada, that number sits at 5 doses per 100 people.

There are a few warning signs for investors in hospitality. Of course the hotel industry has been hammered in 2020 due to the pandemic. There was a lot of new supply under construction in 2020 which could not have foreseen the pandemic or its impact. Four markets stand out with more than 9% of the existing inventory of rooms under construction. Those four cities are Nashville, Austin, San Jose and New York.

Ten markets have between 6-9% of their existing inventory under construction. Such a large increase in supply coming online in a short period of time leaves an uncertain future for hotels in those markets. Those 10 markets are Portland, Salt Lake, Denver, Savannah, Oklahoma City, Jacksonville, Columbus, Charlotte, South East Florida, and Detroit.

Hotel occupancy was 45% for the year and currently about 20% of hotels are in default on their loans. But lenders appear to be working with hotel operators and the number of forced transactions remains small at the moment.

Not surprisingly, hotels in sun belt destinations have fared better than most other areas. The lone exception is Hawaii where hotel occupancy is one of the lowest across the US.

The five worst performing markets for travel and leisure were New York, Boston, Chicago, Seattle, and San Francisco. All of these markets show declines in rev per available room in excess of 65% compared with 2019.