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Business travel slows amid trade concerns, Park Hotels CEO says

Corporations have pulled back on business travel in recent months, partly due to concerns about international trade, Park Hotels & Resorts Inc.'s chief executive said.

In an earnings conference call, Park Hotels Chairman, President and CEO Tom Baltimore noted that there has been "a little bit of softening and choppiness" in demand for hotel rooms, particularly among business travelers. Baltimore said he believes there is little near-term risk of a recession, with interest rates and unemployment low, but added that he is concerned about slowing growth in private nonresidential fixed investments.

Park lowered its full-year 2019 guidance for adjusted funds from operations in its July 31 release of second-quarter earnings. Baltimore said weaker business transient bookings in June and July, along with softening forecasts in the segment, were a factor in the company's lower expectations. Uncertainty about trade — as President Donald Trump wages a trade war with China — is "clearly" affecting corporate travel at the margins, he added.

"I think CEOs, I think those men and women right now are just pausing," Baltimore said. "There's a little bit of caution. I think people want clarity as it relates to some of these outstanding issues, and particularly on the trade matter."

Asked whether slower business travel has affected the assumptions underlying Park's planned acquisition of Chesapeake Lodging Trust, Baltimore replied: "We would still say that we don't see a recession, and over the long term, we're very confident that this transaction makes sense."