KSL Partners’ Eric Resnick On Revitalizing Hospitality And Why Remote Work Will Boost Corporate Travel

Of all the industries that were hit hard by the coronavirus pandemic, few experienced more disruptions than the travel and hospitality sectors. Travel restrictions, lockdowns and massive layoffs were just a few of the many things these industries have had to contend with for the past year and a half, and many people have been left wondering if travel, leisure and hospitality business owners, workers and investors will ever get a chance to return to normal. 

Lately, it seems, that question has been answered with a resounding “yes.” Travel is coming back strong, with passengers flocking to airports much more quickly than anticipated and airlines struggling to keep up. Meanwhile, hotel revenues are rising, though there are still lingering concerns about the delta variant and what that might mean for the future of travel. 

One person who has been keeping a particularly close eye on this market is Eric Resnick, the co-founder and CEO of KSL Capital Partners. KSL invests exclusively in travel and leisure businesses, so of course, the past 18 months have been particularly challenging for both the company and the businesses it invests in. 

Resnick was this week’s guest on the Walker Webcast, where he and Walker & Dunlop CEO Willy Walker discussed the future of the travel, leisure and hospitality industries and how his company has been able to thrive despite remarkable challenges posed by the pandemic. 

KSL was founded 16 years ago when Resnick and his team managed to raise $1B in their first fund. Today, the company has an estimated $15B in assets, 35 different businesses they own and 50 to 60 businesses that they lend to, all in the travel and leisure space. Walker asked Resnick what it was like for him at the beginning of the pandemic when the sector he is most invested in took such a hard hit.

“I’ve never seen something like it in my career, and I hope I never see anything like it again,” Resnick said. “We have about 100,000 employees, and more than 90% of them had to sacrifice in some way.” 

He added that 90% of his businesses were forced to close during those early days. In response, KSL developed a philosophy to protect three key parts of its business: its people, its liquidity and its future business opportunities. At the time, the team thought it would take three to four years for leisure travel to get back to where it was before the pandemic, and even longer for corporate travel. It turns out they were wrong. 

“On the leisure side, values are above where they were in 2019,” Resnick said. 

Corporate travel, however, has experienced a slower recovery. But Resnick said he believes that the increase in remote work will actually play a large role in helping corporate travel bounce back. 

“Remote work is going to increase traditional corporate travel, because in lieu of going to the office, businesses are going to bring people together for more off-site events,” he said. “We see opportunities in both travel sectors.” 

He added that he believes the competitive juices will start to flow again within sales teams, and people who go in person to visit clients may have a leg up over others, which will again spur a return of corporate travel. 

KSL also invests in vacation timeshares, and Walker asked Resnick about how that business is faring right now. Resnick said people are eager to prepay for vacations and are valuing their vacation time more, leading to increased interest in timeshare memberships. 

Along with its travel properties, KSL invests in health clubs and other leisure businesses, including Drybar hair salons. Resnick said that home fitness doesn't take the place of joining a gym because people tend to miss the socialization of health clubs and find it lonely to work out in their home gym. As a result, the company’s clubs are back to 70% to 90% of prior peak membership levels. 

KSL also owns Alterra Mountain Co., a skiing, snowboarding and biking hospitality company. Resnick said there is tremendous momentum coming into this ski season, and he expects the resorts will be able to operate in a much more traditional manner. 

Resnick closed out by saying that right now, KSL Partners’ team members are trying to be good corporate citizens. To that end, at Alterra, the company is looking for new energy-saving measures whenever possible. 

“It’s not just about doing the right thing for the environment, though that should be motivation enough,” Resnick said. “It's also about resonating with our customers, because that's now become important to our customers.”

Interested in viewing more Walker Webcasts? Visit the archive here. 

This article was produced in collaboration between Walker & Dunlop and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.