The U.S. hotel industry is struggling to reach pre-lockdown levels this year, despite a strong recovery in leisure travel, as business travel revenues, which are the top contributor to the hotel industry, are still weak.
U.S. hotel business travel revenue is projected to be 23% below pre-pandemic levels in 2022, ending the year down more than $20 billion compared to 2019, states a new report released by the American Hotel & Lodging Association and Kalibri Labs.
This comes after hotels lost an estimated $108 billion in business travel revenue during 2020 and 2021 combined.
Meanwhile, leisure travel is expected to return to pre-pandemic levels this year. However, business travel, which is the hotel industry’s largest source of revenue, is expected to take significantly longer to recover.
“While dwindling COVID-19 case counts and relaxed CDC guidelines are providing a sense of optimism for reigniting travel, this report underscores how tough it will be for many hotels and hotel employees to recover from years of lost revenue,” said Chip Rogers, president and CEO of AHLA. “The good news is that after two years of virtual work arrangements, Americans recognize the unmatched value of face-to-face meetings and say they are ready to start getting back on the road for business travel.”
City-wise, San Francisco, New York City and Washington D.C. are expected to end 2022 with the largest percentage declines in hotel business travel revenue, as many urban markets, which rely heavily on business from events and group meetings, have been disproportionately impacted by the pandemic.
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