Hotel acquisitions soared during the first half of 2022, with the number of deals hitting an all-time high and the dollar volume outstripping the tally for all but three prior January-through-June periods, according to the American Hotel & Lodging Association (AHLA).
The group attributed the investment surge in part to improving conditions within the industry, one of the U.S. businesses hit hardest by the pandemic. Gross room revenues have rebounded to 2019 levels, and the occupancy rate is approaching the pre-pandemic benchmark, with 63.4% of rooms projected to be filled on a typical night in 2022, according to the association.
That compares with an all-time low of 24.5% in April 2020 and 44% for that whole year.
Room revenues plummeted by nearly 50% in 2020 to $86.9 billion, the association said. The figure for just the first six months of 2022 is $170 billion.
In addition, hotel food and beverage and meetings revenues added another $48 billion to that tally, according to one of the group’s data providers, Kalibri Labs.
Along with the removal of COVID-related restrictions on development, that financial improvement buoyed investments in hotels during the first six months of 2022 to $18.3 billion, a 66.7% increase over the tally for 2019.
But the AHLA noted that the industry still has a way to go in its recovery. Revenue per available room, or RevPAR, won’t climb back to 2019 levels until 2025, the group projects.
It also notes that the industry will likely finish 2022 with 400,000 fewer jobs that it sported in 2019, and won’t get back to the pre-pandemic threshold until 2024.
Meanwhile, the business is struggling to fill the jobs it currently offers. In a survey, the AHLA found that 97% of the nation’s hotels are operating short-staffed, with 49% saying the problem is acute.
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