Hotel revenues from business travelers will fall about $20 billion short this year of the pre-pandemic level, according to the American Hotel & Lodging Association (AH&LA), signaling the crises is far from over for the lodging portion of the hospitality business.
The shortfall is also bad news for streetside fine-dining restaurants. About 41% of that sector’s sales typically came from out-of-towners, including business travelers with corporate travel and entertainment budgets, in pre-pandemic years, according to the National Restaurant Association.
The projected drop in room bookings and hotel food and beverage spending represents about a 23% decline from the corporate travel levels of 2019, the AH&LA says. It would follow a shortfall of $108 billion for 2020 and ’21, according to the group.
The business market is the U.S. lodging industry’s largest source of revenues. The AH&LA says that sector will take longer to rebound from the pandemic drop-off.
“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,” Chip Rogers, the AH&LA’s CEO, said in a statement. “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.”
The declines in corporate revenues are expected to be particularly steep for cities that depend on conventions to fuel their tourism industry. San Francisco, for instance, is forecast to suffer nearly a 69% drop-off, and New York City is projected to suffer more than a 55% decline.
The hotel projections call for a far more severe year than what the restaurant industry is forecast to face. Sales for the nation’s eating and drinking places should hit $665 billion in 2022, a nominal increase of 8% over the 2019 figure. Adjusted for inflation, that projection amounts to a 7.8% decline from the pre-pandemic number.
The hotel research was conducted for the AH&LA by Kalibri Labs.
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