Huge losses for hotel business travel in 2021 (new survey)
In 2020, the hotel business travel sector has had a very difficult year with huge financial losses due to the Covid-19 pandemic. Data shows that 2021 will also end with significant financial losses for the hotel business travel industry. The above conclusion comes from a recent report by the American Hotel & Lodging Association (AHLA). Business travel demand is forecast to not return to 2019 levels until 2023, while the hospitality industry is expected to end 2021 down more than $ 59 billion in business travel revenue from 2019. .
During the pre-pandemic period, the hotel industry’s 5.3 million rooms generated $ 168 billion in annual revenue. This does not include the additional tens of billions generated by meeting rooms and other relevant sources of revenue. In 2020, hotel room revenue in the United States fell nearly 50% to just $ 84.6 billion. Room revenues are only expected to increase by $ 25.9 billion as we approach the end of 2021, still 34% below 2019 levels. In 2022, room revenues are expected to rebound a bit more, reaching around $ 144 billion, but still well below 2019 figures.
The third quarter of 2023 is expected to be the first quarter in which business travel demand is higher than the corresponding quarter of 2019, as the recovery in room rates lags behind demand, according to the AHLA report. Of course, employers will play an important role in helping to revive business travel. When the AHLA conducted this national survey in 2021, nearly 9 in 10 business travelers (87%) said their employer had imposed at least some restrictions on employee travel. Specifically, 37% of those polled said their employer had completely cut off all business travel, 34% said their employer had cut back on business travel for all employees, and 16% said their employer had cut back on business travel for all employees. reduced business travel for some employees. At the same time, 13% said business travel continues at the same pace.
Among business travelers whose employers have interrupted or reduced business travel, 21% expected them to resume to pre-pandemic levels in the first half of 2021, 26% in the third quarter, 16 % in Q4 and 29% after 2021. An additional 7% don’t expect business travel to ever return to pre-pandemic levels.
When it comes to bedroom revenue, the forecast refers to it taking 15 quarters to recover, which corresponds to the first quarter of 2024. By comparison, after the last recession, it took nine quarters for revenue to recover. . Lower level hotels and those located in coastal, mountainous and other outdoor areas are expected to outperform the market as a whole.
The increase in the distribution of vaccines in the country is a major factor in the recovery of the hotel sector. This is clear from the survey as 34% of Americans responded that they are comfortable staying in a hotel right now, while almost half (48%) said their comfort is related to one way or another to vaccination. Specifically, 20% will feel comfortable staying at a hotel again when a majority of Americans have received a COVID-19 vaccine and 17% will feel comfortable when they are personally vaccinated. .
Additionally, in the post-pandemic era, general cleanliness and safety protocols are the second most important factor that is most likely to influence Americans’ stay in hotels. The first major factor remains the price.
Follow the latest news live on CEOWORLD magazine and get updates from the US and around the world. The opinions expressed are those of the author and are not necessarily those of CEOWORLD magazine. Follow CEOWORLD magazine on Twitter and Facebook. For media inquiries, please contact: [email protected]