US: A new report from the America Hotel & Lodging Association highlights the economic devastation facing US hotel markets.
Whilst industry projections have improved since January with the uptick in leisure travel, the report highlights that urban markets have been disproportionately impacted by Covid-19 crisis. At the beginning of July, data showed that urban hotels are experiencing a depression cycle while the overall US hotel industry remains in a recession.
For example, New York City has seen one-third of its hotel rooms wiped out by the pandemic, with nearly 200 hotels closing. Other badly hit cities facing depression include San Francisco, Boston, Washington DC, Chicago, Seattle and Minneapolis.
Business and group travel is expected to take significantly longer to recover, with an anticipated return to 2019 levels in 2023 or 2024. Major events, conventions and business meetings have already been cancelled or postponed until 2022.
Key findings of the report include:
• Almost 500,000 direct hotel operations jobs have been lost during the pandemic
• Hotel occupancy is projected to drop 10 percentage points from 2019 levels
• Hotel room revenue will be down $44 billion compared to 2019 levels
• States and localities will have lost more than $20 billion in unrealised tax revenues from hotels over the past two years
“Despite an uptick in leisure travel, midway through 2021 we’re still seeing that the road to a full recovery for America’s hotels is long and uneven,” said Chip Rogers, president and CEO of AHLA. “These findings show the economic devastation still facing hotel markets and underscore the need for targeted relief from Congress for hotel workers and small businesses. Hotels and their employees have displayed extraordinary resilience in the face of unprecedented economic challenges, but whether it’s the Save Hotel Jobs Act, fair per diem rates, or expanding the aperture on the Employee Retention Tax Credit, we need Congress’ help on the way to a full recovery.”
The findings come as AHLA and the Asian American Hotel Owners Association hosts its Virtual Action Summit, where hoteliers are scheduled to meet with members of Congress. The aim is to urge Congress to:
• Cosponsor and pass the Save Hotel Jobs Act
• Cosponsor and pass bills to establish fair per diem rates
• Help provide hoteliers acmes to the Employee Retention Tax Credit