The hotel industry is projected to end 2021 down by more than $59 billion in business travel revenue compared to 2019, according to a new report released today by the American Hotel & Lodging Association and Kalibri Labs. That comes after losing nearly $49 billion in business travel revenue in 2020.
Business travel is the hotel industry’s largest source of revenue and has been slow to return since the onset of the pandemic. Business travel includes corporate, group, government and other commercial categories. Business travel revenue is not expected to reach pre-pandemic levels until 2024.
The new analysis comes on the heels of a recent AHLA survey, which found that most business travelers are canceling, reducing and postponing trips amid rising COVID-19 cases.
The lack of business travel and events has major repercussions for employment and underscores the need for potential targeted federal relief.
Hotels are expected to end 2021 down nearly 500,000 jobs compared to 2019. An additional nearly 1.3 million hotel-supported jobs are also at risk.
“While some industries have started rebounding from the pandemic, this report is a sobering reminder that hotels and hotel employees are still struggling,” said Chip Rogers, president and CEO of AHLA, in a statement. “Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline. Continued COVID-19 concerns among travelers will only exacerbate these challenges. That’s why it’s time for Congress to pass the bipartisan Save Hotel Jobs Act to help hotel employees and small business owners survive this crisis.”
COVID-19 is the worst economic event in the history of the U.S. hotel industry. Many urban markets, which rely heavily on business from events and group meetings, continue to face a severe financial crisis, as they have been disproportionately impacted by the pandemic.
Illinois has seen the fifth-worst decrease in terms of total revenue in the country, losing more than $2.4 billion from 2019 to 2021, bringing in under $600 million projected in 2021 versus more than $3 billion in 2019, the last year before the pandemic. In terms of percentage of the revenue lost, Illinois has seen the fifth-largest decrease with 80.2%.
St. Louis and Chicago have also both seen massive losses, with Chicago losing more than $2 billion in revenue from 2019 (86.3%, the fifth-largest decrease among major markets) to a projected $345 million in 2021 and St. Louis losing more than $385 million, or 68.5%, dropping to just over $177 million in 2021.
Despite being among the hardest hit, hotels are the only segment of the hospitality and leisure industry yet to receive direct aid. Hotels and their employees have displayed extraordinary resilience in the face of unprecedented economic challenges, and the industry needs support from Congress to achieve a full recovery, the AHLA stated.
The AHLA is the sole national association representing all segments of the U.S. lodging industry.
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September 17, 2021 at 12:30AM
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