Hotel Industry Faces Long and Uneven Recovery, According to New AHLA Report

August 3, 2021

While leisure travel is starting to make a comeback, the U.S. hotel industry’s road to recovery from the pandemic is forecasted to be a prolonged and uneven one, with urban markets disproportionately impacted, according to a new report and state-by-state job loss breakdown released last month by the American Hotel & Lodging Association

The uptick in leisure travel has improved industry projections that were made at the beginning of this year, but the hospitality industry overall still remains well below pre-pandemic levels, according to Chip Rogers, president and CEO of AHLA, the sole national association representing all segments of the U.S. lodging industry.

“These [report] findings show the economic devastation still facing hotel markets and underscore the need for targeted relief from Congress for hotel workers and small businesses,” Rogers said. “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.”

Key findings from the report include:

  • More than one in five direct hotel operations jobs lost during the pandemic—nearly 500,000 in total—will not return by the end of 2021
  • Hotel occupancy is projected to drop ten percentage points from 2019 levels
  • Hotel room revenue will be down $44 billion this year compared to 2019
  • States and localities will have lost more than $20 billion in unrealized tax revenues from hotels over the past two years

The findings came as AHLA and the Asian American Hotel Owners Association hosted their Virtual Action Summit July 20-22. During this online event, hoteliers from nearly every state across the country met with members of Congress to share how COVID-19 has impacted the industry and call for additional aid by urging Congress to: 

  • Cosponsor and pass the Save Hotel Jobs Act (S.1519/H.R.3093)
  • Cosponsor and pass bills to establish fair per diem rates (H.R.2104/S.2160)
  • Help provide hoteliers access to the Employee Retention Tax Credit, which currently excludes many hoteliers

While it’s no surprise that hospitality was the first industry to be impacted by COVID-19 and will be among the last to recover, the pandemic will go down in history as the single worst economic event in the history of the American hotel industry—worse than 9/11 or the Great Recession, according to AHLA officials.

According to AHLA officials, although the recent uptick in summer leisure travel is encouraging, business and group travel, the industry’s largest source of revenue, will take significantly longer to recover. Business travel is down and not expected to return to 2019 levels until at least 2023 or 2024, with major events, conventions and business meetings canceled or postponed until at least 2022.  

Despite being among the hardest hit by the pandemic, hotels are the only segment of the hospitality and leisure industry yet to receive direct COVID-related aid

Headquartered in Washington, D.C., AHLA focuses on strategic advocacy, communications support and workforce development programs to move the industry forward. The association is committed to promoting safe travel while also creating a standardized safety experience nationwide through its Safe Stay initiative, an industry-wide initiative focused on enhanced hotel cleaning practices and social interactions and workplace protocols to meet the new health and safety challenges and expectations presented by COVID-19.

 

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