Hotel revenues from business travel still below pre-COVID levels, report shows
AUSTIN (KXAN) — While many business sectors are returning to pre-COVID-19 pandemic levels, hotels are still seeing revenues below 2019 numbers, at least when it comes to business travel.
A new report by the American Hotel & Lodging Association and Kalibri Labs shows hotel revenue from business travel this year is expected to be 23% below pre-pandemic levels. That equates to a loss of $20 billion nationwide, the report says.
The new projections come after hotels have already lost a huge amount of revenue. The AHLA says hotels lost an estimated $108 billion in business travel revenue in 2020 and 2021.
The silver lining for hotels is leisure travel is expected to return to pre-pandemic levels this year. Business travel, however, is the industry's largest source of revenue and isn't expected to fully recover until 2024.
Hotels in only five states are expected to generate more revenue from business travel this year than they did in 2019. Nevada is projected to see revenue growth of 16.7%, or more than $500 million. Maine, Mississippi, Montana and South Dakota are the four other states projected to see revenue growth.
Wyoming is projected to see the biggest decrease in revenue from business travel. Hotels are expected to receive $271 million in revenue this year, down from $729 million in 2019, a 62.8% decrease.
Forecasts in Texas are slightly better than the national average. Hotels in the Lone Star State are projected to see an 18.1% decrease in revenue, compared to 23.1% nationwide. The Texas numbers equate to a decrease in revenue of more than $1 billion.
“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,” said AHLA President and CEO Chip Rogers. “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.”
San Francisco is the market expected to see the biggest reduction in revenue in 2022 compared to 2019: a 68.8% decrease, or more than $1.6 billion. On the opposite end of the spectrum, Las Vegas is projected to see the biggest growth: 17.7%, or about $475 million.
Hotels in Austin are projected to receive $629 million in business travel revenue this year, a 27.9% decrease from 2019's total of more than $870 million.