Skip to content

Search

Latest Stories

AHLA: After six months of pandemic, hotel industry near collapse

Unemployment for the sector remains high while occupancy stays low

SIX MONTHS AFTER the COVID-19 pandemic shut down travel in the U.S., the state of the hospitality industry remains frail, according to the American Hotel & Lodging Association. Indeed, despite slight increases in travel over the summer, AHLA said the industry is on the brink of collapse.

AHLA’s report, “State of the Hotel Industry Analysis: COVID-19 Six Months Later,” compares employment, consumer travel sentiment, occupancy and industry trends in August 2020 the immediate impact of the pandemic in March and April.


“When COVID-19 forced a virtual halt to the country, the economy and travel, the hotel industry was one of the first industries affected,” the report said. “Unfortunately, it will also be one of the last to recover.”

The report outlines five issues facing the industry today:

High job loss:  At the peak of the pandemic, nearly nine in 10 hotels had to lay off or furlough workers, and the hospitality and leisure industry lost 7 million jobs and is still down 4.3 million jobs since February despite small gains in employment in May and June. The sector’s unemployment rate is 38 percent, compared to the national average of 10.2 percent, and only 37 percent of hotels have been able to bring back at least half of their full-time employees. Another 36 percent have been unable to bring back any furloughed or laid off staff.

Low occupancy: Almost 65 percent of hotels remain at or below 50 percent occupancy, below the threshold at which most hotels can break-even and pay debt. While leisure travelers have increased average hotel occupancy since the historic low of 24.5 percent in April, thousands of hotels are at risk of collapse or are unable to hire back staff and there are low expectations that occupancies will pick up until 2021.

Travelers staying home: Only 33 percent of Americans say they have traveled overnight for leisure or vacation since March, and only 38 percent say they are likely to do so by the end of the year, compared to previous levels of 70 percent of Americans planning to take vacations in any given year. Currently, hotel reservations for the Labor Day holiday week are down 65 percent compared to last year, with only 14 percent of hotels being reserved for the holiday.

Urban hotels down the most: Urban hotels are major employers but with an occupancy rate of 38 percent they are faring significantly worse than the national average. Their room revenues were down 78 percent in July as many rely on groups, meetings and business travelers, which are currently nonexistent and unlikely to return until at least 2021. Instead, vacationers have favored drive-to destinations, smaller markets, and other outdoor spaces such as beaches. Absent an unlikely surge in occupancy, they will need Congressional action to avoid collapse.

Bad times in big cities: COVID-19 has left hotels in major cities across the country struggling to stay in business, resulting in massive job loss and dramatically reducing state and local tax revenue for 2020 and beyond. STR’s 25 largest hotel markets in the U.S. have been most negatively impacted by COVID-19 and continue to see an average occupancy of 50 percent less than last year.

“Hotels are central to getting our economy back on track and supporting millions of jobs across the country,” the report said. “A full rebound in travel is years away, and Congressional support is urgently needed to bring our employees back, keep our doors open and survive through this crisis.”

Last month, Speaker of the House Nancy Pelosi sat down for AHLA’s “The Forum: An AHLA Experience” webinar series to discuss the progress, or lack thereof, on the stimulus.

More for you

American Franchise Act announced in U.S. Congress to protect hotel franchising and jobs

House unveils act to boost franchise business

Summary:

  • House introduces AFA to boost franchise model and hotel operations.
  • The act establishes a joint employer standard.
  • AHLA backs the bill, urging swift adoption.

THE HOUSE Of Representatives introduced the American Franchise Act, aimed at supporting the U.S. franchising sector, including 36,000 franchised hotels and 3 million workers nationwide. The American Hotel & Lodging Association, backed the bill, urging swift adoption to boost the franchise model and clarify joint employer standards.

Keep ReadingShow less
U.S. holiday travel 2025 trends

Report: U.S. consumers’ holiday travel intent dips

Summary:

  • U.S. holiday travel is down to 44 percent, led by Millennials and Gen Z.
  • Younger consumers are cost-conscious while older generations show steadier travel intent.
  • 76 percent of Millennials are likely to use AI for travel recommendations.

NEARLY 44 PERCENT of U.S. consumers plan to travel during the 2025 holiday season, down from 46 percent last year, according to PwC. Millennials and Gen Z lead travel intent at 55 percent each, while Gen X sits at 39 percent and Baby Boomers at 26 percent.

Keep ReadingShow less
Report: Global RevPAR to rise 3–5 percent in 2025

Report: Global RevPAR to rise 3–5 percent in 2025

Summary:

  • Global hotel RevPAR is projected to grow 3 to 5 percent in 2025, JLL reports.
  • Hotel RevPAR rose 4 percent in 2024, with demand at 4.8 billion room nights.
  • London, New York and Tokyo are expected to lead investor interest in 2025.

GLOBAL HOTEL REVPAR is projected to grow 3 to 5 percent in 2025, with investment volume up 15 to 25 percent, driven by loan maturities, deferred capital spending and private equity fund expirations, according to JLL. Leisure travel is expected to decline as consumer savings tighten, while group, corporate and international travel increase, supporting RevPAR growth.

Keep ReadingShow less
Hotel data challenges report highlighting AI and automation opportunities in hospitality

Survey: Data gaps hinder hotel growth

Summary:

  • Fragmented systems, poor integration limit hotels’ data access, according to a survey.
  • Most hotel professionals use data daily but struggle to access it for revenue and operations.
  • AI and automation could provide dynamic pricing, personalization and efficiency.

FRAGMENTED SYSTEMS, INACCURATE information and limited integration remain barriers to hotels seeking better data access to improve guest experiences and revenue, according to a newly released survey. Although most hotel professionals use data daily, the survey found 49 percent struggle to access what they need for revenue and operational decisions.

Keep ReadingShow less
Hyatt Way partnership

Hyatt taps Way for unified guest platform

Summary:

  • Hyatt partners with Way to unify guest experiences on one platform.
  • Members can earn and redeem points on experiences booked through Hyatt websites.
  • Way’s technology supports translation, payments and data insights for Hyatt.

HYATT HOTELS CORP. is working with Austin-based startup Way to consolidate ancillary services, loyalty experiences and on-property programming on one platform across its global portfolio. The collaboration integrates Way’s system into Hyatt.com, the World of Hyatt app, property websites and FIND Experiences to create a centralized booking platform.

Keep ReadingShow less