Skip to content

Search

Latest Stories

HVS: Lodging tax revenue may drop $6.1 billion in some U.S markets

Other industries, including tourism and conventions, will suffer from that loss

THE COVID-19 PANDEMIC’S impact on the U.S. hotel industry could lead to a multi-billion dollar loss of lodging tax revenue, according to hospitality consulting firm HVS. Those losses are likely to roll over to the convention and tourism industries.

HVS estimates combined lodging tax losses of $4.4 to $6.1 billion across 25 U.S. urban markets due to the impact of COVID-19. Stakeholders will be forced to do debt refinancing or seek alternative revenue streams until the hospitality industry recovers from the pandemic, it said.


Before the onset of the crisis, in 2019, 25 major U.S. markets generated around $3.7 billion in lodging tax revenue, HVS said. Much of that supported debt service for the construction of convention centers, arenas and other public assembly facilities. It also makes up a large share of the funding for destination marketing organizations (DMOs) and covers the operating deficits of convention center venues.

“The effect of the COVID-19 pandemic on lodging tax revenue presents serious challenges to DMO, convention centers, and other public and private agencies that are dependent on this revenue stream. The loss of revenues necessitates remedial actions on the part of federal, state, and local governments,” said Thomas Hazinski, managing director of HVS convention, sports, and entertainment facilities consulting.

“Governments may need to refinance debt that is repaid by lodging tax revenues if reserves are insufficient to cover existing debt service obligations,” Hazinski said.

Rahul Patel, managing partner at Patel|Gaines law firm in San Antonio, Texas, said previously hotels’ taxes may go up as a result of the crisis.

“We’re doing everything we can as a country to pump dollars back to business owners, but at some point it’s going to come from somewhere, right?” he said. “We know that, and it’s going to come in the form of taxes at some point, whether that’s income taxes, sales tax, property taxes, occupancy taxes, whatever you call it it’s going to come back.”

HVS projects that if the current weekly level of RevPAR continues throughout April it will drop to $15.61 from a pre-crisis level of $116.97, an 86.7 percent decline from the prior year. RevPAR in the U.S. urban markets reached a low point of $83.98 in 2009 during the great recession but exceeded pre-recession levels by reaching $110.40 in 2014, a five-year recovery period.

Earlier, STR Global estimated room-night demand and ADR growth of 1.9 per cent in 2020 and 2.3 per cent growth in 2021. HVS assumes the room-night demand would have grown at 1 percent per year and ADR would have grown at an average rate of 2 percent per year.

HVS said the recovery of room night demand differs by market segment.

“Essential business travel is the first to recover followed by transient leisure travel. The recovery of group meeting business lags the other segments because these events have long term planning horizons and corporate spending on group events is depressed during periods of economic distress,” Hazinski and Joseph Hansel, HVS research analyst, wrote in an article. “The sudden and massive shift to online meetings has already provided a substitute for group travel. Some use of electronic meetings may persist after travel restrictions are lifted, but eventually, group travel will recover.”

More for you

Extended Stay America survey 2025

Study: Extended-stay hotels feel more like home

What makes extended-stay hotels better than vacation rentals?

EXTENDED-STAY HOTELS OUTPERFORM vacation rentals and apartments in comfort, value and sense of home, according to a survey by Extended Stay America. About 79 percent of respondents said extended-stay hotels are like a home away from home, while 82 percent said they offer a stronger sense of home than vacation rentals or apartments.

In the national survey by ESA and Wakefield Research, respondents preferred extended-stay hotels over other options, citing amenities at 34 percent, comfort and familiarity at 33 percent and personalization at 30 percent.

Keep ReadingShow less
Zack Gharib Red Roof

Red Roof bets on people, tech for growth

Red Roof’s 2025 Vision: Innovation, Inclusion & Growth

RED ROOF IS focusing on strategic investments in people and technology to advance the brand amid evolving challenges, said Zack Gharib, Red Roof’s president. Gharib also spoke about the company’s new prototype, the power of the extended stay segment and human trafficking.

Regarding its diversity and inclusion efforts, the company focuses on its long-standing initiatives including SHE, inspired by Red Roof and Road to Inclusion, Diversity and Equality. SHE and RIDE recently helped Red Roof prioritize women and underrepresented communities with more than 30 new projects.

Keep ReadingShow less
Analyze competitive set data to boost revenue in the USA hospitality market

HotStats: Updated comp sets boost revenue

Why U.S. Hotels Must Regularly Update Their Competitive Sets

HOTELS SHOULD USE an updated competitive set to maximize revenue, control costs and maintain market position, according to HotStats. Those that fine-tune their comp sets consistently outperform others by using real-time insights to guide pricing, labor and revenue strategies.

The comp set should be reviewed at least once a year, HotStats wrote in a recent blog post.

Keep ReadingShow less
Two best friends reunite on a Days Inn trip for social media ambassador campaign

Days Inn launches $10K bestie contest

How Can You Win $10K with Days Inn’s Best Friends Contest?

WYNDHAM HOTELS & RESORTS’ Days Inn brand is launching a nationwide search to reunite five pairs of long-distance friends as brand ambassadors. The pairs, named “Days Inn-siders,” will spend a weekend highlighting a destination on the brand’s social media and receive $10,000, accommodations, flights and a daily stipend.

The initiative aligns with National Best Friends Day on June 8, and applications are open online through July 1, Wyndham said in a statement.

Keep ReadingShow less
Ameyalli Park City by Appellation resort

Appellation, Chopra launch Utah retreat

Introducing Ameyalli Park City by Appellation

APPELLATION HOTEL BRAND co-founders Charlie Palmer and Christopher Hunsberger are working with wellness expert Deepak Chopra to launch a new branded hospitality concept, “Ameyalli Park City by Appellation”, near Park City, Utah. The 78-acre retreat, set to open in 2026 in Midway, will include an 80-key hotel, a wellbeing center and multiple dining venues.

The resort will feature the Ameyalli Center of Excellence, offering health and longevity programming based on Chopra’s seven pillars of wellbeing: emotional regulation, sleep, mindfulness, movement, relationships, nutrition and laughter. Appellation will operate the property.

Keep ReadingShow less