U.S. HOTELS ARE projected to incur more than $59 billion loss in business travel revenue this year compared to 2019, according to a report by the American Hotel & Lodging Association and Kalibri Labs. The loss was $49 billion from the segment last year and revenue from it is unlikely to reach pre-pandemic levels until 2024, the report added.
New York will be on the top of the list with an estimated loss of $4.03 billion, followed by Washington with $2.37 billion and San Francisco with $2.35 billion. Markets that also will suffer significant losses include such as Orlando with $2.28 billion, Chicago with $2.18 billion, Los Angeles with $1.93 billion, Las Vegas with $1.66 billion, Boston with $1.48 billion, San Diego with $1.22 billion and Hawaiian Islands with $1.18 billion.
According to the report, California will be the worst affected state by this trend. Florida, New York and Texas are next in the list. States such as Illinois, Massachusetts, Nevada, Georgia, Colorado and Virginia have also found a place in the top 10.
According to the report, 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.
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.
“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.
The AHLA said that lack of business travel and events has major repercussions for employment, and underscores the need for targeted federal relief, such as the Save Hotel Jobs Act.
“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.”
Hotels are expected to end 2021 down nearly 500,000 jobs compared to 2019 and an additional nearly 1.3 million hotel-supported jobs are also at risk, the report further said.
Statistics suggest that, for every 10 people directly employed on a hotel property, hotels support an additional 26 jobs in the community, from restaurants and retail to hotel supply companies.
“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,” the report said. “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.”