Hotel industry recovers, but struggles with bumpy road

The hotel industry is expected to recover to near pre-pandemic levels after being battered by the COVID-19 outbreak, but the path to full recovery is still a long way off, according to a new report from the American Hotel & Lodging Association.

The report’s findings indicate that 2022 will be a year of growth for the industry as ‘bleisure’ travel – the intersection of business and leisure – will spark new demand. According to an analysis by Oxford Economics, the demand for hotel rooms in 2022 is expected to approach the level of 2019.

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But even though the industry will be on track for recovery in the new year, a full recovery could take several more years, partly due to the loss of support and room revenues. In 2020 and 2021, hotels alone lost $111.8 billion in room revenue.

“Hotels have faced tremendous challenges in the past two years and we are still a long way from a full recovery,” said AHLA CEO Chip Rogers. “The uncertainty over the ommicron variant suggests how difficult it will be to predict travel readiness in 2022, adding to the challenges hotels already face.”

Guests will check in to the Red Rock Resort after the property opened on June 4, 2020 for the first time since its closure on March 17 due to the coronavirus pandemic in Las Vegas, Nevada. (Ethan Miller/Getty Images)

Leisure travelers will generate most of the positive momentum for the industry in 2022, but business travelers are expected to account for just 43.6% of room revenue, compared to 52.5% in 2019.

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As the pandemic keeps much of the U.S. workforce at home, business travel is expected to fall by more than 20% throughout the year. Meanwhile, only 58% of meetings and events are expected to take place.

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On the contrary, the influx of bleisure trips showed that 89% of business travelers want to add a private trip to their next professional outing in the next 12 months.

Passengers walk through Salt Lake City International Airport in Salt Lake City, Oct. 27, 2020. (AP Photo/Rick Bowmer, File)

“The slow return of business travel and fewer meetings and events continue to have a significant negative impact on our industry,” added Rogers. “The growth of leisure and leisure travel is shifting our industry, and hotels will continue to evolve to meet the needs of these ‘new’ travelers.”

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