Despite the recent encouraging uptick in leisure travel, the hotel industry is still in a depression, pulled down further by the dismal rate of business travel, events and business meetings, according to a new report from the American Hotel & Lodging Association (AHLA). Hotels are the only segment of the hospitality and leisure industry that is yet to receive any direct aid, despite its massive losses, it added. Keeping this in mind, the AHLA and UNITE HERE, the largest hospitality workers’ union in North America, continue to release data in hopes it will urge the Congress to pass the bipartisan Save Hotel Jobs Act.
The legislation, introduced by Senator Brian Schatz (D-Hawaii) and Rep. Charlie Crist (D-Fla.), can help provide assistance to the hotel industry until travel, especially business travel, returns to previous levels.
According to a new report released by AHLA, 21 of the top 25 U.S. hotel markets remain in a depression cycle, while the overall hotel industry in the country remains in a recession. Room revenue in urban hotels, which rely heavily on business travel and events, dipped 52% in May compared to May 2019. The negligible rate of business travel has also resulted in the closure of several hotels. In New York City, 42,030 rooms, amounting to one-third of the hotel rooms in the city, were wiped out by the COVID-19 pandemic, with almost 200 hotels closing down.
While leisure travel seems to be picking up steam in the summer, business travel is not expected to return to the 2019 level until at least 2023 or 2024. As per the study, RevPAR in suburban areas fell 21%, while it rose 1% in small metros/ towns. The overall room revenue in the U.S. fell 22%, as compared to May 2019, with San Francisco and Boston witnessing the biggest loss at 70% and 67%, respectively. Miami and Tampa, however, managed to recover far better, with RevPAR rising 31% and 10%, respectively.
“While many other hard-hit industries have received targeted federal relief, the hotel industry has not. We need Congress to pass the bipartisan Save Hotel Jobs Act so hotels in the hardest hit regions, especially urban markets, can retain and rehire employees until travel demand, especially business travel, comes back to pre-pandemic levels,” said Chip Rogers, president and CEO of AHLA.