The American Hotel & Lodging Association (AHLA) has released its State of the Hotel Industry 2021 report—forecasting hotel and business travel outlook for the new year. It outlines the forecasted state of the hotel industry in 2021 and into the immediate future—business travel is not expected to return until 2024, and consumer comfort with travel is linked to vaccine distribution.
The report examines the high-level economics of the hotel industry’s recovery, the specific impact on and eventual return of business travel, and consumer travel sentiments. The pandemic has been devastating to the hospitality industry workforce, which is down nearly 4 million jobs compared to the same time in 2019. While some 200,000 jobs are expected to be filled this year, overall, the accommodations sector faces an 18.9 percent unemployment rate, according to the Bureau of Labor Statistics. In addition, half of U.S. hotel rooms are projected to remain empty in 2021.
Business travel, which comprises the largest source of hotel revenue, remains nearly nonexistent, but it is expected to begin a slow return in the second half of 2021. Among frequent business travelers who are currently employed, 29 percent expect to attend their first business conference in the first half of 2021, 36 percent in the second half of the year and 20 percent more than a year from now. Business travel is not expected to return to 2019 levels until at least 2023 or 2024.
In fact, according to the report, “business and group travel are not expected to begin their slow return until a COVID-19 vaccine is widely available in the second half of the year.
“Business travelers still anticipate traveling significantly less for work in 2021 compared to normal years. Twenty-four percent expect to take zero trips for work, 14 percent expect one trip, 25 percent expect two to three, 16 percent expect four to six and 21 percent anticipate seven or more trips for work.”
When it comes to how the vaccine will impact business travel plans, AHLA’s outlook study states that “of frequent business travelers, 42 percent of respondents said they are already comfortable staying in a hotel, while 52 percent say their comfort staying in a hotel is connected to vaccination. Among frequent business travelers, 62 percent expect to travel more for leisure and 51 percent expect to travel more for business compared to last year.”
In fact, the reports points out that “the recovery of the travel industry is anticipated to take place in three phases: leisure travel, small and medium events, and group and business travel.”
The top findings from this report include:
- Business travel is forecasted to be down 85 percent compared to 2019 through April 2021, and then only begin ticking up slightly.
- Half of U.S. hotel rooms are projected to remain empty.
- Hotels will add 200,000 direct hotel operations jobs in 2021 but will remain nearly 500,000 jobs below the industry’s pre-pandemic employment level of 2.3 million employees.
- Nearly half of consumers see vaccine distribution as key to travel.
- When selecting a hotel, enhanced cleaning and hygiene practices rank as guests’ number two priority, behind price.
- 56 percent of consumers say they expect to travel for leisure, roughly the same amount as in an average year.
“COVID-19 has wiped out 10 years of hotel job growth. Yet the hallmark of hospitality is endless optimism, and I am confident in the future of our industry,” said Chip Rogers, president and CEO of AHLA, in a statement.
“Despite the challenges facing the hotel industry, we are resilient. Hotels across the country are focused on creating an environment ready for guests when travel begins to return. AHLA is eager to work with the new Administration and Congress on policies that will ultimately help bring back travel, from helping small business hoteliers keep their doors open to ramping up vaccine distribution and testing. Together, we can bring back jobs and reignite a continued investment in the communities we serve,” said Rogers.
The resurgence of COVID-19, the emergence of new strains, and a slow vaccine rollout have added to the challenges the hotel industry faces this year. With travel demand continuing to lag normal levels, national and state projections for 2021 show a slow rebound for the industry and then accelerating in 2022.
The hotel industry experienced the most devastating year on record in 2020, resulting in historically low occupancy, massive job loss, and hotel closures across the country. The impact of COVID-19 on the travel industry so far has been nine times that of 9/11.
Download the full report here.
You Might Also Be Interested in
