Despite an uptick in leisure travel, a new report released by the American Hotel & Lodging Association (AHLA) shows that the road to recovery for the hotel industry is long—with 21 of the top 25 U.S. hotel markets remaining in a depression or recession. The new data shows urban hotels are still in a “depression” cycle while the overall U.S. hotel industry remains in a “recession.”
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. Urban hotels were down 52% in room revenue in May 2021 compared to May 2019. For example, New York City, which remains in a depression, has seen one-third of its hotel rooms (42,030 rooms) wiped out by the COVID-19 pandemic, with nearly 200 hotels closing in the city.
The recent uptick in leisure travel for summer is encouraging for the hotel industry, but business and group travel, the industry’s largest source of revenue, will take significantly longer to recover. Business travel is down and not expected to return to 2019 levels until at least 2023 or 2024. Major events, conventions and business meetings have also already been canceled or postponed until at least 2022.
The report shows the economic devastation still facing hotel markets and underscores the need for targeted relief from Congress for the ailing industry.
“While some industries are starting to rebound as COVID-19 restrictions ease across the country, the U.S. hotel industry is still in a recession, with the hardest hit markets in a depression,” said Chip Rogers, president/CEO, AHLA. “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.”