Report: US Hotel Revenue To Top Pre-Pandemic Level This Year

A new report from the American Hotel & Lodging Association and Kalibri Labs is projecting that overall US hotel industry revenue will exceed 2019 levels, led by a brisk recovery in leisure travel and an unexpected rebound in business travel.

AHLA now is projecting that overall US hotel leisure travel revenue will come in 14% over pre-pandemic levels, which translates to nearly $12B in positive results.

The hospitality trade association also adjusted its outlook for hotel business travel upward: across US markets, AHLA says business travel revenue will come within 1% of 2019 levels, paring the projected loss to about $609K.

The business travel revenue projection is a vast improvement over the prediction AHLA and Kalibri issued in April, when they said US hotel business travel would come in 23% below pre-pandemic levels in 2022 and end the year down more than $20B compared to 2019.

Business travel—including corporate, group, government, and other commercial categories—is the US hotel industry’s largest source of revenue. During 2020 and 2021, the industry lost an estimated $108 billion in business travel revenue.

However, before any champagne corks are popped when considering this much rosier outlook, an important caveat must be noted: AHLA and Kalibri’s projects are not adjusted for inflation.

AHLA’s new report projects that hotels in 80% of the top 50 US markets will exceed their 2019 revenue totals for leisure travel this year, but the list of cities with hotels out of the red does not include NYC.

New York City’s projected 2022 leisure travel revenue of $5.4B represents a 4.3% decline compared to 2019’s total of $5.6B, a deficit of about $242M.

Only San Francisco fared worse among the top 10 US hotel markets, with a projected leisure travel deficit $355M compared to the pre-pandemic level, a drop of almost 19%; Washington DC, with a projected deficit of about $31M in leisure was the only other market in the top 10 with a negative outlook in leisure travel.

Seven of the top 10 hotel markets are expected to exceed 2019 results in leisure travel, with Orlando, San Diego and Dallas leading the pack with positive projected totals notching increases of about 25%, 20% and 19%, respectively.

While the AHLA report projects an across-the-board recovery in business travel revenue compared to April’s gloomy outlook, several of the top markets will fall significantly short of pre-pandemic levels in 2022 business travel revenue, led by San Francisco, DC and NYC.

According to the association’s report, released on Monday, the business travel revenue for San Francisco hotels will be more than 40% lower than 2019 results, a deficit estimated to total about $845M.

Business travel revenues at NYC hotels will be more than 22% lower than the 2019 level, a deficit of about $870M, AHLA projects, while DC hotels will see a shortfall of about 28%, a deficit estimated at $713M.

According to the report, 115K hotel jobs currently are open as the industry struggles to fill a labor shortage. AN AHLA survey last month revealed that hotel owners are deploying a variety of incentives to fill the gap, with 81% offering increased wages, 64% offering greater flexibility with hours and 35% expanding benefits.