Maui Business

National Report: 56% Expect to Travel for Leisure in 2021; Business Travel Not Expected to Return Until 2024

January 21, 2021, 8:14 AM HST
* Updated January 22, 9:45 AM
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Waikīkī Beach near the Royal Hawaiian Hotel. File photo by Wendy Osher.

The American Hotel & Lodging Association today released “AHLA’s State of the Hotel Industry 2021” outlining the forecast for the hotel industry in 2021 and into the immediate future.

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 organization reports that 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% unemployment rate, according to the Bureau of Labor Statistics. In addition, half of US 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, according to the AHLA.

Among frequent business travelers who are currently employed, 29% expect to attend their first business conference in the first half of 2021, 36% in the second half of the year and 20% more than a year from now. Business travel is not expected to return to 2019 levels until at least 2023 or 2024, according to the report.

Leisure travel is expected to return first, with consumers optimistic about national distribution of a vaccine and with that an ability to travel again in 2021.

The report found that heading into 2021, consumers are optimistic about travel, with 56% of Americans saying they are likely to travel for leisure or vacation in 2021. While 34% of adults are already comfortable staying in a hotel, 48% say their comfort is tied to vaccination in some way. 

The top findings from this report include:

  1. 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.  
  2. Half of U.S. hotel rooms are projected to remain empty. 
  3. Business travel is forecasted to be down 85% compared to 2019 through April 2021, and then only begin ticking up slightly.  
  4. 56% of consumers say they expect to travel for leisure, roughly the same amount as in an average year.   
  5. Nearly half of consumers see vaccine distribution as key to travel. 
  6. When selecting a hotel, enhanced cleaning and hygiene practices rank as guests’ number two priority, behind price.  
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“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.

“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.

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Hotels were one of the first industries affected by the pandemic after travel was forced to a virtual halt in early 2020, and it will be one of the last to recover, according to the AHLA. The impact of COVID-19 on the travel industry so far has been nine times that of 9/11.

The full report is available here.

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