Full recovery for US hotel industry is ‘several years away’

The hotel industry will continue moving toward recovery in 2022, but the path will be uneven and potentially volatile, with full recovery still several years away, according to the American Hotel & Lodging Association (AHLA)’s 2022 State of the Hotel Industry Report. 

A key finding of the report was the rapid rise of “bleisure” travelers — those who blend business and leisure travel. One study of global business travelers found 89% wanted to add a private holiday to their business trips in the next year.
 
Other top findings of the report:

• Hotel occupancy rates and room revenue are projected to approach 2019 levels in 2022
   
• The outlook for ancillary revenue — which includes food & beverage and meeting space — is less optimistic
   
• Hotels lost a collective $112 billion in room revenue during 2020 and 2021
   
• Leisure travelers will continue to drive recovery: in 2019, business travelers made up 52.5% of industry room revenue; in 2022, business travelers are projected to represent just 43.6%
   
• Business travel is expected to remain down more than 20% for much of the year, while just 58% of meetings and events are expected to return; with the full effects of the Omicron variant not yet known
   
• In this new environment, technology will be even more critical to a property’s success, according to AHLA Platinum Partner Oracle Hospitality. Many hotels are investing in technology to meet the needs of both guests and employees today and in the future

“Hotels have faced enormous challenges over the past two years, and we are still a long way from full recovery,” facing,” said Chip Rogers, president and CEO of AHLA. “The uncertainty about the Omicron variant suggests just how difficult it will be to predict travel readiness in 2022, adding to the challenges hotels are already.

“The slow return of business travel and fewer meetings and events continue to have a significant negative impact on our industry. The growth of leisure and bleisure travel represents a shift for our industry, and hotels will continue evolving to meet the needs of these ‘new’ travelers.”

Liselotte De Maar, managing director in Accenture’s travel industry, added: “Travel and hospitality brands still face an uncertain marketplace, but all these changes also herald a new era of opportunity to drive long-term customer loyalty. They should flex with demand and respond to the added complexities and volatility in travel by delivering a ‘travel partner’ mentality to their leisure and business customers.

“Travelers are now not only focused on price and quality of a location, but also on cleanliness and sustainability values and impact, and expect a clearer, more digital service. Companies will need to continue to digitally transform, reinvent their loyalty model, as well as rethink the employee proposition, if they wish to thrive.”

Like other industries, hotels have been dealing with a major workforce shortage that could impact recovery. The AHLA Foundation is launching a new, national, multichannel ad campaign to help fill the hundreds of thousands of open jobs in the hotel industry. The pandemic wiped out 10 years of job growth.

This multi-year effort, “The Hotel Industry: A Place to Stay,” aims to help job seekers discover the 200 plus career pathways and many perks that the industry offers, including competitive wages, benefits, flexible schedules and travel opportunities.

The report was created in collaboration with AHLA Silver Partner Accenture and is based on data and forecasts from Oxford Economics and AHLA Platinum Partner STR.