The hotel industry continues to make strides toward recovery with hotel room revenue and state and local tax revenues projected to exceed 2019 levels, according to a report by the American Hotel & Lodging Association.
The 2022 Midyear State of the Industry Report, however, cautions that with inflation, revenue per available room may not surpass 2019 levels until 2025.
In Virginia, hotel room revenue is up more than $118 million, or 3 percent. Virginia is among a handful of states registering a 5 percent or less gain. Washington, D.C., Indiana, Minnesota and New York are not showing a recovery – and are not expected to reach 2019 levels this year.
Due to the pandemic, hotel room revenue fell by nearly 50 percent across the U.S. in 2020.
According to an analysis by Oxford Economics, 2022 room revenue should surpass 2019 levels by 11 percent in the U.S. as a whole by the end of the year.
“After a tremendously difficult two and a half years, things are steadily improving for the hotel industry and our employees. This progress is testament to the resilience and hard work of hoteliers and hotel associates, who are welcoming back guests in huge numbers this summer,” said AHLA president and CEO Chip Rogers.
Key findings of the report include:
- Hotel occupancy is expected to average 63.4 percent in 2022, approaching pre-pandemic levels
- Hotel room revenue is projected to reach $188 billion by the end of this year, surpassing 2019 levels on a nominal basis
- By the end of 2022, hotels are expected to employ 1.97 million people—84 percent of their pre-pandemic workforce
- Hotels are projected to generate $43.8 billion in state and local tax revenues in 2022, up 6.6 percent from 2019
- 47 percent of business travelers have extended a business trip for leisure purposes in the past year, and 82 percent say they are interested in doing so in the future
Like many industries, hotels continue to face a major workforce shortage that could also impact recovery.
In 2019, U.S. hotels directly employed more than 2.3 million people, according to Oxford Economics. This report forecasts that hotels will end 2022 with 1.97 million employees, or 84 percent of pre-pandemic levels. The hotel industry is not expected to reach 2019 employment levels until at least 2024.
According to a May 2022 AHLA survey, 97 percent of hotels indicated they are experiencing a staffing shortage, 49 percent severely so.
“While these findings highlight the important role hotels play when it comes to creating jobs, spurring investment and generating tax revenue in communities across the country, they also underscore the lingering challenges posed by one of the tightest labor markets in decades,” said Rogers.
The AHLA Foundation started a national ad campaign titled “The Hotel Industry: A Place to Stay” to help bridge the employment gap while introducing job seekers to the career pathways and perks the hotel industry offers.
The 2022 Midyear State of the Industry Report is based on data and forecasts from Oxford Economics, STR, Avendra, JLL and survey research from Morning Consult.
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Crystal Graham
