Stats: Hotels Show Huge Decline in Business Travel Revenue

According to a new report released by the American Hotel & Lodging Association (AHLA) and Kalibri Labs, the hotel industry is projected to end 2021 down more than $59 billion in business travel revenue compared to 2019. This comes after losing nearly $49 billion in business travel revenue in 2020.

Business travel includes corporate, group, government, and other commercial categories. It is the hotel industry’s largest source of revenue and has been slow to return since the onset of the pandemic. Moreover, business travel revenue is not expected to reach pre-pandemic levels until 2024.

The new analysis comes on the heels of a recent AHLA survey, which reported that most business travelers are reducing, canceling and postponing trips amid rising COVID-19 cases.

According to the report, the five markets projected to end 2021 with the largest declines in hotel business travel revenue are New York (down 88.4 percent compared to 2019); Washington (down 86.5 percent versus 2019); San Francisco (down 93 percent compared to 2019); Orlando (down 81.5 percent versus 2019) and Chicago (down 86.3percent compared to 2019). The five states projected to end 2021 with the largest declines in hotel business travel revenue compared to 2019 are California (down 74 percent), Florida (down 60.7 percent), New York (down 82.6 percent), Texas (down 60.3 percent) and Illinois (down 80.2 percent).

Hotels are expected to end 2021 down nearly 500,000 jobs compared to 2019. For every 10 people directly employed on a hotel property, hotels support an additional 26 jobs in the community, from restaurants and retail to hotel supply companies—which indicates that an additional nearly 1.3 million hotel-supported jobs are also at risk.

“While some industries have started rebounding from the pandemic, this report is a sobering reminder that hotels and hotel employees are still struggling,” said Chip Rogers, president and CEO of AHLA, in a press release. “Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline. Continued COVID-19 concerns among travelers will only exacerbate these challenges. That’s why it’s time for Congress to pass the bipartisan Save Hotel Jobs Act to help hotel employees and small business owners survive this crisis.”

COVID-19 is the worst economic event in the history of the U.S. hotel industry. Many urban markets, which are heavily reliant on business from events and group meetings, continue to face a severe financial crisis, as they have been disproportionately impacted by the pandemic.

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