Hotels struggle to return to pre-pandemic levels as business travel slowly recovers

The hotel and lodging industry is expected to lose the most revenue this year, compared to pre-pandemic levels, as the business travel industry has been slow to recover.

However, the hospitality industry expects leisure travel revenue to reach a full recovery by the end of 2022, which could bring in a larger percentage of revenue than the hospitality industry and of accommodation will see this year.

A recent analysis by the American Hotel and Lodging Association (AHLA) and Kalibri Labs estimates that the hospitality industry will end 2022 down $20 billion on business travel, particularly from pre-COVID-19 levels. pandemic.

A hit to business travel is especially critical for hotels, as they accounted for an estimated 52.5% of lodging industry revenue in 2019. In 2022, the AHLA expects Business travel revenues for hotels drop to 43.6%. And that’s after the travel industries lost $108 billion in 2020 and 2021 combined.

The lack of business travel primarily affected urban areas, which relied on conventions, group meetings and other special events as a much larger source of revenue than leisure travel. However, leisure travel is recovering at a much faster pace.

The AHLA expects leisure travel to return to pre-pandemic levels in 2022 as any remaining wave of COVID-19 or its variants will have less of an impact on people’s travel decisions. The lifting of restrictions on public transport is also expected to increase leisure travel.

Forecasts indicate that leisure travel will play a much larger role in hotel and lodging industry revenue by 2024, when the business travel industry is expected to fully recover, predicts the AHLA.

“The decline in the number of COVID-19 cases and the easing of CDC guidelines gives a sense of optimism to restart travel,” said Chip Rogers, president and CEO of AHLA.

However, other factors such as rising inflation, airfare prices and gasoline prices could hamper the recovery, which many travelers found worrying. Still, travelers are feeling more optimistic for 2022 than in the past two years of the pandemic.

A report released earlier this year by AHLA highlighted the emergence of a new type of traveler who combines business and leisure, which the report describes as “bleisure” travel. With the growth of remote work, more and more travelers are mixing business and pleasure.

“Globally, 89% of business travelers say they want to add a private vacation to their business trips,” the report said.

American Airlines expects return to profitability in second quarter as travel demand picks up Photo: AFP / Daniel SLIM

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