Hotel industry recovering but faces bumpy road
Bleisure travel, a crossover of business and leisure, is expected to launch new demand
Jeff Sica of Circle Squared Alternative Investments discusses Hollywood employment, business travel and the hospitality industry.
The hotel industry is projected to rebound to near pre-pandemic levels after being battered by the outbreak of COVID-19, but the path to full recovery is still a ways away, according to a new report from the American Hotel & Lodging Association.
The report's findings reveal that 2022 will be a year of growth for the industry, as "bleisure" travel – the crossover of business and leisure – will launch new demand. According to an analysis by Oxford Economics, demand for hotel rooms is projected to approach 2019 levels in 2022.
HOTELS FROM NEW YORK TO CALIFORNIA DEPLOY ROOM SERVICE ROBOTS AMID VIRUS-RELATED LABOR CRUNCH
But even though the industry will be moving toward recovery in the new year, full recovery can still take several years for reasons including the loss of ancillary and room revenue. In 2020 and 2021, hotels lost a collective $111.8 billion in room revenue alone.
"Hotels have faced enormous challenges over the past two years, and we are still a long way from full recovery," AHLA CEO Chip Rogers said. "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 facing."
Guests check in at the Red Rock Resort after the property opened for the first time since being closed on March 17 because of the coronavirus pandemic, on June 4, 2020 in Las Vegas, Nevada. (Ethan Miller/Getty Images)
Leisure travelers will drive most of the positive momentum for the industry in 2022, but business travelers are only expected to represent 43.6% of room revenue compared to 52.5% in 2019.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
As the pandemic keeps much of America’s workforce at home, business travel is expected to stay down more than 20% throughout the year. Meanwhile, only 58% of meetings and events are expected to take place.
CLICK HERE TO READ MORE ON FOX BUSINESS
On the contrary, the influx in bleisure travel revealed that 89% of business travelers are looking to add a private trip to their next professional outing in the next 12 months.
Passengers walk through Salt Lake City International Airport in Salt Lake City, Oct. 27, 2020. (AP Photo/Rick Bowmer, File)
"The slow return of business travel and fewer meetings and events continue to have a significant negative impact on our industry," Rogers added. "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."