Business-Travel Damage in Black and White

A recent report projects that hotels will lose even more business-travel revenue in 2021 than they did in 2020. And business-traveler sentiment isn’t providing a light at the end of the tunnel just yet.

A mid-September report from the American Hotel & Lodging Association and Kalibri Labs estimates that the domestic hotel industry will generate $59 billion less revenue from business travel in 2021 than it did in 2019—a figure surpassing the $49 billion hit that the industry took in 2020.

According to AHLA, “business travel is the hotel industry’s largest source of revenue and has been slow to return” even after Covid vaccines have been widely available since early 2021.

Among the top 25 business-travel destinations in America, the report predicts that 22 will see a reduction in revenue of more than 70 percent this year versus 2019. And the five top markets—New York; Washington, D.C.; San Francisco; Orlando; and Chicago—will each see business-travel losses of at least 81.5 percent, which severely hurts the ability of their meetings-focused hotels to stay afloat.

“This report is a sobering reminder that hotels and hotel employees are still struggling,” said Chip Rogers, president and CEO of AHLA. “Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline.”

Unfortunately, business-traveler sentiment for late 2021 is not rebounding yet, as the delta variant of Covid has caused rising case numbers and hospitalizations around the country. According to another recent survey done for AHLA by research firm Morning Consult, 67 percent of business travelers are likely to take fewer trips by the end of 2021 than they anticipated, while 52 percent say they are likely to cancel one or more planned trips with no immediate plans to reschedule.

“Continued Covid-19 concerns among travelers will only exacerbate the hotel industry’s challenges,” says Rogers. “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.”

On September 15, Rep. Charlie Crist (D., Fla.) publicly supported that position. “Congress has already helped other travel and tourism sectors with the passage of the Airline Payroll Support Program, Restaurant Revitalization Fund, and Save Our Stages Act,” Crist says. “Conditions for hotels are just as bad or worse than any other industry, and circumstances remain dire for the foreseeable future.” The Save Hotel Jobs Act will be part of the larger budget talks in Congress this week.

Meanwhile, AHLA provided its latest estimate on when business travel will return to 2019 levels: sometime in 2024.

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