Despite an uptick in leisure travel, a new report released by the American Hotel & Lodging Association found 21 of the top 25 U.S. hotel markets are still in a depression or recession. The new data shows urban hotels are still in a “depression” cycle while the overall U.S. hotel industry remains in a “recession.”
Urban markets, which rely heavily on business from events and group meetings, continue to face a severe financial crisis because they have been disproportionately impacted by the pandemic. Urban hotels were down 52 percent in room revenue in May compared to May 2019. For example, New York City, which remains in a depression, has seen a full third of its room count (42,030 rooms) wiped out by the COVID-19 pandemic, with nearly 200 hotels closing across the city.
In May, a national survey commissioned by the AHLA and conducted by Morning Consult found that only 29 percent of Americans would consider traveling to a city or urban destination this summer. Of the 2,200 people surveyed, 72 percent said they were uninterested in a vacation or leisure trip to a U.S. city or metropolitan area despite lower prices due to fewer people traveling.
Four markets were categorized in the AHLA report as either stabilizing/recovery or peak. Hotel revenue per available room in Phoenix was down 6 percent in May 2021 compared to May 2019, while Norfolk and Virginia Beach, Va., were up 1 percent. Two Florida cities, Tampa and Miami, posted substantial gains over 2019’s numbers, improving 10 and 31 percent, respectively.
Calls for Support
The recent uptick in leisure travel for summer is encouraging for the hotel industry, but business and group travel, the industry’s largest source of revenue, will take significantly longer to recover. Business travel is down and is not expected to return to 2019 levels until at least 2023 or 2024, according to the AHLA. A number of major events, conventions and business meetings have been canceled or postponed until at least 2022.