A new report from the American Hotel & Lodging Association and Kalibri Labs projects the hotel industry will end 2021 down more than $59 billion in business travel revenue compared to 2019. The industry already lost nearly $49 billion in business travel revenue in 2020.
Business Travel
The new analysis follows a recent AHLA survey, which found that many business travelers are canceling, reducing and postponing trips amid rising COVID-19 cases. Business travel is the hotel industry’s largest source of revenue and has been slow to return since the onset of the pandemic. Business travel includes corporate, group, government and other commercial categories. Business travel revenue is not expected to reach prepandemic levels until 2024.
AHLA: Rising COVID cases cause leisure travel nose-dive
The lack of business travel and events has major repercussions for employment. Hotels are expected to end 2021 down nearly 500,000 jobs compared to 2019, according to the report. 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—meaning an additional nearly 1.3 million hotel-supported jobs are also at risk.
Many urban markets, which rely heavily on business from events and group meetings, continue to face a severe financial crisis, as they have been disproportionately impacted by the pandemic. The 10 markets projected to end 2021 with the largest declines in hotel business travel revenue are:
The 10 states projected to end 2021 with the largest declines in hotel business travel revenue are:
“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 the AHLA. “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.”
International Travel
At the same time, research conducted by the World Travel & Tourism Council on inbound international travel spend found that the United States economy faces a daily potential loss of nearly $198 million should current border restrictions remain.
Based on 2019 levels, of the top 20 most important markets in terms of inbound spending, fewer than half are currently granted access to the U.S., severely impacting the recovery of the country’s travel and tourism sector, according to the WTTC. Data is based on the inbound spending to the U.S. by countries that are still closed off to travel as listed by the Centers for Disease Control and Prevention.
The U.S. remains closed to many of the largest contributors to the U.S. economy in terms of visitor spending in 2019, before the pandemic struck, including the U.K. (8 percent), Germany (4 percent), France (3 percent), and Italy (2 percent).
From these figures, the U.S. economy continues to endure substantial financial hardship due to current inbound travel protocols, with monthly potential losses of more than $1.2 billion, amounting to approximately $283 million per week or $40 million each day, from the U.K. market alone, the report showed.
According to the WTTC, the U.S. currently holds the position as the largest global travel and tourism market but the country runs the risk of falling in ranking should a clear roadmap on re-engaging with international leisure and business travelers not occur at the start of the fall season. Consistency in domestic travel alone will not achieve full economic recovery for the country, the report stated.
The WTTC’s "2020 Economic Impact Report" found that travel and tourism supported more than 16.5 million jobs (10.5 percent of total U.S. employment) in 2019. With business travel to the U.S. accounting for $358 billion in 2019 (30 percent of total spend), financial growth cannot occur with current mobility to the country cut-off.
The travel and tourism industry’s contribution to the U.S. gross domestic prodcut dropped from $1.87 trillion in 2019 to $1.1 trillion in 2020, and the WTTC warned that the country’s ability to regain profits lost and remain the top global contributor to travel and tourism is at stake without “drastic strides” toward a safe reopening to additional countries around the globe.