Hotel room revenue is projected to surpass $188 billion by the end of the year, eclipsing 2019 figures on a nominal basis. When adjusted for inflation, however, RevPAR is not expected to surpass 2019 levels until 2025. Hotels are projected to generate nearly $43.9 billion in state and local tax revenues this year, up almost 7% from 2019 levels.
The report includes updated forecasts and trends on hotel performance and investment and traveler sentiment. It is based on data and forecasts from Oxford Economics; AHLA Platinum Partners STR and Avendra; and Silver Partner JLL, and survey research commissioned from Morning Consult.
Key findings:
- Hotel occupancy is expected to average 63.4% this year, approaching pre-pandemic levels.
- Hotel room revenue is projected to reach $188 billion by the end of this year, surpassing 2019 levels on a nominal basis.
- By the end of the year, hotels are expected to employ 1.97 million people—84% of their pre-pandemic workforce.
- Hotels are projected to generate $43.8 billion in state and local tax revenues this year, up 6.6% from 2019.
- 47% of business travelers have extended a business trip for leisure purposes in the past year, and 82% say they are interested in doing so in the future.
“After a tremendously difficult two and a half years, things are steadily improving for the hotel industry and our employees,” said Chip Rogers, president/CEO, AHLA. “This progress is testament to the resilience and hard work of hoteliers and hotel associates, who are welcoming back guests in huge numbers this summer. While these findings highlight the important role hotels play when it comes to creating jobs, spurring investment and generating tax revenue in communities across the country, they also underscore the lingering challenges posed by one of the tightest labor markets in decades. That’s why both AHLA and the AHLA Foundation are focused on helping hoteliers fill open positions.”
Like many industries, hotels continue to face a major workforce shortage that could impact recovery. In 2019, U.S. hotels directly employed more than 2.3 million people, according to Oxford Economics. This report forecasts that hotels will end this year with 1.97 million employees, or 84% of pre-pandemic levels. The hotel industry is not expected to reach 2019 employment levels until at least 2024. According to an AHLA survey in May, 97% of hotels indicated they are experiencing a staffing shortage, 49% severely so. Survey respondents indicated they had hired an additional 23 employees per property in the last three months but were also trying to fill an additional 12 positions.
The AHLA Foundation’s new national ad campaign, “The Hotel Industry: A Place to Stay,” aims to help bridge the employment gap while introducing job seekers to the 200+ career pathways and many perks the hotel industry offers.
Tags: 2022 Midyear State of the Hotel Industry Report, AHLA Foundation, American Hotel & Lodging Association (AHLA), Avendra, Chip Rogers, JLL, Morning Consult, Oxford Economics, STR
