Hotel Industry Recovering But Faces Bumpy Road

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.

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.”

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.

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.

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.

“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.

Source: Hotel industry recovering but faces bumpy road | Fox Business



The hospitality Industry & the impact of COVID-19

As the effects of COVID-19 spread across the entire world, the primary focus for governments and businesses is the safety of their people. Whilst this focus will continue, the implications for economic growth and corporate profits have to lead to a sharp sell-off in equity markets across the globe.

We are proud to see that our hospitality and leisure clients, being the first ones that experienced the extreme bad weather conditions, are moving quickly and remain focused to understand and quantify the operational and financial impact for their business. The impact is huge, and not yet predictable, on both revenue and supply chains.

Decisions being taken to shut down hotels, restaurants, theme parks, cinemas, not to mention the entire disruptive effect of the travel ecosystem, all have a significant impact on worldwide tourism. As a team, Operators and Investors are trying to mitigate the cash and working capital issues, and stay in close contact with their stakeholders.

We are proud to see that this sector shows its maturity level: in working together, showing their true hospitality commitments in helping out our society where they can. For example by making their venue available for hospital beds and hospital employees.

The situation we are in also brings new business models and opportunities, in defining for instance new delivery concepts, human capital sharing platforms, initiatives in promoting the “staycation or holistay concept” and the use of the less productive time to work on activities that were normally pushed forward like asset counts, security plans, defining standard operating procedures, social media plans etc.

The good news is that our colleagues in Asia already see a pick up in this sector, although only at the starting point. This gives hope for the sector at this stage in time. Stay positive, stay focused and stay alert on your financial situation.

More contents:

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: