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Urban hotels hit hard by pandemic, recovery will take years

Urban hotels hit hard by pandemic, recovery will take years
Urban hotels hit hard by pandemic, recovery will take years
Written by Harry Johnson

Leisure and hospitality has lost 2.8 million jobs during the pandemic that have yet to return, and the unemployment rate in the accommodation sector remains 225% higher than the rest of the economy.

  • Hotels are the only segment of the hospitality and leisure industry¬†yet to receive direct aid¬†despite being among the¬†hardest hit
  • Only 29% of Americans would consider traveling to a city or urban destination this summer
  • Economic devastation facing urban markets,¬†which rely heavily on business from events and group meetings

A national survey commissioned by the American Hotel & Lodging Association (AHLA) found that only 29% of Americans would consider traveling to a city or urban destination this summer, further showing the economic devastation facing urban markets, which rely heavily on business from events and group meetings, underscoring the need for targeted relief from US Congress.

Urban hotels ended January down 66% in room revenue compared to last year, which does not include the lost revenue from groups, meetings and food and beverage that is a main driver for business in these markets. For example, New York City has seen one-third of its hotel rooms (42,030 rooms) wiped out by the COVID-19 pandemic, with nearly 200 hotels permanently closing in the city.

Hotels are the only segment of the hospitality and leisure industry yet to receive direct aid despite being among the hardest hit. That’s why AHLA and UNITE HERE, the largest hospitality workers’ union in North America, joined forces to call on Congress to pass the Save Hotel Jobs Act introduced by Senator Schatz (D-Hawaii) and Rep. Charlie Crist (D-Fla.). This legislation provides a lifeline to hotel workers, providing the assistance they need to survive until travel returns to pre-pandemic levels.

The survey of 2,200 adults was conducted by Morning Consult on behalf of AHLA. Key findings include:

  • Only 29%¬†of respondents are likely to travel to a city or urban destination this summer, and¬†71%¬†state they would not travel to an urban market.
  • 75%¬†are uninterested in traveling to a U.S. city or metropolitan area to avoid dealing with pre-travel or post-travel quarantine and testing guidelines.
  • 73%¬†are uninterested in traveling to a U.S. city or metropolitan area due to lack of interest in traveling generally.
  • 72%¬†are uninterested in a vacation or leisure trip to a U.S. city or metropolitan area despite lower prices due to fewer people traveling.

‚ÄúHotels and hotel employees in urban markets are among those most impacted by the dramatic decline in travel over the last year,‚ÄĚ said¬†Chip Rogers, president and CEO of AHLA.¬†‚ÄúCOVID-19 has wiped out 10 years of hotel job growth.¬†While many other hard-hit industries have received targeted federal relief, the hotel industry has not.¬†We need Congress to pass the Save Hotel Jobs Act so hotels in the hardest hit regions can rebound when business and group travel begin to resume once again.‚ÄĚ

According to the same survey, more than seven in 10 Americans (71%) support the government providing targeted economic relief to the hotel industry as called for in the Save Hotel Jobs Act, with support being even higher among Democrats at 79%.

Hotels in urban markets have been disproportionally impacted by the pandemic. While leisure travel will start returning this year as more people are vaccinated, business and group travel, the industry’s largest source of revenue, will take significantly longer to recover. Business travel remains nearly nonexistent and is not expected to return to 2019 levels until at least 2023 or 2024. Business travel is down 85% from pre-pandemic levels and not expected to begin to slowly return until a COVID-19 vaccine is widely available in the second half of the year. Major events, conventions and business meetings have also already been canceled or postponed until at least 2022. 

Leisure and hospitality has lost 2.8 million jobs during the pandemic that have yet to return, and the unemployment rate in the accommodation sector remains 225% higher than the rest of the economy. Leisure and hospitality unemployment represents more than 25% of all unemployed persons in the United States, according to the Bureau of Labor Statistics.