According to a new report released today by the American Hotel & Lodging Association (AHLA), US hotel business travel revenue is projected to be 23% below pre-pandemic levels in 2022, ending the year down more than $20 billion compared to 2019.
This comes after hotels lost an estimated $108 billion in business travel revenue during 2020 and 2021 combined.
While leisure travel is expected to return to pre-pandemic levels this year, business travel—which includes corporate, group, government, and other commercial categories—is the hotel industry’s largest source of revenue and will take significantly longer to recover.
While dwindling COVID-19 case counts and relaxed CDC guidelines are providing a sense of optimism for reigniting travel, this report underscores how tough it will be for many hotels and hotel employees to recover from years of lost revenue.
The good news is that after two years of virtual work arrangements, Americans recognize the unmatched value of face-to-face meetings and say they are ready to start getting back on the road for business travel.
Many urban markets, which rely heavily on business from events and group meetings, have been disproportionately impacted by the pandemic. The 10 markets projected to end 2022 with the largest percentage declines in hotel business travel revenue are:
- San Francisco, CA
- New York, NY
- Washington, DC
- San Jose, CA
- Chicago, IL
- Boston, MA
- Oakland, CA
- Seattle, WA
- Minneapolis, MN
- Philadelphia, PA
The 10 states or districts projected to end 2022 with the largest percentage declines in hotel business travel revenue are:
- New York
- New Jersey
The new report comes on the heels of a recent AHLA survey, which found 64% of employed Americans and 77% of business travelers agree that it is more important than ever to bring back business travel. The survey also found that 80% of employed Americans and 86% of business travelers say face-to-face interactions are important for maximizing company success.
The shifting sentiments around business travel are supported by a recent analysis conducted by the San Diego State University School of Hospitality & Tourism Management on behalf of AHLA that found in-person business travel and meetings have undeniable advantages over virtual options, and that businesses and organizations that resume business travel and meetings more quickly are likely to have a competitive edge over those that do not.