According to a new report released by the American Hotel & Lodging Association, U.S. hotel business travel revenue is projected to be 23% below pre-COVID-19-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.
The study was released by the AHLA and performed by Kalibri Labs.
While the loosening of COVID-related restrictions means leisure travel is expected to return to pre-pandemic levels this year, business travel, which is the hotel industry’s largest source of revenue, will take significantly longer to recover. Business travel includes corporate, group, government, and other commercial categories.
In Kentucky, business travel hotel revenue in 2022 is expected to be $772,758,897, according to the report. In 2019 it was $701,027,006, meaning this year will still be down $71,731,890, a loss of 9.3%, compared to three years ago.
“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,” said Chip Rogers, president and CEO of the AHLA. “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.
That includes Louisville, traditionally one of the top 50 business destinations in the country, which has seen a sharper percentage decrease than the state overall.
Although 2022 figures are not available, in 2021 Louisville business travel revenue was $100,363,061. Compared to $312,094,114 in 2019, that represented a drop of $211,731,053, or nearly 68%.
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 the 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 ore quickly are likely to have a competitive edge over those that do not.
American Hotel & Lodging Association