Hotel industry recovering, but unevenly

The hotel industry will continue its recovery from 2020 this year, but unevenly, according to the American Hotel & Lodging Association’s 2022 State of the Hotel Industry Report.

“Hotels have faced enormous challenges over the past two years, and we are still a long way from full recovery. 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,” AHLA President and CEO Chip Rogers said in a statement.

The report projects that hotel occupancy rates and room revenue will approach 2019 levels this year. U.S hotel occupancy will average 63.4% for the year, slightly below the 2019 average of 66%. The projection for total room revenue is $168.4 billion, near the 2019 total of $169 billion. In 2020, hotel room revenue fell by almost 50% to $85.7 billion.

While those numbers in some Virginia regions like Hampton Roads and the Greater Richmond area are approaching 2019 levels, Northern Virginia is not, Virginia Restaurant, Lodging & Travel Association President Eric Terry said, as business travel remains down.

Business travel is likely to remain down more than 20% for much of 2022, and 58% of meetings and events are expected to return, according to the AHLA report.

“Bleisure” travelers — those who blend business and leisure travel — and digital nomads are emerging traveler segments. Fly-to-the-meeting and fly-back-from-the-meeting day trips might become a thing of the past, according to the report.

Digital nomads are people who have the flexibility to work from anywhere and decided to travel, and the number of them is expected to grow.

Hotels are expected to employ 2.19 million people — 93% of their 2019 employment levels. In 2020, hotels employed only 1.65 million people.

AHLA also expects to see increased uses of and upgrades to technology, like reservation systems that allow flexible check-in and check-out times and self-service devices.

AHLA created the report in collaboration with Irish Fortune Global 500 company Accenture LLP. It is based on data and forecasts from Oxford Economics and STR Inc., a CoStar Group division that provides market data on the U.S. hospitality industry.