As the hotel industry gathers in Los Angeles this week for the Americas Lodging Investment Summit (ALIS), it serves as a moment early in the New Year to take stock, tabulate wins and losses, and forecast performance and transaction activity as best one can considering ongoing market turbulence.
Among the reports published on Monday was the American Hotel & Lodging Association’s (AHLA) 2022 State of the Hotel Industry Report, which suggests the path ahead will be uneven and potentially volatile, and predicts full recovery is still several years away. The report, which reveals shifts in consumer and business sentiment, was created in collaboration with Accenture and is based on data and forecasts from Oxford Economics and STR.
The top findings of the report include:
- Hotel occupancy rates and room revenue are projected to approach 2019 levels in 2022
- The outlook for ancillary revenue, which includes food & beverage and meeting space, is less optimistic
- Hotels lost a collective US$111.8 billion in room revenue alone during 2020 and 2021
- Leisure travelers will continue to drive recovery: in 2019, business travelers made up 52.5% of industry room revenue; in 2022, it is projected to represent just 43.6%
- Business travel is expected to remain down more than 20% for much of the year, while just 58% of meetings and events are expected to return; the full effects of Omicron are not yet known
- Changing traveler segments, including the rapid rise of bleisure travelers—those who blend business and leisure travel—are impacting how hotels operate. In fact, one study of global business travelers found 89% wanted to add a private holiday to their business trips in the next 12 months
“Travel and hospitality brands still face an uncertain marketplace, but all these changes also herald a new era of opportunity to drive long-term customer loyalty. They should flex with demand and respond to the added complexities and volatility in travel by delivering a ‘travel partner’ mentality to their leisure and business customers,” said Liselotte De Maar, managing director in Accenture’s travel industry. “Travelers are now not only focused on price and quality of a location, but also on cleanliness and sustainability values and impact, and expect a clearer, more digital service. Companies will need to continue to digitally transform, reinvent their loyalty model, as well as rethink the employee proposition, if they wish to thrive.”
Like other industries, hotels have been dealing with a major workforce shortage which could impact recovery. The AHLA Foundation is launching a new, national, multichannel ad campaign to help fill the hundreds of thousands of open jobs in the hotel industry. The pandemic wiped out 10 years of job growth. This multi-year effort, “The Hotel Industry: A Place to Stay,” aims to help job seekers discover the 200-plus career pathways. Ads will first run in Columbus, Dallas, Denver, Miami and Phoenix on Facebook, Google and YouTube, in both English and Spanish.