Hotel Room Revenues Expected to Exceed 2019 Levels by End of This Year, Says AHLA
RevPAR not expected to surpass 2019 levels until 2025 when adjusted for inflation >>
by: Harvey Chipkin
Nominal hotel room revenue and state and local tax revenues from hotels are projected to exceed 2019 levels by the end of this year, according to the 2022 Midyear State of the Hotel Industry Report by the American Hotel & Lodging Association (AHLA). Hotel room revenue is projected to surpass $188 billion by the end of 2022, eclipsing 2019 figures on a nominal basis. When adjusted for inflation, however, revenue per available room (RevPAR) is not expected to surpass 2019 levels until 2025. Hotels are projected to generate nearly $43.9 billion in state and local tax revenues this year, up almost 7% from 2019 levels. The report is based on data and forecasts from Oxford Economics, Avendra and JLL, and survey research commissioned from Morning Consult. Key findings include:
• Hotel occupancy is expected to average 63.4% in 2022, approaching pre-pandemic levels. • Hotel room revenue is projected to reach $188 billion by the end of this year, surpassing 2019 levels on a nominal basis. • By the end of 2022, hotels are expected to employ 1.97 million people — 84% of their pre-pandemic workforce. • Hotels are projected to generate $43.8 billion in state and local tax revenues in 2022, up 6.6% from 2019. • 47% of business travelers have extended a business trip for leisure purposes in the past year, and 82% say they are interested in doing so in the future.
Chip Rogers, CEO, said that after a tremendously difficult two and a half years, things are steadily improving for the hotel industry and its employees. While these findings highlight the important role hotels play when it comes to creating jobs, spurring investment and generating tax revenue in communities across the country, he said, they also underscore the lingering challenges posed by one of the tightest labor markets in decades.