As the hospitality industry gathers in Los Angeles this week for the Americas Lodging Investment Summit (ALIS), it serves as a time at the start of the new year to take stock, tabulate gains and losses, and forecast performance and trading activity as best as one can considering continued market turbulence.
Among the reports released on Monday was the 2022 State of the Hospitality Industry Report from the American Hotel & Lodging Association (AHLA), which suggests the path ahead will be uneven and potentially volatile, and will take several more years for full recovery. 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.
Key findings of the report include:
- Hotel occupancy rates and room revenue expected to approach 2019 levels in 2022
- The outlook for ancillary revenue, which includes catering and meeting spaces, is less optimistic
- Hotels collectively lost US$111.8 billion in room revenue alone in 2020 and 2021
- Leisure travelers will continue to drive the recovery: in 2019, business travelers accounted for 52.5% of industry chamber turnover; in 2022, it should represent only 43.6%
- Business travel is expected to remain down more than 20% for much of the year, while only 58% of meetings and events are expected to return; the full effects of Omicron are not yet known
- Changing traveler segments, including the rapid increase in bleisure travelers – those who mix business and leisure travel – are impacting how hotels operate. In fact, a study of business travelers around the world found that 89% want to add private vacations to their business trips in the next 12 months.
“Travel and hospitality brands still face an uncertain market, but all of these changes also herald a new era of opportunity for building long-term customer loyalty. They need to adapt to demand and respond to the added complexities and volatility of travel by offering a ‘travel partner’ mentality to their leisure and business customers,” said Liselotte De Maar, Managing Director of the travel industry at Accenture. “Travelers are no longer focusing solely on the price and quality of a place, but also on cleanliness and sustainability values and impact, and expecting a clearer and more digital service. Businesses 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 are facing a significant labor shortage that could impact the recovery. The AHLA Foundation is launching a new national, multi-channel advertising campaign to help fill the hundreds of thousands of open jobs in the hospitality industry. The pandemic wiped out 10 years of job growth. This multi-year effort, “The Hospitality Industry: A Place to Stay,” aims to help job seekers discover more than 200 career paths. The ads will first run in Columbus, Dallas, Denver, Miami and Phoenix on Facebook, Google and YouTube, in English and Spanish.