Hotels’ Recovery Continues, Workforce Challenges Remain

The American Hotel & Lodging Association (AHLA) has released its “2022 Midyear State of the Hotel Industry Report,” which reveals that the hotel industry continues to make strides toward recovery, with nominal hotel room revenue, and state and local tax revenues projected to surpass 2019 levels by the end of this year.

Hotel room revenue is projected to exceed $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 exceed 2019 levels until 2025.

The report shows that hotel occupancy is expected to average 63.4 percent 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; hotels are projected to generate $43.8 billion in state and local tax revenues this year, up 6.6 percent from 2019; and 47 percent of business travelers have extended a business trip for leisure purposes in the past year, while 82 percent say they are interested in doing so in the future.

“After a tremendously difficult two and a half years, things are steadily improving for the hotel industry and our employees. This progress is testament to the resilience and hard work of hoteliers and hotel associates, who are welcoming back guests in huge numbers this summer,” said Chip Rogers, AHLA president and CEO. “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, they also underscore the lingering challenges posed by one of the tightest labor markets in decades. That’s why both AHLA and the AHLA Foundation are focused on helping hoteliers fill open positions.”

Like many industries, hotels continue to face workforce shortage that could impact recovery. In 2019, U.S. hotels directly employed over 2.3 million people, according to Oxford Economics. This report forecasts that hotels will end 2022 with 1.97 million employees, or 84 percent of pre-pandemic levels. The hotel industry is not expected to reach 2019 employment levels until at least 2024. According to a May 2022 AHLA survey, 97 percent of hotels indicated they are experiencing a staffing shortage, 49 percent severely so. Survey respondents indicated they had hired an additional 23 employees per property in the past three months but were also trying to fill an additional 12 positions.

The AHLA Foundation’s new national ad campaign, “The Hotel Industry: A Place to Stay,” aims to help bridge the employment gap while introducing job seekers to over 200 career pathways and perks the hotel industry offers.

AHLA’s report includes updated forecasts and trends on hotel performance and investment and traveler sentiment. It is based on data and forecasts from Oxford Economics, AHLA Platinum Partners STR and Avendra and Silver Partner JLL, and survey research commissioned from Morning Consult.

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