According to the American Hotel & Lodging Association’s 2023 State of the Hotel Industry Report, the hotel industry is anticipated to surpass pre-pandemic levels of demand, nominal room revenue, and state and local tax revenue while edging closer to other crucial 2019 performance indicators.
Based on research from Oxford Economics and in partnership with AHLA Platinum Partners STR, Avendra, Ecolab, Encore, and Oracle, the hotel industry report predicts that operational issues, including staffing shortages and economic factors, would overtake COVID as hotels’ top concerns.
Conclusions from the hotel industry report:
1 Nominal room income is anticipated to increase significantly in 2023 to $197.48 billion compared to $170.35 billion in 2019. The trendlines are promising even though the data has not been adjusted for inflation, and that real revenue recovery will probably take several more years.
2 Demand for room nights is anticipated to rise above pre-pandemic levels in 2023, with 1.3 billion occupied room nights versus 1.29 billion in 2019.
3 State and local tax revenue from hotels is anticipated to increase to $46.71 billion in 2023 from $41.11 billion in 2019.
4 In 2023, the average hotel occupancy is projected to be 63.8 per cent, just behind the 65.9 per cent of 2019.
5 With hotels forecast to employ 2.09 million employees in 2023, down from 2.35 million in 2019, staffing is expected to remain a key concern for U.S. hotels.
6 According to Avendra, inflation for several hospitality-related products will continue to range from 5 per cent to 10 per cent over the next quarters.
7 Encore claims that 70 per cent of planners questioned for the firm’s Fall 2022 Planner Pulse Report were either booking or actively seeking new events, and 61 per cent projected to have greater budgets in 2023, indicating a promising future for the group market.
“Three years after the unprecedented hardships our industry faced due to the pandemic, hotels continue to make significant strides toward recovery,” said AHLA President and CEO Chip Rogers. “2022 saw one of the strongest summer travel seasons ever, and this year we expect hotels to reach new heights in terms of room revenue, room-night demand, and state and local tax revenue. But when inflation is taken into account, our industry likely won’t see full recovery for several more years. Nevertheless, hotel performance is trending in the right direction—great news for our industry and our employees, who are enjoying better pay, more career opportunities, upward mobility, and flexibility than ever before.”
The AHLA Foundation’s “A Place to Stay” multi-channel advertising campaign is active in 14 cities, including Atlanta, Baltimore, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, Nashville, New York, Orlando, Phoenix, San Diego, and Tampa. Its goal is to assist hotels in filling open positions and increase awareness of the 200+ career pathways available in the hotel industry.
Additionally, the Workforce & Immigration Initiative was recently introduced by AHLA affiliate “Hospitality is Working.” The campaign aims to persuade Congress to find compromises to address the labor shortfall by bringing more immigrants into the American economy.
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