HOTEL INDUSTRY SUFFERING FROM COVID WARS

About a billion room-nights will be booked in U.S. hotels this year, data service STR reported, a respectable gain from 2020’s 829 million but still well below 2019’s record 1.3 billion.
Hidden in those larger numbers is a bit of bad news: business travel continues to decline, a trend we noted early in “Travel Succumbs to Virus” (3 Mar 2020).
Business bookings, on which many hotels depend to make a profit, will drop $59 billion below 2019’s total, more than the $49 billion lost from those customers in 2020, according to the American Hotel & Lodging Association (AHLA).
“It comes down to liability,” AHLA Chip Rogers explained to The Wall Street Journal.
Much of hotels’ business travel bookings are tied to conventions and meetings. Employers are concerned that they will be found liable if they send workers to events at which those employees catch the COVID virus.
Inns that gain much of their bookings through meetings are finding that such bookings often are made last-minute now, perhaps because people are unsure in advance whether they will attend.
Late bookings are “dreadful when it comes to events,” Sandi Robinson, sales director for the event-oriented Godfrey Hotel Chicago, told the WSJ.
“We end up having to turn down some events because we’re too short-staffed,” she said.
However, reservations in the category of “group demand,” which mixes business and pleasure travel, rose 5.7 percent during September’s last half, STR found.
Also, nightly rates for such bookings grew to $214, a COVID-era record last matched in February 2020.
That might not last.
About 68 percent of Americans are considering traveling in the near future, according to a late September poll by Destination Analysts, down from 78.7 percent who were planning or considering a trip in the group’s June survey.
Almost 27 percent of respondents postponed travel because of concerns regarding the Delta virus; more than 23 percent had canceled a trip for that reason.
Of those polled, two-thirds said they expect the COVID virus to be of concern for the next several years.
TREND FORECAST: Our readers know that it will be years before business travel industry recovers its pre-COVID War size, particularly as dozens of large corporations are permanently slashing their travel budgets, as noted in “Travel and Tourism: Crashing” (21 Jul 2020).
While leisure travel will return gradually over time, by fits and starts, the business travel on which many metro-area hotels depend to turn a profit will not.
As a result, the hotel and convention industry will shrink, permanently vaporizing tens of thousands of jobs and leaving hundreds of large properties up for sale or foreclosure.  And, as the markets tighten, the Bigs will grow bigger, eating up more market share as the heavily-in-debt and smalls go bust.

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