The recovery from the COVID pandemic is expected to heat up in 2022, according to American Hotel & Lodging Association’s 2022 State of the Hotel Industry Report. However, much of those gains for hotels will still be coming from the leisure segment, while revenues from meetings and events will continue to lag.
The good news: Demand, revenues and occupancy all should get back to some semblance of pre-pandemic normal for hotel recovery. After plummeting room revenues to the tune of $111.8 billion over the past two years, hotel room night demand is projected to come close to a return to 2019 levels in 2022.
The bad news: Meetings are lagging. While Omicron is beginning to wane in the U.S., at least in some areas, uncertainty about how Omicron, and any new variants that could arise, are keeping meeting planners on tender hooks. Only 58 percent of the 2019 level of meetings and events are expected to come back in 2022 — and that percentage could drop if Omicron does not subside as expected or a new variant comes into play. Also complicating the meetings and events comeback story are the continuing, and continually changing, travel restrictions, especially for international travelers, as well as corporate travel policies that are still in flux. Next year is looking a bit brighter, with almost 87 percent of meetings and events returning in 2023.
Business travel will be back, but there may be a few twists for hotels. With a full recovery in business travel still two years off, according to an analysis by Kalibri Labs, it will increase globally by 14 percent this year, with the U.S. and China each expected to see gains in the 30 percent range in 2022. We also may continue to see a rise in bleisure travel — the increase in travelers who add a personal stay onto a business trip has been a pandemic silver lining for many hoteliers. One study quoted in the AHLA report found 89 percent of global business travelers wanting to add a holiday to their business trips over the next 12 months.