Closer to Normalcy? Hotel Rooms are Filling up Faster

Getting ever closer to normal. That’s happening today in the hospitality industry according to the Midyear State of the Industry Report from the American Hotel & Lodging Association.

According to the report, hotel room revenue and state and local tax revenues are expected to exceed 2019 — or pre-pandemic — levels by the end of 2022.

The lodging association predicts that hotel room revenue will exceed $188 billion by the end of 2022. That is higher than 2019 figures on a nominal basis. But the news isn’t all good: When adjusted for inflation, revneue per available room (RevPAR) is not expected to surpass 2019 levels until 2025.

The association also said that hotels are expected to generate nearly $43.9 billion in state and local tax revenues this year, up almost 7% when compared to 2019.

The association’s midyear report largely showcases an industry in recovery mode following the COVID-19 pandemic. The report says, for example, that hotel occupancy is expected to average 63.4% in 2022, which is close to pre-pandemic levels. And by the end of this year, hotels are expected to employ 1.97 million people, 84% of their pre-pandemic workforce.

“After a tremendously difficult two-and-a-half years, things are steadily improving for the hotel industry and our employees,” said American Hotel & Lodging Association president and chief executive officer Chip Rogers.

The news isn’t all good, though. Hotels are still struggling to hire enough workers. In 2019, U.S. hotels employed more than 2.3 million people, according to Oxford Economics. That’s far more than the 1.97 million employees the lodging association says that U.S. hotels will employ by the end of this year. The hotel industry is not expected to reach its 2019 level of employment until at least 2024.

According to a May survey from the lodging association, 97% of hotels said they are experiencing a staffing shortage, with 49% saying that their shortage was a severe one.