Skip to main content

Will business travel spending return to the pre-pandemic level soon?

Image
By

Business travelers in an airport

The U.S. hotel industry reported the highest room rate in July 2022 on a nominal basis. According to the STR (Smith Travel Research) data, the key performance indicators for the industry include:

  • Occupancy: 69.9%
  • ADR (average daily rate): $159.08
  • RevPAR (revenue per available room): $110.73

 

Using June 2019 as a reference point, the industry reported a -5.4% percent change in occupancy, a +17.5 percent change in ADR, and a +11.2 percent change in RevPAR for the month. If inflation is ignored, the hotel industry had already recovered in ADR and RevPAR, exceeding the pre-pandemic level. This recovery is driven by the rate instead of occupancy. 

 

Yet, there is no real sense of recovery without the business travelers

 

AHLA projected that business travelers would make up 43.6% of the room revenues for the hotel industry in 2022, down from 52.5% in 2019. That is a $21 billion difference. Although there are more “bleisure” (business + leisure) travelers in the market, the industry still needs business travelers to support its recovery. 

 

When will business travelers come back? 

 

It depends on how you see the market. Earlier this year, corporate travel managers observed an upward trend in booking activities for business travel. They were optimistic about the outlook. Global business travel spending is projected to have a year-to-year increase of 34% in 2022 to $933 billion. Still, that is far from the $1.4+ trillion in business travel spending in 2019.

 

Others are not as positive about the market outlook. A more recent update suggested that business travel spending might not recover to the pre-pandemic level after all until 2026, two years later than the earlier projection. Such an adjustment was made after inflation, labor shortage, and geopolitical issues were put into consideration. 

 

When do you expect to see a comeback of business travel? How will business travel evolve from pre-pandemic to post-pandemic? 

 

References

 

Josephs, L. (2022, April 15). Business travel spending might not return to pre-pandemic level until 2026. CNBC News. Available via https://www.cnbc.com/2022/08/15/business-travel-spending-might-not-return-to-pre-covid-levels-until-2026.html

 

Kwok, L. (2022, May). Groups to have robust come back 2022. The Hospitality News Magazine, 2(4), p. 34. 

 

STR. (2022, August 19). STR: U.S. hotel performance for July 2022. STR.com. Available via https://str.com/press-release/str-us-hotel-performance-july-2022


Note: This viewpoint was also published in The Hospitality News Magazine; the picture was downloaded from Inc.com. 

 

Labels:

Comments

Post a Comment

Popular posts from this blog

Luxury vs. Millennials and Their Technology: The Ritz-Carlton (By Julia Shorr)

By
Embodying the finest luxury experience, The Ritz-Carlton Hotel Company, LLC has been established since 1983. In 1998, Marriott International purchased the brand offering it more opportunity for growth while being independently owned and operated. They are known for their enhanced service level as the motto states, “Ladies and Gentlemen serving Ladies and Gentlemen”. The luxury brand now carries 97 hotels and resorts internationally and is attempting to keep the aspects of luxury while keeping up with the trends of the technologically improving generations. The Varying Demographics of the Target Market The Ritz-Carlton’s typical target market includes: business executives, corporate, leisure travelers, typically middle-aged persons and elders, and families from the upper and upper-middle class section of society .   This infers a large range of types of travelers in which all are similar in that they are not opposed to spending extra for the luxurious ambiance. However, with
1 comment
Read more

Is It OK for Hotel Staff to Wear Piercings and Tattoos?

By
Time has changed. I see more and more college students wearing piercings and tattoos nowadays, but is it OK for hotel staff to wear piercings and tattoos? The answer is “no, no, no.” According a report at USAToday.com, customers across the board do not want to see any hotel workers with pierced eyebrow, pierced tongue, tattooed arm, or nose ring. Some may argue that tattooed and pierced workers may seem more acceptable in edgy boutique hotels as compared to the big franchised hotels, but the survey results did not find any differences among a variety of lodging products. Many respondents believe people who wear visible tattoos and piercings are taking a high risk of their professional lives. If you stay in a hotel, do you mind being served by tattooed and/or pierced staff? What if you are the one who makes the hiring decision? References: USAToday.com: http://tinyurl.com/linchikwok08042010 Picture was downloaded from http://tinyurl.com/linchikwok08042010P
7 comments
Read more

How Covid-19 will change the HR department? (by Vivian Tan)

By
With the current pandemic happening, many businesses are having a hard time. It is hard for them to maintain to pay all their employees, and many things have changed on how companies are running during Covid-19. Because of this virus, employees work from home and might lack the motivation to finish their tasks. Many businesses shut their doors infinitely and file for bankruptcy because it is hard to pay their employees, and there are not many businesses coming in. In the hospitality industry, the HR department must create policies and answer questions from the outbreak. It is also essential that they communicate with workers for any updates and make sure that it does not affect their daily operations.     When it comes to covid-19 concerns, the HR department should communicate with the employees for any updates on the virus, such as informing employees about policies, personal hygiene, posting signs around the workplace about symptoms of the virus, and wear masks. Also, asking employee
5 comments
Read more