PROVIDENCE – A new report has found that Rhode Island’s hotel industry is projected to end the year with $107.8 million less revenue from business travel than in 2019.
The report from the American Hotel & Lodging Association and Kalibri Labs, a hotel revenue predictor and evaluator, notes that the hotel industry is not expected to return to pre-pandemic levels until 2024. AHLA says business travel is the hotel industry’s largest source of revenue.
A national survey conducted by AHLA from August 11-12 revealed that business travelers are scaling back travel plans amid rising COVID-19 cases, with 67% planning to take fewer trips, 52% likely to cancel existing travel plans without rescheduling, and 60% planning to postpone existing travel plans.
Of the 2,200 adults who participated, 414, or 18%, were business travelers that either work in a job that includes work-related travel or who expect to travel for business at least once by the end of the year. Key findings among business travelers include the following:
• 67% are likely to take fewer trips, while 68% are likely to take shorter trips
• 52% say they are likely to cancel existing travel plans with no plans to reschedule
• 60% are likely to postpone existing travel plans until a later date
• 66% are likely to only travel to places they can drive to
The survey tested attitudes among 1,590 people (72% of respondents) who are likely to attend large gatherings, meetings, and events—all key drivers of hotel revenue. Findings among those respondents include:
• 71% are likely to attend fewer in-person events or gatherings
• 67% are likely to have shorter meetings or events
• 59% are likely to postpone existing meetings or events until a later date
• 49% say they are likely to cancel existing meetings or events with no plans to reschedule
Hotels are expected to end the year down nearly 500,000 jobs nationally in comparison to 2019, noted AHLA in their report. For every 10 people employed on a hotel property, the hotel industry supports an additional 26 jobs in the community, from restaurants and retail to supply companies, the report said. That means an additional 1.3 million hotel-supported jobs could be at risk as well.
Corporate travel is projected to remain at only 30% of 2019 levels through the end of 2021. The report notes that the lack of travel nationally could cost the hotel industry an estimated $59 billion in 2021, according to economists.
“It’s unsettling to see the significant impact the pandemic has had on the hotel industry in Rhode Island and across the nation,” Dale J. Venturini, CEO and president of the R.I. Hospitality Association said. “Hotels are important contributors to our economy, from job creation to the generation of valuable tax revenue and more.”
Venturini said that despite a brief period of recovery in 2021, it’s clear that the threat of the COVID-19 Delta variant has dampened the industry’s ability to bounce back fully.
“As has been the case for nearly two years now, we’re looking to our federal delegation to fight for the funding needed to help our business stay afloat and keep Rhode Islanders employed as we continue to work through this public health crisis,” he said.
Gov. Daniel J. McKee and Rhode Island’s General Assembly are looking at how to best apportion its receipt of the $1.1 billion in American Rescue Plan Act funding that was enacted in March.
Chip Rogers, CEO and president of AHLA said, “While some industries have started rebounding from the pandemic, this report is a sobering reminder that hotels and hotel employees are still struggling. Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline. Continued COVID-19 concerns among travelers will only exacerbate these challenges. That’s why it’s time for Congress to pass the bipartisan Save Hotel Jobs Act to help hotel employees and small business owners survive this crisis.”
U.S. Sen. Brian Schatz, D-Hawaii, introduced the legislation in April to aid the hotel industry and its workers. The act is aimed at providing grants and tax credits to help pay hotel employees, bring back laid-off workers, and ensure safe workplaces.
Cassius Shuman is a PBN staff writer. Contact him at Shuman@PBN.com. You may also follow him on Twitter @CassiusShuman.
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