FRANKFORT, Ky. (KT) – The COVID-19 pandemic, while a boost for companies that provide remote meetings such as Zoom, Google Meet, Microsoft Teams and Skype, is leading to a huge loss in business travel for the nation’s hotels and motels, including here in Kentucky.
The hotel industry is projected to end 2021 down more than $59 billion in business travel revenue compared to 2019, according to a new report released Wednesday by the American Hotel & Lodging Association and Kalibri Labs. That comes after losing nearly $49 billion in business travel revenue in 2020, which was less since the pandemic did not really take hold until spring.
Business travel, which includes corporate, group, government and other commercial categories, is the hotel industry’s largest source of revenue and has been slow to return since the onset of the pandemic. It is not expected to reach pre-pandemic levels until 2024.
The new analysis comes on the heels of a recent AHLA survey, which found that U.S. 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, amid rising COVID-19 cases.
While nationwide business travel in 2021 is forecast to end up 66.2% lower than in pre-pandemic 2019, in Kentucky the statewide loss is estimated to be just over half, or 51.4%. In 2019, hotel revenue in the state was $774,795,012. In 2021 it will be $376,743,724. That translates to a drop of over $398 million.
In Louisville, the only Kentucky city listed in the study, the revenue is expected to decrease from $312,094,114 in 2019 to $100,363,061 in 2021, a loss of nearly $212 million, or 67.8%, much higher than the statewide percentage, and 1.6% higher than the nation as a whole.
Many urban markets like Louisville, which rely heavily on business from events and group meetings, continue to face a severe financial crisis, as they have been disproportionately impacted by the pandemic.
“While some industries have started rebounding from the pandemic, this report is a sobering reminder that hotels and hotel employees are still struggling,” said Chip Rogers, President and CEO of AHLA. “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.”
The AHLA describes COVID-19 as the worst economic event in the history of the U.S. hotel industry.