Hotel Industry’s Top Strengths, Challenges Right Now
A new study highlighted the challenges and strengths of the hospitality industry as it continues to bounce back from the impact of the coronavirus pandemic.
According to STR’s Hospitality Industry Sentiment survey, labor-related issues and energy/utility costs are among the top challenges of global hotel and travel industry professionals.
Other industry challenges include consumer confidence, supply-chain issues, business and group travel being depressed, increased competition and the reduced number of international visitors.
Respondents also weighed in on strengths, noting that surging leisure demand and increased guest spending have driven success. Data highlighted other strengths, such as bleisure opportunities, the return of events and positive trends in business, group and domestic travel.
“Over a third of respondents noted ‘bleisure’ travel as a positive dynamic to their business,” STR research analyst Brannan Doyle said. “Other notable boosts included the chance to perform property renovations, lifts in hotel rooms rates and the possibility of travel price inflation easing in 2023.”
Last month, the American Hotel & Lodging Association (AHLA) released its State of the Hotel Industry Report, which found the travel sector will inch closer to other key 2019 performance metrics. Unfortunately, operational challenges, including staffing shortages and economic factors, will replace COVID as the top concern for hotel and resort owners.
“In addition to these challenges and strengths, a third of respondents expect to meet or surpass 2019 hotel occupancy levels in Q1, while 46 percent anticipate achieving that goal by the end of the year,” Doyle continued.
The study also found that nominal room revenue for 2023 is projected to reach new heights ($197.48 billion vs. $170.35 billion in 2019), while room-night demand is projected to surpass pre-pandemic levels (1.3 billion occupied room nights vs. 1.29 billion in 2019).
The American Hotel & Lodging Association (AHLA) and Oxford Economics also released new state-by-state projections, emphasizing that hotel-generated state and local tax revenue will exceed $45 billion nationally this year, reaching records across the states.
The nation’s hotel-generated tax revenue is predicted to increase 13.6 percent in 2023, with the top ten states with the highest gross increase from 2019 to this year being heavy hitters in the tourism industry (in order): Florida, California, Texas, Nevada, New York, Michigan, Massachusetts, New Jersey, Illinois and Maryland.