Hotel and Resort Industry Poised for 2023 Success
New data shows that the hotel industry is projected to surpass pre-pandemic levels of demand, nominal room revenue and state and local tax revenue in 2023.
According to the American Hotel & Lodging Association’s (AHLA) State of the Hotel Industry Report, the travel sector will inch closer to other key 2019 performance metrics, but operational challenges, including staffing shortages and economic factors, will replace COVID as the top concern for hotel and resort owners.
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).
Hotels are also expected to generate $46.71 billion in state and local tax revenue in 2023, up from $41.11 billion in 2019. In addition, average hotel occupancy is expected to reach 63.8 percent in 2023, just shy of 2019’s 65.9 percent.
“Three years after the unprecedented hardships our industry faced due to the pandemic, hotels continue to make significant strides toward recovery,” AHLA President Chip Rogers said. “2022 saw one of the strongest summer travel seasons ever, and this year we expect hotels to reach new heights in terms of room revenue, room-night demand and state and local tax revenue.”
“But when inflation is taken into account, our industry likely won’t see full recovery for several more years,” Rogers continued. “Nevertheless, hotel performance is trending in the right direction – great news for our industry and our employees, who are enjoying better pay, more career opportunities, upward mobility and flexibility than ever before.”
As for some of the challenges hotels and resorts face this year, staffing is expected to remain an issue for U.S. hotels, with properties projected to employ 2.09 million people in 2023, down from 2.35 million in 2019.
Inflation for several hospitality-related products will continue to run five percent to upwards of 10 percent for the next few quarters, while group business has a bright future, with 70 percent of respondents either booking or actively sourcing new events.