May 2022

Uncertain Future of Business Travel a Risk for Higher-End Lodging

This publication is a part of:

Collection: On Point

Abstract

The pandemic caused a massive pullback in travel and plunged the hotel industry into a deep recession. At the onset of the pandemic, when stay-at-home orders forced travelers to cancel travel plans, air travel, one of the drivers of hotel occupancy, plummeted. Hotel occupancy slowly returned in tandem with air travel, but both remained depressed through all of 2020. Air travel only saw significant recovery once vaccines became widely available during the spring of 2021. Despite these gains, compared with 2019 pre-pandemic periods, air travel was down 9 percent as of late April 2022, while overall hotel occupancy was down 5 percentage points as of February 2022. While leisure travel has nearly recovered, weak business travel is holding back a full recovery as virtual meetings have become commonplace. The uncertain future of in-person business travel may continue to weigh on higher-end hotels catering to business travelers.

Author

Eric Reinauer