Hotel revenue from business travelers in the city is projected to down significantly this year compare to what it was before the pandemic, a new study predicts.
The report from the American Hotel and Lodging Association estimates hotels in the Philadelphia will make roughly $562 million from business travelers in 2022 compared with approximately $895 million in 2019. That’s a drop of more than 37%.
The situation is a little bit better statewide. The study estimates Pennsylvania hotels will make about $1.5 billion in 2022, which is about 28% less than they made the year before the pandemic.
New Jersey’s statewide drop in revenue will likely be about the same as Philly’s, at 36%. That makes it the state with the sixth worst deficit in the country.
The Philly area has a worse outlook than the nation as a whole. The study says business travel revenue at hotels nationwide will be down 23% from 2019 this year, which comes out to a more than $20 billion loss.
But other large urban markets in the U.S. are faring much worse.
New York City and Washington, D.C., have both lost roughly 55% of their hotel business travel revenue since 2019, causing a $2.5 billion and $1.5 billion deficit in each city.
San Francisco hotels have lost almost 69% of their business travel revenue, which will leave the local economy with $1.7 billion less than it had in 2019.
“While dwindling COVID-19 case counts and relaxed CDC guidelines are providing a sense of optimism for reigniting travel, this report underscores how tough it will be for many hotels and hotel employees to recover from years of lost revenue,” said Chip Rogers, AHLA’s CEO.
The organization has a positive outlook. It conducted a survey which found that about three-fourths of business travelers are ready to get back to a pre-pandemic normal when it comes to overnight work trips.
But a study from Deloitte, one of the world’s largest corporate consulting firms, predicts only moderate growth in the sector.
It estimates that corporate travel spending will reach about one-third of 2019 levels by the middle of 2022 and 55% by the end of the year.
One Philadelphia institution that’s heavily impacted by business travel trends is the Pennsylvania Convention Center.
The center’s leadership predicted it will have 750,000 visitors this year, the Philadelphia Business Journal reports, which is 37% lower than the 1.2 million it recorded in 2019 but 25% higher than the 600,000 it had in 2021.
The outlook is more positive when it comes to hotel bookings specifically.
The travel destination expects visitors to book 350,000 nights at Philly hotels this year, which is more than three times the 94,000 it recorded in 2021.