DC hotels may get a lifeboat with ‘bleisure’ travelers after COVID-19 revenue losses

The D.C. hotel industry is still in a hole, and its slow 2021 recovery took a step back with the omicron variant. But “bleisure” travel — blended business and pleasure trips — could aid in the industry’s recovery.

Business travel, the most lucrative type of trip for hotels in the District, is expected to remain down significantly for the rest of 2022, according to a report from the American Hotel & Lodging Association. Even nationally, only 58% of meetings and events are expected to return this year. Business travel will make up 43.6% of room revenue this year, compared to 52.5% in 2019.

But that doesn’t mean travelers aren’t also doing business. The report notes the rise in “bleisure” travel — for example, a four-day weekend in which a traveler works remotely from their hotel rooms on Fridays and Mondays and plays tourist over the weekend.

D.C. hotels are adapting.

“What guests are telling us they want is no surprise,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association. “You’ve got to have a really strong internet connection, because people are doing so much work from their rooms.”

“The things that they normally would have wanted, such as the food buffets, are maybe not quite as important as they used to be. When you take a look at room service, that is almost nonexistent, because people use apps to order food now.”

While those brave enough to travel when hotels began reopening were rewarded with lower room rates, that’s no longer the case, even with lingering high room vacancies.

“Right now, rates are higher than they have been in quite some time,” Rogers said. “You can get into a hotel because the occupancy is lower than it normally is, but the rates aren’t going to be much lower.”

He added, “pent-up demand has actually driven prices a little bit higher for some leisure travel,”

But the report didn’t just provide hope for the D.C. hotel industry; it also highlighted its losses.

D.C. hotels lost more than $2.9 billion in room revenue in 2020 and 2021, and that meant a loss of almost $420 million in tax revenue, according to the report. Even two years into the pandemic, there is still a long way to go toward normal.

“While many major markets, especially those in the South, have recovered, D.C. has not recovered. In fact, revenue is still down a good 20%. Occupancy this same time last year was about 57%. It is below 50% right now,” Rogers said.

Though hotels have been bringing staff back after mass layoffs at the start of the pandemic, the area’s hotel industry still employs almost 9,000 fewer people than it did before the pandemic — down by about 52%.

Nationwide, the association says, hotels this spring and summer could see the biggest increase in leisure travel in a decade or more, and room revenue is projected to approach 2019 levels.

Hotels across the U.S. lost a collective $111.8 billion in room revenue during 2020 and 2021, and AHLA projects the hotel industry to end this year still down 166,000 workers. The American Hotel & Lodging Association new report, called “The Year of the New Traveler,” is online.

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Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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