Hotel occupancy is expected to reach 63.6% in 2024, up slightly from 2023, but still shy of the 65.8% average hotel occupancy before the pandemic.
Employment is up, but also still below pre-pandemic levels. But spending by guests will set a record this year, nearly 24% more than 2019.
Hotel guest behavior has changed and many of those changes are due to the pandemic experience.
A 2024 State of the Industry Report by the D.C.-based American Hotel & Lodging Association cites showed results from an Ecolab survey conducted on its behalf that found travelers rank guest room cleanliness, property cleanliness, and friendly staff as the most important factors.
Hotel guests are also less interested in room service, another shift brought about by the pandemic.
“Because so many Americans during the pandemic switched to using apps on their phones to deliver food, we are really seeing that as a difference in how food is being delivered to hotel guests,” said Chip Rogers, president and CEO of the association.
Hotels still have staffing shortages. Though lodging properties across the country are expected to hire 45,000 employees this year, the industry still employs 225,000 fewer people than the nearly 2.37 million it employed in 2019.
Hotels have raised wages and benefits to further fill the shortfall. The biggest demand for jobs are in rolls such as housekeeping and maintenance, but openings are certainly not confined to just entry level jobs.
“In 2020 and 2021, a lot of people left the industry and that created some gaps,” Rogers said. “Many of those people were in management positions. So if you were to start a job today at the entry level, you could work your way into management, in many cases, in less than a year.”
Hotels are actively promoting their job openings as paths to advancement. Hotel wages are at a record high, and the industry is projected to pay more than $123 billion in wages and compensation in 2024, $21 billion more than in 2019.
The industry should be able to support higher wages. Room revenue this year is projected to top 2019 levels by 17%.
Hotel occupancy in major destination metros like D.C. is dependent on business travel. While 47% of meeting planners in a separate American Hotel & Lodging Association survey said they had increased their travel budgets for 2024 and 40% planning to budget about the same as last year, business travel has still not returned to the levels seen before the pandemic brought in-person conventions and conferences to a standstill.
In D.C., remote work is hindering its recovery.
“With business travel, it is about getting people back to the office,” Rogers said. “The reality is if you’re going to take a business trip, you’re not going to meet somebody at their home. They need to be in an office. And Washington, D.C. has been slow in returning to the office.”
The share of office workers actually on-site remains around 50% in the D.C. region, hovering at about the same level for the past year. The American Hotel & Lodging Association is among the organizations that are actively lobbying the federal government to mandate more return-to-the-office policies, and is informally urging employers in the private sector in the D.C. area to do the same.
Hotels are major economic drivers. The 2024 AHLA forecast projects the industry will generate a record $54.4 billion in state and local taxes this year, half of that in lodging-specific taxes, and a record $29 billion in federal tax revenue.
Check out AHLA’s 2024 State of the Industry report.
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