Pandemic recovery underscores hotels’ importance to local communities

The Economic Importance of the Hotel Industry in a Community

“…for every $100 that someone spends on a hotel, they spend about $222 on other items in and around that hotel during that trip. It’s an enormous economic incentive to get people to come to your city and stay in hotels.” – Chip Rogers, President & CEO, American Hotel & Lodging Association

This content is sponsored by AHLA.

Hotels are an economic engine and dedicated community partner in every city and town across the United States.

That was highlighted in a particularly dramatic way during the pandemic, as travel numbers decreased and jobs in the industry went away.

With summer travel booming and hotels on a hiring spree, hospitality leaders are highlighting the crucial economic and community support hotels provide in cities across the nation.

“Before the pandemic, a lot of people probably didn’t really appreciate the impact that a hotel had on their community,” said American Hotel & Lodging Association President & CEO Chip Rogers.

According to industry experts, one in 25 American jobs was tied to hotels before the pandemic broke out, with employees either working directly for a hotel or for a company that provided goods or services to a hotel.

“That’s an enormous impact on the American economy,” Rogers said. What’s more, the amount of tax revenue that comes from hotels is staggering.

Before the pandemic, the industry generated $186 billion in federal, state and local taxes each year.

“You have the obvious, which is a guest comes in and they pay for their room, and you look on the bill and you see the local hospitality occupancy taxes,” Rogers said. “There are also income taxes that are being paid by all the people who work there, income taxes from the business itself and property taxes.”

And people who stay in hotels play an important role in supporting local businesses.

Before COVID-19, hotel guests spent $278 billion each year on transportation, dining and shopping, among other activities.

“What it equates to is for every $100 that someone spends on a hotel, they spend about $222 on other items in and around that hotel during that trip,” Rogers said. “It’s an enormous economic incentive to get people to come to your city and stay in hotels.”

As travel ground to a halt during the pandemic, a lot of that money disappeared.

It was hotels in major cities that struggled the most, as a big part of their business includes the types of large in-person meetings and conventions that shut down in the wake of COVID-19.

“The people who service the thousands of guests who come in for big events had no work during most of the pandemic,” Rogers explained. “That’s where we saw most of the job loss and the biggest economic impact.”

Hotels hiring, investing in workforce to meet summer travel demand

The hotel industry is preparing for positive changes now that COVID-19 is beginning to release the yearslong stranglehold it had on travel.

People are ready to get out and see and do many of the things they missed during the pandemic. Demand for travel is soaring, and experts predict that we could see record-levels of leisure travel this summer.

To meet this surge in demand, hotels across the country are on a hiring spree and making unprecedented investments in their workforce as they seek to attract and retain employees and serve their guests.

“Everybody’s in a better place than they were early in the pandemic and people see a light at the end of the tunnel,” Rogers said. “I tell people all the time if you’ve ever thought about joining the industry, now’s the time because the pay is better than it’s ever been, the benefits are better than they’ve ever been, and the opportunity is better than it’s ever been.”

According to the U.S. Bureau of Labor Statistics, as of May 2022 employment in the broader leisure and hospitality sector was down 1.35 million jobs, or 7.9%, compared to February 2020. The fact that hotels are looking to hire back many of those workers – in one of tightest labor markets in recent history – is resulting in historic opportunities for hotel employees.

Nationwide, average hotel wages increased from $18.74 per hour before the pandemic to $22.05 per hour in March, an increase of nearly 18%. Over that same period, average wages of all U.S. occupations increased by just 11%.

Record pay rates are just one way hotels are attracting talent. The industry is also offering workers more flexibility and opportunities for promotion than ever before.

“You can start today and if you’re willing to work and educate yourself, you can be in a management-type role almost overnight,” Rogers said. “It happens rather quickly with very good pay and benefits.”

As travel ramps up and hotels across the nation seek to staff up, AHLA is showcasing the economic, community and employee benefits hotels provide in neighborhoods across the country.

The group has announced the relaunch of its Hospitality is Working campaign to highlight the hotel industry’s commitment to investing in its workforce, protecting employees and guests, and supporting local communities across the country. It includes television and digital advertising as well as AHLA events around the country alongside local hoteliers, economic development organizations and community groups.

Learn more at https://hospitalityisworking.com/.

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