Hoteliers Must Reinvest in Experiences To Make Up for Lost Time, Money
Activate Spaces, Partner With Community To Enliven Hotels - By By Kerry Ranson
Timed to coincide with this year’s meeting at the Americas Lodging Investment Summit in Los Angeles, the American Hotel & Lodging Association issued an interesting report on the state of the hotel industry.
While predicting that hotel room revenue will nearly return to 2019 levels — after falling by almost half in 2020 — the report further projected that ancillary spending will continue to lag behind.
Year by year, according to AHLA, hotel room revenue was $169.6 billion in 2019, $85.7 billion in 2020, and $141.6 billion in 2021. This means that over the past two years, hotels lost a collective $111.8 billion in room revenue alone compared to the preexisting norm. Room revenue is projected to reach $168.4 billion this year, or within one percentage point of 2019 levels. No projection was made for ancillary revenue from meetings, events and food and beverage, estimated at $48 billion annually before the pandemic, according to the report.
All things considered, and given that COVID-19 hasn’t yet disappeared, this projection seems remarkably rosy. However, we know that these numbers hide in many ways the real pain that our industry has experienced over many quarters, and that any recovery isn’t uniform. Just ask owners and operators of full-service, big-box hotels in many major cities, especially those dependent on major conventions and other events.
Being mindful of such issues — business and group travel and ancillary income — we must envision ways to prevent a recurrence of such lost revenue, which has put pressure on not only profitability, but ongoing investment in properties. At the same time, can we sustain the segments that have performed surprisingly well even during the pandemic?In a Changing World, No Time for Status Quo
In recent years, with younger generations perhaps kicking us in the rear a bit, our industry has rekindled or rediscovered the truth that the hotel stay must be an experience. Increasingly, guests want a clean, secure, inviting room and environment for starters. Breakfast wouldn’t hurt, but their stay with us should also be personable and memorable. Great idea. Undoubtedly, the advent of so much sharing on social media and in online hotel reviews has boosted this awakening. Everyone has a story to tell.
