New Jersey’s hotels are expected to see $897 million less in revenue from business travel this year than in 2019, the last full year before the pandemic, according to a study by a national hotel trade group.
Hotels in the state are forecast to make $1.57 billion in 2022 from business travel — which includes hotel stays for corporate events such as conferences and trade shows — according to the report, released Wednesday by the American Hotel & Lodging Association.
That’s down 36.3% from 2019, when New Jersey’s hotels raked in $2.46 billion, according to the AHLA study, prepared by the leisure and hospitality analytics firm Kalibri Labs.
New Jersey’s projected hotel revenue losses put it in the 10 hardest-hit states in the country, according to the study.
The study did not project revenue for tourism, but it said leisure travel is expected to hit pre-pandemic levels nationally. The Garden State’s tourism industry leaders, however, were less optimistic about this summer at the Jersey Shore.
“We’re seeing some corporate travel coming back, but it’s not what it used to be. Mostly everything is still done via Zoom,” said Bhavesh Patel, an owner of ADM Hotels, which is in the midst of buying and selling several New Jersey hotels this year.
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The markets flanking New Jersey — Philadelphia and New York City, with their heavy reliance on business travel — are not expected to fare much better in the months to come, according to the study.
New York City’s business travel revenue is expected to come in at $2.5 billion less than in 2019, a 55.3% hit. In Philadelphia, the city’s hotels could see a nearly $333 million drop in revenue, or 37.2% less than the year before the pandemic.
“While dwindling COVID-19 case counts and relaxed [Centers for Disease Control and Prevention] 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,” AHLA President and CEO Chip Rogers said in a statement.
Nationwide, hotel profits in 2022 from bookings for business events are expected to reach just 58.3% of their 2019 levels, and then in 2023 reach 86.9% of their 2019 levels, according to the AHLA study.
“It’s going to take a while for … the travel and tourism industry to come back from the pandemic,” said Joseph Simonetta, executive director of the New Jersey Tourism Industry Association. “Every time a new variant is talked about in the media, people are hesitant to go into hotels or venues, or anything in an enclosed space.”
Summer slump?
Despite surging interest in vacationing at the Jersey Shore last year, some experts believe that good fortune will run out in 2022.
Last year, more travelers opted for “drive-in destinations” amid their concerns about air travel and “pent up demand” coming out of a year of pandemic shutdowns and business closures, said Ben Rose, the marketing director for the Greater Wildwoods Tourism Improvement and Development Authority.
Bookings were up 74.8% in 2021 over 2020, according to the New Jersey Division of Travel and Tourism.
But looser restrictions on international travel and the recent decision by a federal judge to drop the airplane mask mandate could mean many tourists will have an appetite to travel abroad rather than to the Jersey Shore, said Patel, who also chairs the board of the New Jersey Restaurant & Hospitality Association, a trade group for both of the state’s industry sectors.
Less than half of American drivers — 42% — said they will go forward with their summer travel plans given soaring gas prices, according to a report by AAA, released in March as gas prices crept past $4 a gallon.
“People might look at their budget and say, ‘It might be better for us to finally get out, go and take a cruise, go to Mexico, go abroad to Europe,’ ” Patel said.
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https://www.northjersey.com/story/news/2022/04/22/nj-hotels-pre-covid-travel-study-says/7399319001/