June 8, 2021

Advocacy Group Urges Targeted Financial Aid From Congress, Cites Uneven Hotel Recovery

Original story from   IPBS-RJC

Article origination IPBS-RJC
The hotel industry could take until the end of 2023 to return to pre-pandemic level demand. - Samantha Horton/IPB News

The hotel industry could take until the end of 2023 to return to pre-pandemic level demand.

Samantha Horton/IPB News

Hotels are seeing more demand as people take vacations, and more are expected over the summer. But the industry’s recovery is uneven and Indiana’s will likely take longer than other areas. A national hotel industry group is urging Congress to pass legislation that would give direct relief to hotel operators and workers needing the financial help to fill the gap while travel returns.

The increase in travel is welcome news for the industry, but many worry whether business travel will return when vacations wind down after Labor Day.

American Hotel and Lodging Association CEO Chip Rogers said states like Indiana will be slower to recover than other popular vacation destinations.

“If you're in a warm weather area where people like to vacation, you're probably doing a little bit better now,” said Rogers. “Indianapolis specifically being a wonderful city that has a lot of conventions, those type of cities are really struggling the most. Now, of course, with the NCAA Tournament being in Indiana, there was a nice little bump there.”

Rogers said for places that rely on conventions and business travel, it may be the end of 2023 before travel fully recovers to pre-pandemic levels.

“Our industry, about 60 percent of all revenue is generated by business meetings and conferences,” he said. “And so knowing that some of these large conventions – like the ones typically held in Indianapolis – usually are three to four years in the making and many of those were just canceled. So it's going to take a while before we get back to that.”

With most hotels considered small businesses, many need 55 percent to 60 percent occupancy each year to break even. 

Rogers said while people are starting to travel again, revenues remain low for owners.

“If you look at 2020, you had the industry lose more than half of all the revenue, $110 billion,” he said. “This year, the industry is expected to lose another $25 billion, even under much better circumstances.”

Rogers said while the Paycheck Protection Program has helped many hotels, there has yet to be any targeted assistance for the industry. Proposed legislation would provide payroll assistance and tax credits to hotels.

He said hotels have a ripple effect in local communities, with every one hotel job, there are 2.6 additional jobs created.

Contact reporter Samantha at shorton@wfyi.org or follow her on Twitter at @SamHorton5.

Support independent journalism today. You rely on WFYI to stay informed, and we depend on you to make our work possible. Donate to power our nonprofit reporting today. Give now.


Related News

Free election support hotline available to Indiana voters at 866-OUR-VOTE
2024 Election Coverage
Indianapolis City-County Councilor La Keisha Jackson is Indiana's newest state senator