A new study commissioned by the American Hotel & Lodging Association shows the Indiana hotel industry will end the year down nearly $644 million in business travel revenue compared to 2019. The lodging sector has been crippled by the pandemic, with business travel being its largest source of revenue. The new analysis comes on the heels of a recent national survey by AHLA, which found that most business travelers are canceling, reducing, and postponing trips amid rising COVID-19 cases.
In an interview with Inside INdiana Business, Indiana Restaurant and Lodging Association Chief Executive Officer Patrick Tamm said hotel occupancy rates associated with business travel have been slow to return.
“We get back on Sunday nights and we’re at single digits, maybe in the teens. There’s just not business travel,” said Tamm. “Our ‘bread-n-butter travelers, when they come in for that Monday meeting, Mondays, Tuesdays Wednesdays, we’re just simply not seeing those folks.”
Tamm says business travel is key for all hotels, but particularly in central business districts. He says all of Indiana’s metro areas are facing the same plight.
“Not just downtown Indianapolis but downtown Fort Wayne, South Bend Evansville, all of those central business districts where key business occurs without people being in our traditional offices and spaces and traditional office meetings and sales calls,” said Tamm.
The trade association is not expecting a recovery in the business travel sector until 2024, which includes corporate, group and government entities. But even then, travel will not likely be at the same level as before the pandemic as the adoption and use of video calls remain constant. However, Tamm says that person-to-person connection is still necessary.
“You can’t get to know somebody or what their issues are or uncover issues on a factory floor or in a hospital setting via Zoom or a little screen on your laptop. It’s not the same as a human connection,” said Tamm.
The AHLA says without congressional action, the industry will end 2021 down approximately 500,000 jobs, even as leisure and convention travel, especially in Indianapolis, slowly recovers.
“People are very interested in doing going, taking leisure trips, which is fantastic,” said Tamm. “But we need people to also start getting back to business and getting back to offices and getting vaccinated as well.”
The AHLA is pushing for passage of the Save Hotel Jobs Act currently before Congress. The measure would provide relief for unemployed hotel workers in the form of direct payroll grants.
Additionally, properties that receive grants would be required to give laid-off workers recall rights, ensuring those who have lost their hotel jobs due to the pandemic are able to return to their roles.
Tamm says the measure would also help hotels that are using cash reserves to stay current with the debt load.
“Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline,” said Chip Rogers, AHLA president and CEO. “That’s why it’s time for Congress to pass the bipartisan Save Hotel Jobs Act to help hotel employees and small business owners survive this crisis.”
Indiana Restaurant and Lodging Association President Patrick Tamm said hotel occupancy rates associated with business travel have been slow to recover.