The Future for the Lodging Industry: When Will Convention and Group Demand Come Back?
Oct 22, 2020, 13:39 PM
The U.S. lodging industry is facing its largest decline in demand in history, but the industry is far from dead. Given the circumstances under which the industry has been challenged, and the solutions on the horizon for those challenges, the lodging industry may be out of the hole in a matter of three years.
Travel, especially the return of business travel, is a major factor in hotels’ recovery. When business travel resumes, we believe it will do so in full force. It may look different and potentially include additional family members such as working spouses or school-aged children completing virtual learning during the traditional workday, but group and business travel has not ended in the U.S.
Although many office-using professions are able to maintain productivity through heavy reliance on telecommunication, economic evidence for in-person interaction will drive post-COVID group hotel demand. From every $1 invested in business travel, firms realized $12.50 in incremental revenue. Additionally, Oxford Economics found that elimination of business travel reduces profits by 17% in the first year.
A more remote workforce will demand more opportunities to connect in person with colleagues, clients, and others in their network, and conferences and conventions are ripe to benefit from the increased demand. The desire for face-to-face communication and other humanistic features of traveling to interact with people will drive a strong recovery for business travel during the post-COVID-19 period.
We produced a ViewPoint report on the state of the hotel industry and the future of convention and group demand. To view the report, click the button below.