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U.S. hospitality sector: Some signs of life

There has been a definite increase in the number of people holidaying or travelling for other reasons


After facing a calamitous year in which many hotels were forced to shut down, the U.S. hospitality sector is now trying to find its foothold in a changed landscape.

Data from STR, CoStar’s hospitality analytics firm reveals the grim picture faced by the sector in 2020. While an average large-sized (200-plus beds) hotel lost $16.3 million in room revenue, demand for rooms fell by 80,300 units. On the other hand, damage inflicted on small (fewer than 75 rooms) and medium-sized hotels (75 to 299 rooms) was less severe. In both these categories, room revenue fell by ~$1 million, and demand in each category dipped by 5,000 rooms on an average last year.  These circumstances led to the closure of many hotels, particularly a big chunk – 38% – of the large ones. This, in turn, led to retrenchments on a large scale.

Current situation

A report from the American Hotel & Lodging Association (AHLA) reveals that even in a backdrop of a rapidly-normalizing economy, 21 of the top 25 US hotel markets are still in the grip of a recession. “While some industries are starting to rebound as COVID-19 restrictions ease across the country, the U.S. hotel industry is still in a recession, with the hardest-hit markets in a depression,” said Chip Rogers, president and CEO of AHLA, in a statement. “While many other hard-hit industries have received targeted federal relief, the hotel industry has not.”

Conference hotels badly hit

Owing to the temporary cessation or permanent closure of businesses during the pandemic, the blow has mainly been felt by convention or conference hotels. This segment accounted for 63% of the fall in room revenue. Conferences and meetings have either been called off or postponed till 2022 or beyond. 

Though there has been a definite increase in the number of people holidaying or travelling for other reasons now, largely owing to vaccine drives across the country and increased spending triggered by the government’s stimulus packages, it is clear that the U.S. hospitality sector will take time to completely normalize.

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