Hotels are signaling they are recovering from a dismal 2020, but it will likely take at least another year before the industry recoups what it lost.
Why is this important: Philadelphia hotel occupancy and revenue are still down nearly 50% from pre-pandemic levels, according to hotel market data from STR.
Driving the news: Mayor Jim Kenney joined Visit Philadelphia, the Philadelphia Convention and Visitors Bureau and the Greater Philadelphia Hotel Association to provide an update on downtown hotels this week.
By the numbers: Downtown hotels recorded a collective occupancy rate of 40.8% in 2021. Their daily rate increased by 16.2% in 2021 compared to 2020.
- At the same time, 2 million rooms were sold in 2021, up 71.6% compared to 2020.
Yes, but: The 2021 improvements are still a massive decrease from 2019.
- Despite a 4.5% increase in hotel room supply, overall demand for downtown hotels fell 44.2% from 2019. Occupancy also fell by 46.6 % compared to pre-pandemic levels.
- Overall, downtown hotels generated 49.7% less revenue compared to 2019.
To note : Hotel tax revenue, usually an indicator of the overall health of the industry, looks promising.
- In the third quarter of 2021, tax revenue reached $12.8 million. That’s a significant increase from the $2.7 million in the second quarter of 2020, when the pandemic hit.
- The combined collections in October and November 2021 totaled $10.2 million, as conventions and trade shows started popping up again.
Between the lines: The current wave of COVID-19, driven primarily by the Omicron variant, appears to have peaked, giving business leaders another sign of hope for the future.
What they say : If Omicron is the latest push, Ed Grose, executive director of the Greater Philadelphia Hotel Association, told Axios he’s confident the industry will rebound as the data suggests.
- But he warned that “everything depends on the number of COVID-19 cases”.
What to watch: “We need office workers back in Center City,” Grose said. “Weekend business is good thanks to leisure travel, but Sunday through Thursday…we need some help.”