The world-renowned hotel and tourism industry in New York has a steep climb ahead of it to return to its pre-pandemic glory days – with hotel business travel revenues this year in the Big Apple market expected to be 55% lower than 2019, a sobering new industry analysis revealed.
According to the report by the American Hotel & Lodging Association and Kalibri Labs, U.S. hotel business travel revenue is projected to be 23% below pre-pandemic levels in 2022 and down the year by more than $20 billion from 2019.
These projections come after hotels lost an estimated $108 billion in combined business travel revenue in 2020 and 2021.
But New York’s hotel business travel industry is suffering the most of any market in the country — except for San Francisco, where hotel business travel is expected to be 68% lower than 2019, the report said.
Other urban hotel tourism markets still suffering from the COVID-19 blues are Washington, DC, where business is expected to be down 54%, Chicago down 49%, Boston down 47% and New Orleans down 32% from 2019 levels will.
The overall business travel market for hotels in New York State is also lagging, with revenue expected to be 46% below 2019.
Only San Francisco, where hotel business travel is projected to be down 68% from 2019, is expected to suffer more than New York City.John Lamparski/Getty Images
That’s the second-worst recovery of any state except Wyoming, where revenue will be 63% below 2019, according to the survey.
“While declining COVID-19 case counts and relaxed CDC guidelines provide optimism for the revival of travel, this report underscores how difficult it will be for many hotels and hotel workers to recover from years of revenue shortfalls,” said President Chip Rogers and CEO by AHLA.
“The good news is that after two years of virtual working arrangements, Americans are realizing the unmatched value of face-to-face meetings and say they are ready to go back to business travel.”
The projections come after hotels lost an estimated $108 billion in combined business travel revenue in 2020 and 2021. AHLA / Kalibri Labs
The COVID outbreaks in 2020 and 2021 led to closures and disruptions to travel, and the ongoing upheaval and slow recovery could drain billions of dollars in revenue from city coffers, which help fund public services like police and schools.
New York City welcomed a record 66.6 million visitors in 2019 for its museums, nightlife and theatres, restaurants, trade fairs and sporting events such as the marathon and the US Open tennis tournament.
However, that number dropped 67% to 22.3 million visitors during the COVID-19 outbreak the following year, according to the State Audit Office.
Only three cities in the report should report a positive tourism rate compared to 2019.AHLA / Kalibri Labs
Tourism-related tax revenues accounted for 59% of the $2 billion drop in the city’s tax revenues in the first year of the pandemic, falling about $1.2 billion.
“We estimate that the hotel-related occupancy and sales taxes the city missed was approximately $920 million in 2020 and $560 million in 2021,” said Vijay Dandapani, president and CEO of New York City Hotels Association, to The Post.
The number of permanent hotel industry employees fell by 20,000 from 55,000 to 35,000, he said.
“Many of these are good union-paying jobs,” Dandapani said.
In 2019, New York City saw a record-breaking 66.6 million visitors. Corbis via Getty Images
Before the pandemic, tourism accounted for 7.2% of total private sector employment in the Big Apple and 4.5% of private sector wages. According to the Court of Auditors, tourism indirectly supported 376,800 jobs in 2019.
Dandapani of the New York City Hotel Association confirmed that both occupancy and per-room rates are still well below pre-pandemic levels.
“New York City hotel jobs are still over 30% below 2019 levels, largely because both occupancy and rates have not recovered,” Dandapani said.
In January, Gov. Kathy Hochul’s budget forecast projected that New York’s hotel and hospitality industry is unlikely to recoup all of the job losses from the pandemic by 2026. ANGELA WEISS/AFP via Getty Images
“The main reasons are the lack of revival of business travel, where the average rate is almost twice that of a longer-stay tourist guest,” he said.
But Dandapani complained that the government was part of the problem, not the solution.
“Another reason is the federal government’s continued insistence on 24-hour COVID testing (despite mandatory vaccination) for everyone entering the United States, which is a major drag on foreign business and tourist travel,” he said.
Tourism tax revenues accounted for 59% of the city’s $2 billion drop in tax revenues in the first year of the pandemic. ANGELA WEISS/AFP via Getty Images
Gov. Kathy Hochul’s budget forecast, released in January, warned that New York’s hotel and hospitality industry is unlikely to recoup all of the job losses from the pandemic by 2026.
Last fall, Hochul channeled part of her $450 million tourism revitalization program for New York into expanding employment at the city’s 300 hotels — which employed about 50,000 workers before the pandemic.
The plan included a $100 million tourism workers recovery fund that would provide a one-time payment of $2,750 to up to 36,000 hotel workers and other tourism workers who were eligible for expired unemployment benefits.
Another $100 million aims to spur hotels and other tourism-dependent businesses that have suffered job and revenue losses to reinstate employees by offering $5,000 in grants to help every full-time worker who works on the payroll is coming, and subsidize $2,500 for part-time workers.