Metro Atlanta hotels hurt by steep drop in business trips

Credit: Atlanta Journal-Constitution

Credit: Atlanta Journal-Constitution

Revenue down sharply 18 months into COVID-19 pandemic

Metro Atlanta hotel revenue from business travelers is projected to be down 71% this year compared with pre-pandemic levels, according to a national industry association.

More broadly, the Atlanta Convention & Visitors Bureau doesn’t expect to see a recovery to 2019 total hotel occupancy levels until late 2023, even though leisure travel has bounced back more quickly than work trips.

“The pandemic has had a particularly devastating effect on the hospitality industry,” said William Pate, president of the local bureau, in a written statement.

Hotels in metro Atlanta had $1.67 billion in business travel revenue in 2019, and are expected to bring in $491.4 million this year, the American Hotel & Lodging Association said in its latest forecast for cities across the country.

Statewide in Georgia, hotel business travel revenue is expected to be down 61%, from $2.61 billion in 2019 to $1.03 billion this year.

Nationally, the hotel industry is projected to see a 66% decline in business travel revenue compared with 2019, or $59.3 billion less, according to the industry group, which is pushing for Congress to pass federal relief funding. In 2020, the industry lost nearly $49 billion in business travel revenue compared with 2019.

Hotels in Atlanta — particularly those downtown and in other business districts — are harder hit than other areas because they have historically depended heavily on conventions and business travelers to fill rooms. Nationally, about 30% of traveler spending came from business travel in 2019, according to the U.S. Travel Association.

While some events have restarted, there are still far fewer large conventions, conferences and business meetings than before the pandemic. Many companies have delayed return-to-office plans, which also means offices are not open for clients and partners to visit.

Among the cities around the country with the largest business travel revenue declines are San Francisco, New York, Boston, Washington, D.C. and Chicago, according to the AHLA report.

An August survey by the national association found that 67% of U.S. business travelers planned to take fewer trips as COVID-19 cases rose, and 52% were likely to cancel travel plans.

Leisure travel had a stronger recovery over the summer. In Georgia, that drove more traffic to hotels in coastal areas, cabins in the North Georgia mountains and other tourist destinations.

Nationally, hospitality industry data firm STR in mid-August estimated that leisure demand at the end of 2021 would be 17% higher than in 2019. But hotel occupancy rates have fallen in recent weeks as the summer travel season ended and the delta variant spread.