The hotel industry will miss out on $20.6 billion in business travel-related revenue this year, another sign the group is still struggling with the effects of the coronavirus pandemic. But Las Vegas is better-positioned than every other major market.
The American Hotel & Lodging Association (AHLA) forecasts business travel will generate $60 billion in revenue for hoteliers this year, well off the $89.67 billion seen in 2019. Hotel operators lost an estimated $108 billion in sales in 2020 and 2021 due to the COVID-19 crisis.
Of the 50 markets for which AHLA offers up projections, just three — Las Vegas, Knoxville, Tenn., and San Bernardino, Calif. — are expected to increase business travel revenue this year. This year, the largest domestic casino center is on pace to generate $3.15 billion in meetings and business sales, a 17.7% increase from 2019. While cities including Chicago, Los Angeles, New York, and San Francisco are nowhere close to returning to pre-pandemic business travel levels.
While dwindling COVID-19 case counts and relaxed CDC guidelines are providing a sense of optimism for reigniting travel, this report underscores how tough it will be for many hotels and hotel employees to recover from years of lost revenue,” said AHLA CEO Chip Rogers in a statement.
More than some other cities, Las Vegas, offset convention and meeting weakness with solid leisure travel numbers. AHLA estimates leisure travel spending will return to pre-pandemic levels this year — a likely boon for Sin City — but business travel won’t fully recover until 2024.
Why It’s Important to Las Vegas
Before the pandemic, Las Vegas was one of the most visited US cities for conventions and meetings, and that status isn’t lost on gaming companies and investors.
While casual travelers keep occupancy rates high Thursday through Saturday, professionals are vital sources of dining, hotel, and gaming revenue on the Strip Sunday through Wednesday.
Convention attendance bouncing back is critical to the likes of Caesars, MGM, and others on the Strip. That’s because they control hundreds of thousands of square feet of meeting space that needs to be put to use. Plus, a new supply is coming online. For example, Circa Las Vegas is expected to roll out 35,000 square feet of convention space in downtown Las Vegas in September.
Consensus in the analyst community is that 2023 will mark a true rebound in Las Vegas’s meeting and convention business.
More Positive Business Travel Signs for Las Vegas
Other green shoots for the Las Vegas convention economy include business travelers’ desire to ditch computer meetings and get back on the road.
AHLA’s latest survey follows the group’s prior poll, “which found 64% of employed Americans and 77% of business travelers agree that it is more important than ever to bring back business travel. The survey also found that 80% of employed Americans and 86% of business travelers say face-to-face interactions are important for maximizing company success.”
Business travel is the hotel industry’s biggest revenue stream.
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