Hotels across the country are still struggling with the impact of COVID-19, mainly because the number of people traveling for business has dropped so dramatically. And in the Minneapolis/Twin Cities market? A new report says that the struggles hotels have faced here are even greater than those faced by the hospitality industry in other parts of the country.
According to a report from the American Hotel & Lodging Association, of the top 25 hotel markets across the United States, Minneapolis ranks among the top-10 worst-distressed. Revenue-per-available-room, a key indicator of a hotel market’s financial strength, is down 51 percent today in the Minneapolis market when compared to 2019 levels, according to the lodging association.
Overall, the numbers from the American Hotel & Lodging Association show that 21 of the top 25 U.S. hotel markets remain in a depression or recession. Urban markets, such as the Twin Cities, are especially struggling. The lodging association says that urban-market hotels remain in what it terms a “depression” cycle, while the overall U.S. hotel industry is in a “recession” cycle.
The numbers for the Minneapolis hotel market tell the story. According to the lodging association, the market’s revenue-per-available room, better known as RevPAR, stood at $40 in May of 2021. In May of 2019, this figure was a far healthier $81.
For the U.S. hotel industry overall, RevPAR stood at $69 in May of 2021. That’s down from $91 in May of 2019, a dip of 22 percent.
San Francisco has seen the biggest drop in RevPAR in the United States. RevPAR has fallen from $203 in May of 2019 to $62 in May of this year, a drop of 70 percent. And in the Midwest’s biggest city, the numbers are grim, too. In Chicago, RevPAR hit $52 in May of this year. That’s down 59 percent from May of 2019’s figure of $126.
Leisure travel has been a bright spot lately. The American Hotel & Lodging Association says that people are again traveling for vacations, and that the summer has seen a strong increase in leisure travel. The problem is that business and group travel, which has long been the hospitality industry’s largest source of revenue, will take significantly longer to recover from the COVID-19 pandemic.
The association says that business travel is not expected to return to 2019 levels until 2023 or 2024. Major events, conventions and business meetings have already been canceled or postponed until at least 2022. Again, it has been Urban hotels that have been hit the hardest by a lack of business travel. The lodging association says that RevPAR was down 52 percent in May of 2021 compared to May of 2019.
To help the industry survive these difficult times, the American Hotel & Lodging Association and UNITE HERE, a hospitality workers’ union serving North America, have joined forces to lobby Congress to pass the bipartisan Save Hotel Jobs Act introduced by Sen. Brian Schatz (D-Hawaii) and Rep. Charlie Crist (D-Fla.). This legislation would provide financial assistance to hotel workers.