US hotel industry slowly rebounding amid summer travel surge

Hotels in smaller, less-traveled markets and locations reportedly recovering fastest

With the U.S. travel industry on the rebound amidst the COVID-19 pandemic, customers are slowly returning to hotels

Matthias Tillmann, the chief financial officer of travel search website Trivago, said that the company was noticing more users were looking at hotels again. 

LEISURE TRAVEL IS REBOUNDING BUT HOTEL INDUSTRY HAS A LONG ROAD AHEAD, REPORT SAYS

"Last year, we saw a significant shift away from hotels to alternative accommodations," he told Barron's. "This year, with a pickup in volume, it has reversed a little bit, so the shift came down, but it’s still above 2019 levels. What we have seen so far this summer is that it’s between 2019 and 2020 levels."

Part of the reason for this shift is that hotels are more accessible, with more availability than vacation rentals on sites like Airbnb and the Expedia Group-owned Vrbo.

"As volumes come back, we have already seen in some destinations – and particularly in rural and nature destinations – that the alternative accommodations inventory is getting tight," Tillmann noted. "With more people looking for reservations, they have to go somewhere else. And on the supply side, only the hotels have the capacity to ramp up inventory quickly."

Ticker Security Last Change Change %
TRVG TRIVAGO N.V. 2.43 -0.09 -3.57%
HLT HILTON WORLDWIDE HOLDINGS, INC. 131.21 -0.81 -0.61%
WH WYNDHAM HOTELS & RESORTS 72.65 -1.18 -1.60%

Tillmann said he believes that while pricing will be a larger factor in where people travel, customers will return to hotels once again.

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The publication noted that a rebound was also seen in results from Wyndham Hotels & Resorts and Hilton Worldwide Holdings.

On Monday, hospitality industry news site Hospitality Net said that hotels in smaller and less-traveled markets and locations are recovering the fastest, due to the pandemic's impact on travel patterns and that travel had begun to rebound in the country's 25 largest hospitality markets.

Impacted by a summer surge, non-top 25 markets reported occupancy just three percentage points below the same figure in 2019, driving the average daily rate more than $6 above its pre-pandemic level.

A new American Hotel & Lodging Association (AHLA) report showed that leisure travel was on the road to recovery but is still far below pre-pandemic levels due to a lack of business travelers.

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As a result, AHLA projected that almost 500,000 direct hotel operations jobs lost during the pandemic won't return by year's end and room revenue will be down $44 billion this year compared to 2019. 

AHLA said that states and localities are projected to face a more than $20 billion loss in unrealized tax revenues from hotels over the past two years,

FOX Business' Daniella Genovese contributed to this report.