Business travel remains in recovery mode
Austin business travel is expected to remain stuck in recovery mode for years to come — and worries about cost coupled with COVID-19 variants could keep the industry in limbo even longer.
Why it matters: Conventions and lodging are significant driving forces behind the local economy, with millions of dollars flowing into city hotels, shops, restaurants and bars.
- Even SXSW, a massive money maker for the city and hotel industry, didn't return to full capacity this year.
Driving the news: Local hotels are expected to generate $243 million less from business travel this year compared to pre-pandemic levels, according to a new report from the American Hotel & Lodging Association.
- With the projected 28% decline, Austin ranks 16th among the top 50 hotel markets with the biggest deficits in 2022 in business travel revenue, the study found.
The big picture: Companies are reassessing and reprioritizing when and why employees travel, Axios' Joann Muller reports.
- Many corporate leaders want to maintain the financial savings they saw during the pandemic when employees worked remotely and corporate travel was rare.
- Meanwhile, business travel typically requires weekday trips, which have been more negatively impacted than weekend travel — largely driven by leisure travelers, according to Visit Austin.
Zoom in: Steve Genovesi, executive vice president of Visit Austin, told Axios that the tourism group has already seen promising signs of a business travel rebound in Q1.
- While weekday hotel occupancy citywide is off by 12%, he said: "We are cautiously optimistic the numbers will be better than what the report is predicting."
- Meanwhile, Q1 weekday downtown hotel demand level has improved 20% from 2021, to just over 60% occupancy.
During SXSW, which generally drives millions in tourism dollars, hotel occupancy levels were off by 11% compared to 2019.
- The average daily rate during the event dates was off by less than 3%, a promising sign, Genovesi added.
- "Incredible when you consider that 5,000 new hotel rooms have opened in the last 2 years," Genovesi said.
Between the lines: Boosting the city's office-bound workforce will be a key hurdle to clear before business travel bounces back completely.
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