Denver's business travel bounce-back hits new snags
Denver business travel is predicted to remain 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 Denver's economy, with millions of dollars flowing into city hotels, shops, restaurants and bars.
Driving the news: Denver hotels are expected to generate $343 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 31% decline, Denver ranks 14th among the top 50 hotel markets with the biggest deficits in business travel revenue in 2022, the study found.
- Hotel occupancy rates year-to-date are averaging about 58%. That's up from 40% in 2021, but still behind the roughly 74% seen in 2019, Lisa Martinez-Templeton, an economist in Denver's finance department, told city council members earlier this week.
Zoom out: Across Colorado, hotel profits from business travel are projected to be down $504 million this year, or about 22% compared to 2019, per the American Hotel & Lodging Association.
What's happening: 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.
Between the lines: Boosting the city's office-bound workforce will be a key hurdle to clear before business travel bounces back completely.
- "It's kind of hard to expect your employees to go and travel if they're not back in the office yet," Mark Vitner, a Charlotte, North Carolina-based senior economist for Wells Fargo, told the Denver Business Journal.
- "It's only when people can feel confident enough to be back at the office that people are going to restart conventions," he added.
The big picture: Corporate travel, the hotel industry's largest money maker, isn't expected to make a full comeback until at least 2024, the American Hotel & Lodging Association predicts.
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