Philadelphia hotels' long road to economic recovery
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Hotels are signaling that they're bouncing back from a dismal 2020, but it'll likely take at least another year before the industry regains what it lost.
Why it matters: Philadelphia hotel occupancy and revenues are still down nearly 50% compared to pre-pandemic levels, according to hotel market data from STR.
- The data paints a long path to recovery for one of Philly's shakiest sectors.
Driving the news: Mayor Jim Kenney joined Visit Philadelphia, the Philadelphia Convention and Visitors Bureau and the Greater Philadelphia Hotel Association to give an update on Center City hotels this week.
By the numbers: Hotels in Center City reported a collective 40.8% occupancy rate in 2021. Their daily rate rose 16.2% in 2021 compared to 2020.
- Meanwhile, 2 million rooms were sold in 2021, up 71.6% compared to 2020.
Yes, but: 2021's improvements are still a massive decrease compared to 2019.
- Despite a 4.5% increase in hotel room supply, the overall demand for Center City hotels dropped 44.2% compared to 2019. Occupancy was also down 46.6% compared to pre-pandemic levels.
- Center City hotels overall generated 49.7% less revenue compared to 2019.
Of note: Hotel tax revenue, typically an indicator of the overall health of the industry, looks promising.
- In the third quarter of 2021, tax collections hit $12.8 million. That's a significant increase compared to the $2.7 million in the second quarter of 2020, when the pandemic hit.
- Combined collections in October and November 2021 totaled $10.2 million, as conventions and trade shows started popping up again.
Between the lines: The current COVID-19 wave, primarily driven by the Omicron variant, seems to have peaked, giving business leaders another hopeful sign for the future.
What they're saying: If Omicron is the last surge, Ed Grose, executive director of the Greater Philadelphia Hotel Association, told Axios he's confident the industry will rebound like the data suggests.
- But he cautioned that "it all depends on COVID-19 case numbers."
What to watch: "We need the office workers to come back to Center City," Grose said. "Weekend business is doing well because of leisure travel but on Sunday through Thursday … we need help."