NJ Hotel Industry Will Still End Year Down 36 Percent, Group Predicts

NEW JERSEY — New Jersey's hotel industry is experiencing an extremely slow recovery from the coronavirus pandemic, the American Hotel & Lodging Association said in a new report released this week.

Although many people have resumed traveling and staying in hotels again, occupancy is nowhere near where it was in 2019, said the group. And New York City is the second hardest hit hotel market in the nation, behind only San Francisco.

The modeling forecast also predicted New Jersey's hotel industry to be one of the worst hit states, citing the many hotels in the northern and central part of the state, and around Newark Airport. The group predicts that by the end of 2022, New Jersey's hotel industry is expected to experience a 36 percent drop in revenue compared to the end of 2019.

In New Jersey, the state's hotel industry made $2.4 billion in revenue in 2019. The industry is predicted to make $1.5 billion by the end of this year, a 36 percent revenue reduction.

The report blames the pandemic, forced business shutdowns and a worldwide pause in travel of the past two years for the revenue plummet.

While Zoom still remains extremely popular, this study done by San Diego State University School of Hospitality & Tourism Management found in-person business travel and meetings have undeniable advantages over virtual options, and that businesses and organizations that resume business travel and meetings more quickly are likely to have a competitive edge over those that do not.

The American Hotel & Lodging Association released this projected revenue analysis this week. Nationwide, they predict U.S. hotel business travel revenue will end 2022 at 23 percent below what it was before the pandemic, ending the year down more than $20 billion compared to 2019.

"While leisure travel is expected to return to pre-pandemic levels this year, business travel — which includes corporate, group, government and other commercial categories — is the hotel industry’s largest source of revenue and will take significantly longer to recover," wrote the group.

Nationwide, hotels lost an estimated $108 billion in business travel revenue during 2020 and 2021 combined.