10 U.S. cities including New York, DC and San Francisco lost almost all of their business travel income this year

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  • The fallout from the coronavirus pandemic is wiping out a decade of income and job growth, according to a report.
  • Business, government and group travel are the main source of revenue for the industry.
  • Travel income has been hammered by remote working and a further rise in COVID-19 cases.
  • See more stories on the Insider business page.

U.S. cities across the country will lose millions, and in some cases billions of dollars in revenue in 2021, as far fewer people travel on business than before the outbreak of the coronavirus pandemic, new data shows.

The US travel market, especially the hospitality industry, is suffering due to remote working and the coronavirus, according to a study published by data analytics company Kalibri Labs and the American Hotel & Lodging Association . The research was first reported by Bloomberg.

Revenue from business travel, which includes businesses, groups, government and other commercial categories, is down dramatically in cities across the United States for 2021 compared to 2019, before the pandemic began.

Ten major cities were the hardest hit. The New York City market, the biggest earner for business travel, is expected to generate around $ 530 million in revenue in 2021, down 88% from $ 4.5 billion in 2019. Washington DC Markets and Orlando, which both made about $ 2.7 billion in 2019, also reported a drop of more than 80% from 2019 numbers. San Francisco recorded the largest decline, with revenue down 93% since 2019. Las Vegas, which hosts many corporate events, is expected to lose 71.2% of its 2019 revenue this year.

The pandemic “wipes out a decade of income and job growth” in the hospitality industry, the report concludes.

Revenue per available room for most generic business travel hotels is down 45% from 2019, previously calculated by Insider. Business and group travel is not expected to return to pre-pandemic levels until 2023 at the earliest.

“Business groups usually provide an occupancy base for the market and without it hotels really won’t have huge pricing power, so it will be a challenge for several years on the profitability side.” Evan Weiss, COO at LW. Hospitality Advisors, NY1 said in January.

Travel at all levels is still struggling to pick up the pace after falling off a cliff during the pandemic.

“Dense urban markets such as New York, Washington DC, Chicago and San Francisco are still only recovering 20-30%,” Hyatt CEO Mark S. Hoplamazian said on a earnings conference call of the second trimester.

The hospitality industry collapsed during the COVID-19 pandemic as air travel halted, offices closed, and millions of workers became entirely remote and virtual. Pleasure travel made a slight comeback last summer as more people got vaccinated and chose to travel.

Analysts had expected business travel to pick up in September as work resumed. But employers have a harder time getting employees to return to the office fully, including travel commitments for work. Many conferences and trade fairs, which are the main opportunities for working and traveling in groups, are still held virtually, further reducing the need for business travel. Concerns about COVID also persist and the Delta variant creates additional uncertainty with travel.

50% of business travel will disappear after the pandemic, as face-to-face meetings will become less regular, Bill Gates said in 2020.

Still, executives of large hotel chains have remained hopeful that business travel will rebound, with some even offering alternative uses for hotel vacations, such as temporary offices. The CEOs of Hyatt and Hilton both said in their earnings calls they are seeing business travel revenues pick up, especially among regional small and medium businesses. Congress also introduced the Save Hotel Jobs Act this week, aimed at further mitigating the impact of declining business travel on the hospitality industry and its workers.

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