Jobs Report Boosts Hospitality, Meeting Industry Confidence
Nearly two full months into 2023 and indicators are increasingly positive for the hospitality industry, with the latest jobs report further boosting industry confidence.
The January employment report from the U.S. Bureau of Labor Statistics saw the overall economy add 517,000 jobs with the leisure and hospitality section leading the way by adding 128,000, more than any other sector.
U.S. Travel Association President and CEO Geoff Freeman said the jobs report “in which 25% of all new jobs were added in the leisure and hospitality sector is further evidence that travel is essential to the U.S. economy. Travel’s success is the nation’s success, and robust travel demand is supercharging our nation’s economic recovery and job growth.”
While U.S. employment has fully recovered and continues to post gains post-pandemic, with hospitality employment up 6% year over year, there is still room for growth as, Freeman notes, the industry currently has nearly 2 million open jobs despite returning to pre-pandemic employment levels.
One solution to closing the gap: allowing more temporary workers into the United States with H-2B visas and by enacting other priorities to spur travel demand and growth, issues that should be “a top priority for the federal government,” Freeman said.
Those priorities include:
- Decreasing international visitor visa wait times, which total more than 400 days worldwide in the United States’ top 10 visa-requiring markets.
- Eliminating the vaccine requirement for international visitors.
- Restoring the Chinese inbound travel market and ensure processing operations run efficiently as demand increases.
Domestically, Freeman and the U.S. Travel Association are advocating for strategies to enable stronger travel growth, including the return of the federal workforce back to the office and encouraging the return of government business travel.
“Travel is essential to the U.S. economy, and both the public and private sectors have roles in getting this industry to its full potential,” Freeman said. “But when we talk about the travel industry, we’re really talking about every industry, how travel’s growth and success is integral to practically everything from manufacturing to education and far beyond.”
The jobs report is just one of several key indicators that reaffirm an upward trend for business travel and the meetings and events sector. Other key indicators include:
- January marked eight consecutive months of easing inflation.
- Hotel room occupancy is at 63.8%, the highest since 65.9% in 2019.
- While U.S. RevPAR—the metric used in the hospitality industry to assess a property's ability to fill its available rooms at an average rate—did remain below 2019 levels in December, upper-upscale improved in the same month, reaching 104% of 2019; upscale reached 107%; and upper midscale improved to 116%. Essentially, luxury hotels, especially in resort destinations, are outperforming other types of hotels because of robust demand and pricing power, according to a report from CoStar.
- Hotel room revenue is at $197.48 billion compared to $170.35 billion in 2019.
- Hotel projects are nearly 17% up year-over-year with construction spending up 31.4% year-over-year.
On the travel front, group and transient business travel continue to improve as a percent of overall demand with inbound international travel at 71.2% relative to 2019. The reopening of Japan and China from post-pandemic restrictions will almost certainly be a positive influence.
Another recent report, this one from the Global Business Travel Association (GBTA), indicated that travel managers are anticipating more business travel with 90% of respondents to a survey saying they believe employees are willing to travel.