- Revenues still $83bn below 2019 levels
- World’s five largest hotels lost $14bn amidst pandemic
- Thousands of cancelled vacations hit revenue down to $198.6bn in 2020
- Africa’s upcoming 78,000 rooms in 408 hotels shattered by Covid
- But by end-2025, revenues to rise to $456.2bn
Ben Eguzozie, in Port Harcourt
Despite the expected 43.4 per cent growth to $284.7 billion this 2021, the global hotel industry would still witness slow recovery. Although hotels around the world implemented increased safety and sanitation measures, and adapted to a post-COVID world, yet analysts predict that recovery to pre-pandemic levels could take years.
Like the travel and tourism (T&T) industry, a related sector to the hotel industry, the pandemic continues causing huge disruptions to both industries. The $7.6 trillion T&T industry employing some 298 million workers across the world was badly hit by the pandemic.
According to data presented by StockApps.com, the revenues of the global hotel industry are expected to grow by 43.4 per cent year-over-year and reach $284.7 billion in 2021. Yet this is still $83 billion less than in 2019 pre-pandemic era.
A three-year recovery to pre-COVID-19 levels
To curb the spread of Coronavirus, countries worldwide imposed lockdown rules, leading to thousands of cancelled vacations, and closed hotels in the first half of 2020. Since late last year, many countries lifted off travel restrictions allowing hotels to cautiously reopen for the summer travel season, yet the first two quarters of the year produced colossal revenue drops.
A Statista survey showed that the global hotel industry’s revenue plunged to $198.6 billion in 2020, a massive 46 per cent drop year-over-year. Some hope flashes around. The entire sector is expected to witness a recovery with revenues rising by $86.2bn this 2021, yet this is still deep below the pre-COVID-19 levels. Many countries haven’t fully reopened their air travels. Only few vacations are seen taking place around the world.
The Statista data indicate that despite the expected 2021 revenue growth, it will take three years for the hotel industry to recover fully from the effects of COVID-19 pandemic. By 2022, revenues are projected to grow by 20 per cent and reach $342.6 billion, $1.3 billion less than in 2017. In 2023, hotels around the world are forecast to generate $390 billion in revenue. By the end of 2025, this figure is expected to rise to $456.2 billion.
Statistics show the number of users in the hotel industry halved amid the pandemic, falling from 1.1 billion in 2019 to 595 million in 2020. Although Statista predicts this figure to rise to 845.8 million in 2021, that is still 218 million below 2017 levels. By 2023, the number of users is forecast to recover to 1.19 billion.
World’s five largest hotel chains lost $14bn
Statistics show that the world’s five largest hotel chains, including Intercontinental Hotels Group, the only non-US company on the list, saw their revenues plunge to $14 billion due to the COVID-19 pandemic. The other four are: Wyndham Worldwide, Choice Hotels International, Marriot International, and Hilton Worldwide Holdings. The US hotel industry’s revenues, the world’s leading hotel market and home of four out of five largest hotel chains globally, are forecast to jump by 55 per cent to $65.6 billion YoY in 2021. Still, this is $20 billion less than before the onset of the Covid-19 pandemic. Statistics show that it will take years for the US market to recover from the COVID-19 hit.
Revenues of Wyndham Worldwide, the biggest hotel chain in the world by the number of hotels, plunged by 36 per cent due to the pandemic, falling from over $2 billion in 2019 to $1.3 billion in 2020. The company’s 2020 earnings report revealed net loss for the full-year was $132 million, with adjusted net income at $96 million.
Choice Hotels International, the world’s second-largest hotel chain, saw its revenue dip by 31 per cent or $340.7 million for the full year 2020. But in 2019, the company’s annual revenue was $1.1 billion. This figure plunged to $774.1 million last year.
However, Marriot International, the world’s third-largest hotel chain with 5,974 hotels in more than 110 countries, witnessed the most significant loss, with revenue plunging by $10.4 billion due to the COVID-19 crisis.
For Hilton Worldwide Holdings, the fourth largest hotel chain globally, its revenue loss was $1.5 billion in 2020.
Africa’s upcoming 78,000 rooms in 408 hotels shattered by Covid
African hotel development which returned to growth at the start of 2020, with more than 78,000 rooms in 408 hotels in pipeline was shattered by the Covid-19, according to annual survey by W Hospitality Group, acclaimed as the industry’s most authoritative source.
Ninety hotels with 17,000 rooms were scheduled to open in 2020, but about half of these were delayed, bringing the actualization rate down to no more than 40 per cent, according to Trevor Ward, W Hospitality Group’s managing director in June last year.