Travel, employment and supply chain issues all impact the hospitality industry, says CBRE report
WASHINGTON DC – Since the start of the COVID-19 pandemic, there have been numerous changes in travel, employment and supply chain issues, all of which are having an effect on the hospitality industry, according to the Hotels in the United States State of the Union: CBRE Hotel Research Report. CBRE, based in Washington, DC, released the report earlier this month.
Regarding travel, the sector seems to have recovered. CBRE says air travel is above 80% of pre-COVID-19 levels after high levels of travel during Halloween this year. In addition, hotel cancellations have remained fairly stable since the start of the pandemic. In March 2020, there was a huge increase in hotel cancellations, but since then cancellations have remained fairly low for most of 2021 with a slight increase in July 2021.
In addition, restrictions on international travel are hurting the US hotel industry. This year, there was considerably less international travel spending in the country than before the pandemic, with August 2019 registering around $ 12 billion in spending compared to around $ 2 billion in August 2021.
Another change since the pandemic is that most inbound travelers now come from Latin America, with the main inbound borderers from Mexico, Colombia, Peru and Ecuador in August 2021. Two years before, in August 2019 , the main countries visiting the United States were Canada, Mexico, the United Kingdom and Japan.
Employment is almost fully restored
CBRE reports that employment will be fully restored by the second quarter of 2022. Additionally, CBRE predicts that the majority of the country’s markets will return to 2019 employment levels by 2022, along with Austin, Salt Lake City and Tampa in the lead. The organization also reports that college-educated employment among those with a bachelor’s degree or above has completely returned to pre-pandemic numbers.
In the construction industry, the CBRE report found that construction wages rose 7.7% from around $ 28.69 per hour in October 2019 to $ 30.90 per hour in October 2019. October 2021. On the other hand, however, construction employment is 3.5% lower than it was before the pandemic.
Despite the difficulties in the hospitality industry, job vacancies per hotel are still above the peak before the pandemic of February 2019. Hotel wages also increased 12.5% year-on-year. other from October 2021.
Many people in the workforce still work from home today. The CBRE report compared annual travel costs, the percentage of jobs favorable to remote work, and the percentage of workers who were away before the start of the COVID-19 pandemic. The report found that the markets with the greatest prevalence of virtual work were Washington, DC, San Francisco, Austin, Denver, Raleigh, San Jose, Atlanta, Phoenix, Seattle, and Sacramento. CBRE reported that these cities have a large amount of virtual work as they are large technology markets, capable of doing more virtual work.
Markets with fewer opportunities for virtual work included Richmond, Salt Lake City, Miami, Columbus, Cincinnati and St. Louis. The Midwest tends to have fewer high tech jobs and therefore there are fewer opportunities to work from home. The report also states that these particular Midwestern markets tend to have more manageable commute times, which encourages office use.
Supply chain stands
Supply chain disruptions have persisted due to COVID-19. There was an average supply chain growth of 2.3% in 2021, with the highest growth in markets such as Austin, Charlotte, Nashville and Tampa.
In addition, construction inputs such as wood, steel, iron and lumber continue to be commodities. In October 2021, steel and iron were 81 percent above the producer price index average, while lumber and wood products were still 18 percent above the average. above the average of the producer price index. The CBRE report indicated that the future could have headwinds for steel and lumber, but lumber declines could dampen price increases.
– Julia Sanders