Prior to the pandemic, hotels supported one in 25 American jobs—8.3 million in total—and contributed $660 billion to U.S. GDP
As a result of the sharp drop in travel demand from COVID-19, state and local tax revenue from hotel operations will drop by $16.8 billion in 2020, according to a new report by Oxford Economics released today by the American Hotel & Lodging Association (AHLA). That represents a whopping 42% decrease from the $40 billion in state and local tax revenue generated from the hotel industry in 2018.
Indeed, hotels have long served as an economic engine for communities of all sizes, from major cities, to beach resorts, to small towns off the interstate—supporting job creation, small business opportunities and economic activity in states and localities where they operate. Hotels also generate significant tax revenue for states and local governments to fund a wide array of government services.
“We expect it will be years before demand returns to peak 2019 levels,” said Chip Rogers, President & CEO of the American Hotel & Lodging Association.
“Hotels positively impact every community across the country, creating jobs, investing in communities, and supporting billions of dollars in tax revenue that local governments use to fund education, infrastructure and so much more,” said Chip Rogers, President & CEO of the American Hotel & Lodging Association. “However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery. We expect it will be years before demand returns to peak 2019 levels.”
Some of the hardest hit states include California, Florida, New York, Nevada, and Texas.
Some of the hardest hit states include California (-$1.9 billion), New York (-$ 1.3 billion), Florida (-$ 1.3 billion), Nevada (-$1.1 billion) and Texas (-$940 million). These tax impacts represent the direct tax revenue decrease from the severe drop in hotel occupancy, including occupancy, sales, and gaming taxes. These figures do not include the potential, significant, knock-on effects on property taxes supported by hotels (nearly $9B).
Read AHLA's press release
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