The swarm of history buffs on the Freedom Trail has returned. Storefronts on Newbury Street and beyond are abuzz with customers.
After two years of pandemic-induced financial devastation, the yearly influx of visitors to the Bay State looks like it’s finally on the rebound, with hotels preparing for record crowds this summer and hoping to reignite the region’s lucrative tourism industry.
Still, one stubborn leg of the industry has yet to recover: Business travel. And hospitality leaders are trying to figure out what to do about that.
The conferences and face-to-face meetings that once kept Boston-area hotel rooms and restaurants filled seven days a week haven’t returned to what they were before the pandemic, at least not yet. You can thank the corporate world’s tedious emergence from remote work that never seems to quite take hold for good.
“We believe people getting back in the office is good for business,” Chip Rogers, president and CEO of the American Hotel and Lodging Association, said at a press conference with other industry leaders at the Omni Parker House on Friday. “It’s good for your local economy. It’s good for your employees. It’s good for your business culture.”
And the lack of corporate travel ripples through the industry. Hotel occupancy was at 72 percent in April, said Beth Stehley, senior vice president of sales at the Greater Boston Convention & Visitors Bureau. That’s better than the last two years but still down about one-fifth from 2019 levels. Most of the conferences that have returned to Boston are seeing fewer attendees than they used to.
A report from the American Hotel and Lodging Association and Kalibri Labs earlier this year projected that revenue from business travel will be down about 44 percent in Massachusetts from pre-pandemic levels in 2022.
There are some positive signs. Demand for shorter-term meetings is up. And 75 percent of corporate planners surveyed in an April study conducted by the Global Business Travel Association said their company planned to have their employees travel domestically in the next one to three months, up 56 percent from the same survey conducted in February.
Bob Luz, president and CEO of the Massachusetts Restaurant Association, said restaurants are taking a hit from the lack of business travelers, too.
“Tourism, especially business travel and business conferences, drives hospitality, not just in Boston, but in the greater Boston area,” said Luz. “Full hotels and packed convention centers fill our restaurants and provide great income to 10 percent of the workforce in Massachusetts — that’s how many jobs reside inside of the restaurants.”
As long as business travel remains below pre-pandemic levels, the whole industry will suffer.
Its a problem that Rogers said he and other industry leaders want to see lawmakers on Beacon Hill address. They’re urging the state to allot a portion of its $5.3 billion in American Rescue Plan Act funds to hospitality groups, who will in turn use the money to promote the city. Or, Rogers said, the state could give grants directly to hotels that have been hardest-hit by the pandemic. He also proposed tax tax incentives for companies that choose to hold meetings in Boston.
“What we saw this pandemic with the historic financial suffering that occurred in restaurants and hotels is like nothing we’ve ever seen,” said Rogers. “And just because things are better today, in no way does that fill the enormous hole that was created over the last two years.”