Wolf Richter: Business Travel, Conventions, Office Occupancy Stuck in Collapse: Been so Long, People Forgot What Old Normal Was

By Wolf Richter, editor of Wolf Street. Originally published at Wolf Street.

Even as American leisure travelers have been out in force, for US hotels, the all-important and lucrative business travel revenues – corporate, group, government, and other commercial travel – are expected to be down by $59 billion in 2021 from 2019, according to the American Hotel and Lodging Association (AHLA) and Kalibri Labs today.

For the 20 largest destinations in the US, hotel business travel revenues are expected to collapse by 80% from $38 billion in 2019 to $7.6 billion in 2021, according to AHLA data.

The largest destination, the New York City metro, is expected to see an 88% collapse in annual hotel business travel revenues, from $4.6 billion in 2019 to a projected $531 million in 2021.

In Orlando, the second largest destination in 2019, annual hotel business travel revenues are expected to collapse by 81%, from $2.8 billion in 2019 to a projected $518 million in 2021.

The third largest destination, the Washington D.C. metro, is expected to see an 86% collapse in hotel business travel revenues, from $2.7 billion in 2019 to $371 million in 2021.

These are the largest 20 destinations by business travel hotel revenues in 2019, the projected year-total revenues for 2021, and the percentage difference:


20 Largest Business Travel Destinations Business Travel Hotel Revenue, Million $ % Plunge
2019 2021 projected
New York 4,560 531 -88%
Orlando 2,796 518 -81%
Washington, DC metro 2,741 371 -86%
Los Angeles 2,683 752 -72%
San Francisco 2,531 178 -93%
Chicago 2,528 346 -86%
Las Vegas 2,326 670 -71%
Boston 1,672 191 -89%
Atlanta 1,671 491 -71%
Dallas 1,611 460 -71%
San Diego 1,611 395 -76%
Hawaiian Islands 1,530 346 -77%
Phoenix 1,349 380 -72%
Miami 1,327 497 -63%
Houston 1,291 412 -68%
Seattle 1,241 193 -84%
San Jose 1,227 176 -86%
Anaheim 1,155 256 -78%
Denver 1,087 237 -78%
Nashville 981 238 -76%
Total 37,919 7,640 -80%

This analysis follows AHLA’s survey of business travelers, released two weeks ago, which found that, amid rising COVID-19 cases, 67% of business travelers were planning to take fewer trips, 52% were likely to cancel existing travel plans without rescheduling, and 60% were planning to postpone existing travel plans.

The fifth largest destination in the table above, San Francisco, is expected to see a 93% collapse in hotel business travel revenues, from $2.5 billion in 2019 to $178 million in 2021, according to AHLA.

At the Moscone Center, San Francisco’s convention center, there was hardly anything scheduled for the rest of the year to begin with – just four events. At least one of them, the 64th Annual International Auto Show in November, has already been cancelled.

Another, the 76th Annual Meeting of the ASSH (American Society for Surgery of the Head) is still scheduled for September 30 through October 2, but with a “stream-lined schedule” and an “online attendance option.”

The Cannabis Business Summit & Expo 2021 was supposed to take place in early August but was rescheduled for mid-December, and everyone is keeping their fingers crossed.

The SEMICON WEST conference and the Design Automation Conference (DAC) were supposed to take place jointly in February this year but were rescheduled for December.

So some conferences are starting to show up, and it appears they’re going to take place, but potential attendees are reluctant and organizers are leery.

This is the situation everywhere. Conference organizers are trying to get people together and put some souls into the vast convention centers, and they’re doing it, but it’s hard and slow.

The reluctance among businesses about sending employees to conferences and about even holding conferences is also reflected in still dismally low office attendance.

Across the US, companies had sill not returned in large numbers to the office, and official return-to-the-office dates announced by big companies – whatever format that return to the office would have taken, from 1 day a week to 5 days a week bell-to-bell – keeps getting pushed out.

Office occupancy, as measured by workers actually showing up at the office, struggled to recover from dreadfully low levels, but over the past two months has relapsed. According to Kastle Systems, the 10-city average has dropped to 31% of where it had been before the pandemic, meaning it’s down 69% from the Good Times:

The longer business travel and office occupancy are getting replaced by video calls and working from home, and the more people figure out how to make it work and be productive, and the more they adjust their lives around it, the harder it will be to ever return to the Old Normal.

Some of this business travel and some of this office occupancy will certainly return, but it is becoming increasingly doubtful that the Old Normal was even such a great idea to begin with, and there are now initiatives underway all around to figure out what some kind of new normal might look like.

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  1. JMM

    The Old Normal is crap and should be shot and buried. In the company I work for (software development, Canada), we had a survey done asking whether we would like to go back to the office; we have been working from home since March 2020. The answers were:

    – Never: 40 %
    – 1 to 2 times per week: 40 %
    – Full time: 20 %

    So really, things are not looking good for all the people insisting on “the office culture is very important”. Let me stay at home, save the commute time and work more efficiently. Don’t you like efficiency? Prove it.

    1. eg

      Precisely. There are lots and lots of us who merely tolerated “the old normal” and will fight hard never to go back to it.

    2. LaRuse

      My company (a public utility) ran a similar survey and had similar responses. Implementation of new ways of working in which more than 50% of us would be back in facilities 40-90% of the week was supposed to start in August but everything has been pushed back to 2022 now with the summer surge. I NEVER want to go back to the old ways but I work for extroverted people who direly miss their corner offices (I miss NOTHING about my little cubicle/storage closet). After 24 months out of the building, it will be interesting to see if next Spring we really do go back in the office even a few days per week. I think we will try and the novelty of the old slog will wear off REALLY quickly.

      1. Henry Moon Pie

        I check in on Fareed Zakaria every once in a while. He’s looked so sad since Trump was elected that I worry about him.

        This very topic was being discussed Sunday before last on his show when he popped up with this interesting tidbit that I’ll paraphrase from memory:

        I was talking to a friend of mine who’s CEO of a very large company, and he said that it was the junior workers at his company who were clamoring to come back to the office. He and other senior officers, he said, had nice homes with large and well furnished home offices, while those junior workers often were sharing small other apartments with many people. Going to the office was the way the less fortunate could enjoy a little me-time.

        I was improvising on a theme with that me-time thing, but otherwise, it’s pretty close.

    3. YankeeFrank

      I completely agree. I just declined an interview with a fintech software firm in NYC that wants me to work on site 3 days a week right now in the middle of the deltasplosion. It tells me all I need to know about how much they value their employees’ health versus their creepy desire to force them into the office panopticon.

      I will never work in an office again if I can help it and certainly not now. That garbage barge has sailed.

    4. Joanna

      95% of the people I know in hi tech want to WFH. At one point in the nineties and oughts, that was the cool thing and then the fashion changed and everyone had to work at work.

      It’s hard on young/new people who need mentoring and a more visceral sense of how the industry works, and it’s frustrating for the executives whose sense of importance is bolstered by jetting around.

      Everyone else is fine with it. Went to SF downtown a month ago. It’s a ghost town.

      That said, it’s putting the screws on to hire people in cheaper places because if everyone is working remotely it doesn’t matter where they live. That HAS GOT to affect real estate prices in NYC, SF, etc.

    5. Dr. John Carpenter

      They dragged us back into the office, insisting to was by popular demand (and that it was safe, ha.) I’d really like to see the numbers on that. If anything thing, working from home most of last year, only proved what I already knew. (That my job can be done from home, that I am more productive out of the office, that “office culture” is more of a distraction than anything else, etc.)

  2. PlutoniumKun

    On this side of the Atlantic the hotel industry is still investing as if nothing has happened. I’ve been keeping an eye on a few hotel schemes that were at a variety of stages of planning since 2019 and all are still ‘go’, including ones which were at nothing more than conceptual design stage last year. I’m not aware of a single scheme, including those on lands that would be in high demand for other uses such as residential or office, that has changed course, something I consider to be quite remarkable. I don’t know whether this is a sign of firm resolve by the industry or group delusion. I’m inclined to the latter conclusion.

    That said, all the hotels are primarily tourist/accommodation type hotels in the city, not the conference hall types. Most of the former seem to have found some business over the past year and a half, but those dependent on things like weddings and corporate events have suffered particularly badly. Those serving domestic tourists have had a great year.

    So as far as I can tell, in Europe anyway they are banking on travel and short term accommodation still growing strongly. Things may be very different in the traditional ‘business destination’ cities like Berlin or Paris, I don’t know what is happening there.

    My guess is that business travel will be the last to recover, if it does – general tourism will recover faster. My employer has found it just as convenient, but cheaper to organise online events. I suspect that liability fears and costs may make many companies much more reluctant to send staff on unnecessary trips.

    1. Tom Stone

      PK, those projects have a lot of inertia and the jobs at stake until construction begins are well paid middle and upper management jobs for the most part..
      Getting approvals takes years, once financing is lined up money is there that will go away if the projects are canceled and that money flows to hard pressed municipalities as well as corporate types.
      If drawing to an inside straight is the only way to stay in the game and keep the free drinks coming at the casino..

      1. PlutoniumKun

        I’m aware of the inertia behind these, but at least two I’m aware of were only pushed to local government approval stage in the last 6 months, plenty of time for them to have changed their minds and gone for residential or office use instead. While some of those developments are initiated by hotel chains, some are by speculative developers who intend to sell the site with the permit to a hotel operator. I know of at least one very recent one that so far as I’m aware is entirely speculative (i.e. its just a standard derivative hotel design which they will sell on to a chain operator).

        1. polar donkey

          They are still building hotels in Memphis now. Who’s coming here? Alot of development in Memphis, especially downtown, is, I believe, drug money laundering. Memphis is a massive drug distribution center. We sit at the intersection of 3 states, with rail, barge, air, and highway hubs. Have to build to do something with the money. Already have partially full apartments and hotels all over the place and more on the way. The population of Memphis and Shelby county is unchanged from 2010 to today. When motivations to build are not conspicuous, you have to wonder.

          1. Alex Cox

            The same is true of much of the hotel and skyscraper overbuilding in Liverpool. “Drug dealers salting away their profits” is the word on the street. Meanwhile the cheap and ugly buildings have cost the city its UNESCO world heritage status.

  3. David

    In Paris, some chain hotels have closed, at least temporarily. More generally, hotels that depend on rapid turnover from mass tourism are also suffering very badly: tourism in Paris is mostly families and small groups these days, so hotels can no longer count on a guaranteed throughput. The very expensive hotels are offering good deals: the Lutetia will do you two nights this weekend for €1900 rather than €2700.

    1. vlade

      TBH, at 1kEUR/night, I don’t see many takers anyways, not for a hotel. Hotels are so last century ;) (personally, I never found them attractive, good serviced apartments beat hotel any day of the week, and as often as not are also cheaper)

      1. PlutoniumKun

        I’d agree that apartments are usually much better value, especially if you are travelling with others or in a family. Anecdotally, I think the attraction of hotels is the ancillary features like gyms and bars.

        When I’m away on a work based trip, I much prefer a small guesthouse or similar when its for a single night, but for longer stays I like a hotel so I have access to a gym and food to hand when too busy to go walking and searching for somewhere to hand. Again anecdotally, my female colleagues tend to favour hotels more as maybe they are less comfortable wandering a town looking for somewhere in the evening for food or a drink (I enjoy doing this if I have the time for it).

        1. vlade

          When I was still doing business trips to Oz, the serviced apartments we were using in Melbourne had gym and a swimming pool access (one in the building, the other had an agreement with a gym next door).

          One also had a small bar/cafe, which technically wasn’t theirs, but it was hard to tell for the guests. All of them had an offering to-door food deliveries (which I admit is not to everyone’s taste, getting a steak delivered is different from having one done in a restaurant).

          I guess I’m spoiled :D

          1. David

            I think the difference is that, if you are on holiday, you accept some imperfections, because you are going to be there for some time, and you have no particular deadlines to meet. If it takes a while to find the place, or if you have to go some distance to get a meal, well, that’s OK. Travelling on business is quite different. I used to arrive quite regularly in European capitals at anything between eight and ten in the evening, and what I wanted was a hotel that expected me and had a comfortable room ready, convenient for what I had to do the next day, and the chance to get a snack in the hotel if I was hungry. Likewise, for longer-distance trips a good hotel will change your airline ticket for you, advise on restaurants and shopping (and places to avoid), get you a taxi, dry-clean your suit and a host of other things, thus enabling you to work. That’s what you (or your employer of course) pays for.

            1. vlade

              Pretty much all the services you describe were part and parcel of the serviced apartments I was using. I guess the difference was with snacks, as I either had to do with what was in the welcome pack (which was usually quite good), or call delivery guys.

              That’s what I meant that I guess I was spoiled.

            2. vlade

              That said, my business trips were usually a week or two. For an overnight stay, I guess a hotel, as a place to crash in where you don’t give a toss about what you have (because for a place where all you need is a shower and a bed, as long as they are clean, in the right palce etc., it’s all ok) is as ok as anything else.

              1. PlutoniumKun

                This may be one reason I think why there is a real convergence between hotels and serviced apartments. Some of the more recent serviced apartments I’ve seen are almost hotel like in their facilities. In particular, there are now a lot of student accommodation blocks with lots of facilities that are used as serviced apartments during the summer period – or at least, that was the original intention.

                While apartments do make sense, I do admit that when I’m travelling, whether for work or otherwise, being in a nice hotel does give me a buzz, I guess I just like the idea of having everything done for me.

  4. GM

    One would have naively thought that the hospitality industry as a whole would have lobbied hard for elimination of the virus,

    It has been abundantly clear that there will never be a full “return to normal” without that since March 2020.

    What they lobbied for instead was the virus becoming endemic because the next quarter is more important than the next quarter century…

    And these are the results.

    That’s modern capitalism in a nutshell.

    1. PlutoniumKun

      I’m continually amazed that the wider travel/tourism/hospitality industry hasn’t realised that its continual lobbying for opening is destroying its own industry. They are at it again here, exactly one year after they destroyed their own Christmas business by pushing for an opening that was clearly a few weeks too early.

      1. Eustachedesaintpierre

        My son in law down in Blessington has been hit hard as he is in the business of providing entertainment for Bars, Weddings etc. He is now again flat out with a couple of biggies in Termplebar & has picked up a few more in the North which compensate a bit for those seemingly gone forever – so we will see how that goes. The Artists he deals with have also been hit very hard & as I found out in the UK the business grants for loss of work due to Covid do not seem to be designed very well for the small operator – I got none, he got a grand, but we both have to pay our tax bills or else & I strongly suspect that we are definitely not alone.

        1. PlutoniumKun

          Thats rough, the rules have definitely been a lot tighter in Ireland than in the UK. A friend who runs a small venue in England is getting closer to normality (and he is a lot more cautious than others), while they are only slowly starting up here, and restrictions on weddings, etc., have been very tight. Temple Bar has been particularly hard hit as it depends so much on weekending tourists, and they just don’t exist anymore.

          My neighbour is a sound engineer and he’s been out of work now for the whole period (not that it bothers him, he has built up two motorbikes in that time from spare parts, one for him, and one for his gf).

          1. Eustachedesaintpierre

            Well, I will get by as fortunately I did a large downsize – it was a bit like reducing a French sauce. I don’t want for much due to my more affluent days like how my wife would drag me out to buy quality clothing which all still fit & it is was surprising what little I actually need to be content, plus I love my work, paid or unpaid just for fun.

            I think Rob will be OK as he is charismatic, gets a lot of support from many friends & those he deals with & works hard in a kind of Roddy Doyle Barrytown trilogy sort of a way.

    2. MonkeyBusiness

      The hospitality industry in the US can rely on government bail out. No matter what, we’ll end up losers.

      It’s not just hotels, the entire CMBS complex will be bailed out.

  5. YankeeFrank

    With the massive housing shortages in most major US cities these days, its a no brainer what to do with all the excess office space. Maybe just maybe its time to think about people rather than corporate profit.

    1. WhoaMolly

      It might be that converting office space to ‘villages’ is the only way to save the central cities. Instead of office space perhaps each skyscraper turns into a village. If I recall, Buckminster Fuller was predicting this fifty years ago (or so).

      If the ‘villages’ were connected by elevated green space like the New York’s High Line…

  6. bassmule

    I used to edit a magazine for medical conference planners. I got out right before the first big plunge in the business following 9/11. Which was nothing compared to the present situation. Some conferences were nothing more than deductible junkets (that’s what I called them in an interview with the WSJ–my publisher was apoplectic). But others had real value for physicians–not the lectures, but as one conference organizer said, “Talking to each other in the coffee line.” I still believe the best learning happens in the full-bandwidth, 3D world of face-to-face communication.

  7. jhallc

    I work for a large organization helping to run a food pantry out of our office building. We are only a small piece of our organinization. One positive aspect of the pandemic work from home has been that we’ve been able to utilize a bigger footprint in our existing building. Prior to Covid we were looking to rent additional outside space so we could expand the number of clients we could serve (we have a long waiting list). We have now taken over sections of the building that will never be used for cubicles again and we can install larger walk-in freezers/refrigerators and dry storage. However, the fact that there is a need for more space is not a positive.

  8. Leonardo

    I attended a conference in Ft Lauderdale last month, with planned attendance of 1000; 200 showed up. Management said that the resurgence news drove cancellations. thanks Guv DeSatanis

    1. GM

      But that’s the conundrum — there should have been no conference whatsoever, not even with 200 so it is hard to entirely blame the government if the demand for a real solution from the population is not really there.

      DeSantis has to get the death penalty for what he has done, because what he has done is deliberate mass murder.

      But that does not change the fact that no single governor can make an event like that safe without elimination at the level of the whole country.

      Problem is there is no demand for that aside from a few people like me, and mass gatherings are happening everywhere

  9. Tom Stone

    The “Hotel Sebastopol” taking up a full city block across from the Plaza was supposed to begin construction in the spring of 2018.
    Then came the fires and a substantial increase in building costs and the numbers did not work even for a luxury hotel with artisanal retail outlets in a prime location.
    It’s now a weed strewn lot with what can be very generously described as “Public Art” likely installed by someone’s BF or GF.
    It’s something I watch as an economic indicator, when those numbers work again we’ll be in the first phases of an economic recovery.
    I doubt I’ll live to see it, perhaps my 20 year old Daughter will.

  10. IMOR

    80% or nearly so of ‘business’ travel was less than necessary? Who knew?!
    It will be especially hard for hotels to reestablish any strong baseline of business if, as I’ve noticed in driving around the nation west of the Mississippi the last nine months, they almost without exception insist on top end, in season rates. “What, I get to pay the same painful to the people in A/P rate I paid in 2018, AND risk my health? Wow!”

  11. Felix_47

    If we believe in global warming there is a silver lining here. Let us hope work from home takes off. One thing we could do to make it take off and that would cut global warming is to tax gas heavily and institute a 50 MPH national speed limit. Of course our ruling Dems and Repubs don’t believe in global warming because they have done neither despite the negligible cost (gas taxes are ultimately paid by Saudi Arabia and foreign and domestic producers as consumption drops.) I guess they figure giving Australia nuclear submarine technology to face off China is a way to decrease CO2 emissions.

  12. MarkSparky

    Here in downtown Seattle there are still some afternoons you could see a tumbleweed rolling down 5th avenue in the downtown banking district. There’s so much tech officing that can be done virtually from home, that many people aren’t returning. Amazon is the Goliath in downtown office space; everyone’s waiting to see what they’re going to do, after they delayed the part-time hybrid return due to Delta variant.
    In the (unscientific) sample of other businesses on my floor, we’re all coming in occasionally to meet with staff, but rarely with any clients. I didn’t renew my lease with my suite partners in May, since I’m semi-retiring. They were given a 28% discount on the renewal from our last lease numbers, so they don’t even have to find a new person to fill my office.

  13. lyman alpha blob

    I work for a company that puts on conferences at most of the cities on the above list at one time or another. We didn’t run any for 18 months or so, but have started back up in recent weeks. We are going to run the conferences until a government says we can’t. So far some have been near regular capacity, and others have had fewer people than normal. Of the latter, some of the reduction is due to travel bans between countries as well as people simply not wanting to come due to rona fears. We did have to cancel one event scheduled for this fall because the hotel itself couldn’t guarantee adequate staffing levels.

    Out of curiosity I’ve been asking around a lot about new requirements for our events and competitor events. Depending on the venue, there are different rules in place. Some require masks, some proof of vaccination, and some require proof of vaccination and masks. None that I’m aware of are just allowing people to come in without one or the other. Enforcement of mask wearing once inside hasn’t been 100% or even close. After no business at all for well over a year, convention companies don’t want to tick off customers by being the mask police, so that’s left to the venues. I did hear that in Vegas recently, security at the casinos was strongly enforcing mask wearing at conferences – casino security is probably much more robust to begin with and I’m sure Vegas doesn’t want an outbreak and have to turn off the slots.

    Conventions would seem to be the ideal place to do some research in how the rona is spread and what precautions work best. If we know one thing, thousands of people indoors in close proximity to each other for a few days at a time is a prime opportunity to spread the infection. Since the conferences are allowed now in many places, you’d think the CDC types might want to survey those in attendance and ask them to voluntarily report any infections incurred after the conference, keep track of any preventative measures at each venue, etc. So far it’s been crickets on that, so instead its just wing it and hope for the best.

    1. GM

      It is debatable to what extent the CDC even exists as a “Center for Disease Control” at this point.

      It has been missing in action with respect to its core mission while actively making things worse by spreading misinformation regarding the dangers of the virus and the mechanisms of its spread from the beginning.

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