After a truly miserable 2020, hotels need a lifeline right about now. Last year, U.S. hotel occupancy rates fell to 44%, whereas they sat at 66% the year prior. Furthermore, hotel room revenue fell by nearly 50% in 2020, and while this year's projections are more favorable, they're not as strong as they could be. Hotel room occupancy is expected to average 52.5% this year, and while that's an increase of 8.5% compared to last year, it's not enough to dig hotels out of their hole.
But things aren't all bleak for hotels. As more and more people are able to get a coronavirus vaccine, travel could pick up in a very meaningful way, thereby boosting occupancy rates and, just as importantly, revenue.
Some hotels, in fact, may want to take vaccination efforts into their own hands. And that could prove to be a very wise tactic at a time when any amount of added revenue will go a long way.
Unpack, relax, and get jabbed
Hotels are used to offering key amenities like luxury bedding, high-end toiletries, on-site workout facilities, and swimming pools. And now, there's a new perk they're considering offering guests and nonguests alike: coronavirus vaccines.
The American Hotel and Lodging Association (AHLA) says hotels are perfect to aid in the rollout of vaccines. They have the space, they're open 24 hours a day with employees on hand at all times, and they already have refrigeration, which is needed for today's vaccines. As such, AHLA CEO Chip Rogers has talked with major hotel chains about offering coronavirus vaccines, and so far, there's plenty of buy-in.
Now, occupancy rates won't necessarily jump overnight as hotels start offering up vaccines. But they'll help hotels regardless. First of all, the sooner more people are vaccinated, the sooner the tourism industry can open back up. Secondly, some people may be willing to travel to get a vaccine sooner, requiring lodging in the process. Hotels may not see a huge influx of bookings in the course of offering vaccines, but some may see their occupancy rates climb. And given this year's projections, any uptick in bookings can go a long way.
The AHLA has already stepped up to serve as a public resource during the pandemic. As part of its Hospitality for Hope initiative, hotels have opened their doors to provide temporary housing for healthcare workers who have traveled to assist in coronavirus hotspots. Offering vaccines is another way for hotels to build goodwill with the public, and in an age when private vacation rentals are growing increasingly popular, that's a good thing.
Of course, hotels will need permission from their local Department of Health to get approved as vaccine sites. But if they get the go-ahead, it could be a ray of light for an otherwise struggling industry. In turn, that would be good news for real estate investors with hotel real estate investment trusts (REITs) in their portfolios -- not to mention the countless hotel workers whose jobs are currently hanging by a thread.