How Hospitality is Adopting to the Economic Recovery

Last week, we reported TK Elevator Index insights into the economic recovery in office buildings. While the June data revealed a strengthening return to the office, building use patterns have undoubtedly shifted. Since digital collaboration introduced new possibilities of what we could get done at home, we’ve questioned the need to travel like we did before.

These travel shakeups confronted the hospitality sector with unprecedented challenges, but newfound flexibility in the workplace unlocks opportunity for increased leisure travel. This week, we will investigate how the economic recovery has affected the hospitality industry.

The American Hotel & Lodging Association, the industry’s largest advocacy group, released a July 2021 report noting the exceptional downturn and slow recovery of hotels. The hotel market remains especially depressed in large urban commercial markets. In New York City, for instance, nearly 200 hotels have closed since the beginning of the pandemic.

A Steady Increase in Leisure Travel Demand

Despite these challenges, a steady increase in leisure travel demand encouraged the report’s authors. While business travelers may now be more likely to stay at home, extra time at home has left Americans eager to get away, raising expectations for a summer tourism boom. In the near-term future, it appears the hospitality recovery will be driven by these travelers.

Our TK Elevator Index tested this hypothesis with MAX elevator activity data from entertainment, leisure and hospitality buildings. MAX is the elevator industry’s first cloud-based, predictive maintenance solution. It extracts data and provides predictive and proactive service to customers on over 85,000 elevators across the country.

The June 2021 Index shows entertainment, leisure and hospitality elevator trips at 83% of pre-pandemic levels, a formidable recovery. This continues a trend of steady growth every month since December 2020, when elevator activity remained at 66% of pre-pandemic levels. The month-on-month sustained growth is an encouraging sign that a steady recovery in the sector is underway. Activity in the hospitality industry appears especially strong in traditional vacation spots and coastal towns.

Economic shakeups are inevitable in our rapidly changing age, but big data technology like MAX helps businesses swiftly predict and respond to their customer’s needs. The June 2021 TK Elevator Index corroborates the relative importance of leisure travel for the hospitality industry in the near-term future.