Philadelphia hotel occupancy plummeted nearly 60% during pandemic, city says

More than two-thirds of Center City hotel rooms sat empty last year as the pandemic and related restrictions on gatherings kept many at home, according to new figures released by the Philadelphia mayor’s office Wednesday.

The statistics on hotel stays provide another snapshot of the economic toll that has accompanied a public health crisis, especially in a city that had grown accustomed to hosting a growing tourism market.

The mayor’s office called the numbers “devastating.”

Hotel occupancy hovered at 30.9% in 2020, a decrease of 59.5% compared to 2019.

The average daily room rate fell 22.7%, to $156.27. Total room revenue came in at $176.9 million, a steep 74.9% decline from 2019 levels. (The data points all come from firms that track the hospitality market.)

Demand for Airbnb and other short-term rentals in private homes also suffered, dropping 43% to 189,500 room nights in 2020, according to research firm AirDNA.

Still, Mayor Jim Kenney noted signs that business will be better this year.

“Our travel and tourism industry was hit hard by COVID-19, but its recovery is poised to begin in earnest in 2021,” Kenney said in a statement. “In fact, Tourism Economics estimates that Philadelphia will sell 660,000 more room nights in 2021 than we did in 2020.”

Center City hotels sold 1.1 million room nights in 2020, a 67.5% decrease from 2019.

Hospitality leaders expect leisure travelers to return to the city ahead of business travelers and those who’d come for a group meeting or convention.

“We, as a city, market ourselves very well, and I think we’ll bounce back quicker than others,” said Ed Grose, executive director of the Greater Philadelphia Hotel Association (GPHA), which represents nearly 100 member hotels.

But he said it will be important to win back meetings and conventions, in addition to leisure tourism, because “Philadelphia hotels are more reliant on group business than other cities.”

In 2019, Philly hotel occupancy was split about evenly among business travelers (33%), group attendees (32%), and leisure visitors (31%), with contracts for flight crews and others making up the rest.

For now, city health orders continue to restrict indoor group gatherings.

Grose said that while hotels are “cleaner than they ever have been,” vaccine distribution “is what’s going to make people feel comfortable traveling again.”

In the meantime, Grose said, hourly employees, many of whom are now out of a job, are bearing the brunt of the lost business. At a hotel used for conventions, hourly workers earn $44,000 a year on average, plus full benefits, according to Grose.

Preliminary numbers for November 2020 show that leisure and hospitality jobs in the five counties fell 66% year-over-year, Grose said, from 79,800 jobs in November 2019 to 48,200 a year later.

“The real sad part of the story is what’s happening to our hourly employees and the fact that they’re out of work right now,” Grose said. “And we need to do everything we can to get those folks back to work.”