American hotels suffer steep taxable revenue losses due to COVID-19

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COVID-19 and the mandated shutdown that came with it have caused state and local tax revenues from hotel operations to drop by nearly $17 billion this year, an Oxford Economics report found.

The report was released by the American Hotel & Lodging Association (AHLA) and noted that the hardest-hit states are California, New York, Florida, Nevada and Texas — ranging from $1.9 billion down to $940 million in tax revenue declines.

The report does not include figures for potential significant effects on property taxes supported by hotels, the release states.

“Getting our economy back on track starts with supporting the hotel industry and helping them regain their footing,” Chip Rogers, president and CEO of the AHLA said in the release. “Hotels positively impact every community across the country, creating jobs, investing in communities, and supporting billions of dollars in tax revenue that local governments use to fund education, infrastructure and so much more."

Rogers said the effects on travel have been worse than 9/11.

"However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery," Rogers said in the release. "We expect it will be years before demand returns to peak 2019 levels."

Hotels supported one in 25 American jobs before the pandemic, for a total of 8.3 million jobs, meaning the hotel industry contributed $660 billion to the U.S. GDP, the release states. The pandemic has caused the hotel industry to suffer more than 70 percent of employees laid off or furloughed, resulting in a projected worst year for hotel occupancy.

Experts estimate that hotels won't reach 2019 occupancy and revenue levels until at least 2022, the release states. Business travel is also not expected to rebound until 2022.

Hotels generated $186 billion in local, state and federal taxes each year prior to the coronavirus, the release states.

North Dakota, South Dakota, Wyoming, Rhode Island and Montana were the least hardest-hit states, ranging from losses of $19.5 million to $45.9 million.

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