Tourism is helping DC's Hotels to recover slowly but more help is needed

With a majority of Americans now vaccinated and the summer weather upon us, leisure travelers have returned to the nation's capital. This activity has brought new demand for D.C. hotels that have survived a nightmare year, but hotel owners say it isn't enough. Many D.C. hotels rely on business travel and conventions, demand segments that have yet to recover.

Most hotels still aren't profitable, owners say, and the uneven demand makes it difficult to bring back staff. Many owners and local tourism officials say the industry still needs more government help to fully realize a recovery from the coronavirus pandemic. The District's total hotel revenue was down 75% from the same period in 2019, according to city agency data.

Until the business travelers are back and group meetings are happening, hotels will be down in the District. The drop in revenue is something that leisure travelers just can't fill. Leisure trips can make hotels busy on the weekends, but the weeknights, when business travel typically occurs, are still slow. This uneven demand makes it difficult to bring staffing back to normal levels. For example occupancy at one of DC’s most popular hotels, The W Hotel, which is a block from the White House, was about 35% occupancy the week after Memorial Day, when normally that weekend’s occupancy hovers around 50%. The W managed the uneven demand by having employees work two to four days a week rather than a typical five, but it is still difficult for hotels to turn a profit.

Several Smithsonian museums reopened last month, and at least eight still-closed museums are planned to reopen between June 18 and Aug. 27, according to the DCist. One good thing is that you can't do a quick weekend trip to see the museums you have to have that planned out, which means a stay at a hotel for one or two days. The reopening of museums helps! It's a main leisure draw, and it will help to get many hotels back to full capacity.

During the pandemic, D.C. lost some summer tourist demand to markets with more natural outdoor activities like beaches and amusement parks. D.C. lost a host of business this spring from schools canceling their annual class field trips to the nation's capital, museum visits are a big part of class trips, so the Smithsonian not being fully open likely reduced the demand from these trips.

The slow return of D.C.'s hotel demand has owners and managers calling for more government relief for the industry. Many hotels received federal funds from the Paycheck Protection Program last year, and the District allocated $30M in grants to hotels in November. These robust hotel grants make D.C. one of the most supportive jurisdictions in the nation. Government funding not only helps the hotel industry recover but also brings back thousands of workers in restaurants and other businesses that support the hotel traffic.

Looking ahead many don't expect international travel to fully return to pre-Covid levels until at least 2024, but it could start picking up later this year. Many are looking to Labor day as a measure of domestic travel increasing throughout the rest of this year. Restaurants opening was a great first step to recovery for DC. Many are hopeful that momentum will continue throughout the rest of this year.