PHILADELPHIA (KYW Newsradio) — Tourism officials expect hotel revenue this year in Center City Philadelphia to surpass pre-pandemic numbers, at a time when the hospitality and restaurant job market is experiencing major growth.
"We expect to be fully recovered by next year, and we see no reason why we shouldn't be able to reach that,” said Greater Philadelphia Hotel Association Executive Director Ed Grose.
Visit Philadelphia said Friday that Center City hotel occupancy in 2022 bumped far above half-full to 56.4%. In 2021, those hotel rooms were only 40.8% full. The hotels also made $622 million in revenue last year, a 72% rise over 2021 levels.
The organization further cites a study by Tourism Economics which says Center City should build even more upon 2022’s success.
The study says Center City hotel occupancy should reach a level about 15% below 2019, and with what they forecast to be strong room rates, the total hotel revenue should rise to 2019 levels.
Grose explained that if hotels aren't doing well, that means the city isn't doing well.
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“The hospitality industry is an economic engine for the city,” he explained.
"There's a lot of ancillary businesses that benefit from people staying in hotels."
Not only is Grose expecting 2023 to be a boon for hotels, but many other parts of the hospitality industry could see revenue that surpasses pre-COVID-19-pandemic earnings.
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"We're coming back a lot faster than we anticipated,” said Visit Philadelphia President and CEO Angela Val. “I think [with] a lot of that pent-up demand that we had over these last three years, people are still traveling despite the economy."
Val said she was optimistic at the beginning of 2022, but then the COVID-19 omicron variant hit.
"People were putting the masks back on and staying home again,” she said. “In '23, we are confident that we are going to be able to have a consistent 12 months where travel will feel more normal than it has over these last three years."
Visit Philadelphia is offering numerous incentives for travelers to make Philly their vacation destination, including three nights for the price of two at participating hotels.
Job report: Hospitality, restaurant jobs rise most
As the hotel industry continues to grow in Philadelphia, more workers are headed toward that service sector and related businesses that benefit from more travelers.
The Employment Situation Summary from the U.S. Bureau of Labor Statistics shows a 7% increase in restaurant and hospitality jobs between January 2022 and January 2023.
Bureau of Labor Statistics Philadelphia office economist Karl Kever said it’s the biggest jump by far in any sector.
“Prior to February 2020, the largest increase I can see all the way back to 2013 for this sector is 4%,” said Kever.
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He said it’s unusual to see the kind of growth that we’ve been seeing since 2021 in any particular industry.
“That's because we also haven't seen decreases that we saw in 2020 due to COVID,” Kever explained.
“When we look at the 2020 numbers, we need to remember there's a 47.3% decrease in April, there was a 39.7% decrease in May, and we pretty much had decreases all the way until March 2021. We had double-digit decreases.”
Pennsylvania Restaurant and Lodging Association Senior Vice President of Strategy and Engagement Ben Fileccia agrees that restaurants are doing much better this year.
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“Last year, everybody had a lot of problems just trying to staff up their restaurants in order to open for business,” he said. “Everybody is still looking for employees. However, it doesn't seem as drastic as it was last year.”
Fileccia added it has taken a while to get employees to return to the hospitality industry.
“We are seeing them come back now and we still have a long way to go, but we're in much better shape this year than we were last year,” he said.
“The past couple of months, I have not been inundated with people asking me, ‘Can I find them a server?’ or ‘Can I find them a bartender or cook, or a manager?’”
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He also said COVID-19 prompted a cultural shift, creating more favorable conditions for workers and making hospitality jobs more attractive.
“Restaurants are offering more benefits now than they ever have. Wages are up now,” Fileccia said. ”There's more of an emphasis on a work-life balance.”
Meanwhile, Kever says no matter which industry does best in any given period, typically economic growth is felt across the board.
“If a business is doing well, they're probably going to need an accountant,” said Kever. “You might see increases in different fields like that.”