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Indiana travel sector hoping for further recovery in 2022

Monument Circle in downtown Indianapolis. (IIB photo/Wes Mills)

INDIANAPOLIS (Inside INdiana Business) — The president and chief executive officer of the Indiana Restaurant & Lodging Association says the state’s hotel industry will continue towards recovery this year, but full recovery is still several years away. Nationally, the American Hotel & Lodging Association says hotel occupancy rates are projected to approach pre-pandemic levels in 2022. Patrick Tamm says the Indianapolis convention sector has been fortunate to recover at a quicker pace than other cities.

“You just continue to have winners and losers, haves and have nots,” said Patrick Tamm in an interview with Inside INdiana Business.

Tamm says the Indianapolis market is reliant on group business and has the hotel room inventory to support it.

“Those are the hotels that are really struggling. At the same time, who’s having trade shows? Who’s having major sporting events? We are, right? So, we’re on that misery index, we just may be a little bit better than most.”

Tamm says while leisure and sporting events are helping with the recovery, business travel continues its anemic recovery.

The AHLA says in 2019, business travelers made up 52.5% of industry room revenue. In 2022, it is projected to represent just 43.6%. Click here to view the AHLA 2022 State of the Hotel Industry Report.

“The uncertainty about the Omicron variant suggests just how difficult it will be to predict travel readiness in 2022, adding to the challenges hotels are already facing,” said Chip Rogers, president and chief executive officer of AHLA.

“Business travel, which is really the bread and butter of travel, really just completely cratered. Business has changed what that’s looking like,” said Tamm.

While strictly business travel is slow to recover, Tamm says there has been a rise in “bleisure” travelers, those who blend a business trip with a few extra days of leisure.

“It’s impacting how hotels operate. In fact, one study of global business travelers found 89% wanted to add a private holiday to their business trips in the next twelve months,” explained Tamm.

Tamm says downtown Indy restaurants are slowly recovering, but they still continue to struggle with a large number of office-based employees working a hybrid environment and not returning to the office routinely.

“We used to have in excess of 140,000 people from the doughnut counties come into effectively a mile square of downtown. The work just doesn’t happen today. Right or wrong, it just doesn’t happen. So those ancillary services, tragically just can’t survive without that type of foot traffic,” said Tamm.

While the “day” traffic is not where it was two years ago, it is not all bad news, according to Tamm. He says some downtown restaurants are reporting strong results over the past two quarters. Likewise, he says some eateries in the suburbs, like Hamilton County, are also showing growth.