Tourist-heavy cities have seen more revenue from taxes on overnight hotel stays compared to other cities relying on business travel.
Cities like Orlando, Oahu and others have reaped the benefits of the current environment, the report says, while those focused on commercial travel, such as Boston, saw more of a decline in their revenue per available room since 2020, a report from Bloomberg says.
According to a paper by University of Chicago Harris School of Public Policy professor Justin Marlowe and HVS Consultant Tom Hazinski, Boston saw a 70% drop in revenue per available room, as opposed to Phoenix, which is focused on leisure and only saw a 39% decline.
Lodging taxes are levied on short-term stays at hotels or Airbnbs, and they make up a small share of general-fund revenues for most municipalities – though around $4 billion of bonds are backed by lodging taxes or local hotel revenues. Because of this reliance, a decline in the revenue streams can hamper the credit quality of the debt.
According to the report, the pandemic caused the split – the cities that were doing well were those that focused on vacations, while those focused on business meetings or conventions fell behind.
“People will pay a lot for leisure travel, especially in traditional leisure destinations,” Marlowe said in an interview. “Meanwhile, on the commercial travel side, now that meetings can be done via Zoom and people are less excited to travel to certain kinds of destinations, you actually have the opposite.”
Airbnb has seen more trips and longer stays in the past few months, even as inflation wreaked havoc, PYMNTS wrote.
Read more: Airbnb’s Q2 Earnings Show Working Vacations Still Have Traction
Customers have cut back on nonessential travel, but apparently the past few years of the pandemic have left them with a penchant for travel.
Brian Chesky, Airbnb CEO, said a “working vacation” was a popular concept for the pandemic era, and the report notes that he may have been right. He said on an earnings call that customers are “now living on Airbnb.”
“We saw long-term stays of 28 days or more remain our fastest-growing category by trip nights compared to 2019. The long-term stays have increased nearly 25% from a year ago. And actually, long-term stays have increased almost 90% since Q2 2019.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.