Austin business travel remains in recovery mode

Austin business travel is expected to remain stuck in recovery mode for years to come — and worries about cost coupled with COVID-19 variants could keep the industry in limbo even longer. Why it matters: Conventions and lodging are significant driving forces behind the local economy, with millions of dollars flowing into city hotels, shops, restaurants and bars. Even SXSW, a massive money maker for the city and hotel industry, didn't return to full capacity this year. Driving the news: Local hotels are expected to generate $243 million less from business travel this year compared to pre-pandemic levels, according to a new report from the American Hotel & Lodging Association.

With the projected 28% decline, Austin ranks 16th among the top 50 hotel markets with the biggest deficits in 2022 in business travel revenue, the study found. The big picture: Companies are reassessing and reprioritizing when and why employees travel, Axios' Joann Muller reports. Many corporate leaders want to maintain the financial savings they saw during the pandemic when employees worked remotely and corporate travel was rare. Meanwhile, business travel typically requires weekday trips, which have been more negatively impacted than weekend travel — largely driven by leisure travelers, according to Visit Austin. Zoom in: Steve Genovesi, executive vice president of Visit Austin, told Axios that the tourism group has already seen promising signs of a business travel rebound in Q1. While weekday hotel occupancy citywide is off by 12%, he said: "We are cautiously optimistic the numbers will be better than what the report is predicting." Meanwhile, Q1 weekday downtown hotel demand level has improved 20% from 2021, to just over 60% occupancy.