U.S. Tourism Is Rebounding From Pandemic, Fed’s Beige Book Finds

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The U.S. tourism industry is seeing a recovery during the crucial summer season, according to a Federal Reserve report released Wednesday.

The Beige Book survey, based on information gathered by the Fed’s 12 district banks from late May to early July, showed some businesses reporting record demand for leisure hotels and air travel, particularly in outdoor vacation destinations such as Cape Cod. Cities such as New York and Washington, D.C. also saw a rebound in visitors.

However, growth was held back by continuing labor shortages, which have led some businesses to reduce capacity and increase wages. Demand for business travel remains weak, the Beige Book found.

Following is a look at some of the reports on the tourism industry from Fed district banks:

New York

“In New York City, hotel occupancy rates climbed above 60% in June, a post-pandemic high, though room rates have remained well below pre-pandemic levels. With most restrictions now lifted, many more New York City hotels, restaurants, museums, and entertainment venues have re-opened or eased capacity constraints.”

“A survey of residents across the Northeast indicated that many are eager to visit New York City, and the city recently launched a large promotional campaign to draw more domestic visitors.”

Richmond

“Some beach communities reported record visitation, as hotels saw record-breaking occupancy and beach short-term rentals were booked solid through the summer and into the fall.”

“Many hotels and restaurants continued to report labor shortages that led them to limit capacity or services. Contacts attributed demand to domestic travel, and visitation to the District of Columbia strengthened but remained below pre-pandemic levels.”

Cleveland

“Hoteliers and restaurateurs reported significant improvement in activity as pandemic fears waned, and a contact at a large airport said that leisure travelers drove a strong rebound in air travel that exceeded her expectations.”

Boston

“Hotel bookings, occupancy rates, and room rates on Cape Cod held steady or improved further in a record-breaking spring season.”

“Aside from potential problems related to ongoing labor shortages, retail and hospitality contacts remained optimistic that the summer would continue to yield very strong results.”

“Travel industry respondents reported that air travel through Boston increased substantially in recent months. Compared with the comparable months from 2019, passengers were at 40% as of April 2021, at 45% as of May, and are expected to surpass 50% in June and July.”

Chicago

“Spending on leisure and hospitality services continued to rebound. Contacts noted especially strong recoveries at restaurants, casinos, and concessionaires at sporting venues and national parks.”

Atlanta

“Atlanta, Miami and Orlando were among the top destination cities for Memorial Day weekend, kickstarting the summer travel season. Hotel occupancy levels at lower-priced hotels were elevated, but demand for higher-priced hotels dependent on business travelers remained weak.”

©2021 Bloomberg L.P.

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