Hotels in Maine are recovering to near pre-pandemic levels, with tax revenue and occupancy rate rises expected to be among the highest in the nation this year, according to industry data released this week.
Nationwide, local and state tax revenue from hotels is expected to reach new heights this year at almost $47 billion, the American Hotel and Lodging Association and Oxford Economics said in a study released Tuesday comparing five years from 2019 with expectations in 2023.
Maine’s growth rates stack up strongly against other states. The staffing shortages that held back the industry during the pandemic appear to be easing, giving early positive indications for this tourism season and the entire year.
Maine’s hotel tax revenue is expected to rise to $211 million this year. That is a 26 percent growth rate compared with 2019, making it the highest increase in the U.S. Florida, a major tourism destination with $4 billion in revenue projected for 2023, is expected to see 23 percent growth over 2019.
Maine’s revenue department has not yet released monthly hotel tax revenue for early 2023. The state benefited from a strong summer tourism season last year, when December tax revenues topped $60 million, up almost 50 percent from the same month in 2019.
“The early numbers are fantastic,” Matt Lewis, CEO of the industry group HospitalityMaine, said. “But we need to wait and see how the summer looks before predicting the entire year.”
He said he is hearing that hotels are getting more applications for open jobs than they’ve had in years.
The dramatic pandemic-driven decline in travel in 2020 caused states nationwide to lose $13.2 billion in hotel tax revenue, according to the study, but projected state and local tax revenue for 2023 will surpass pre-pandemic levels in all U.S. states.
“Hotels are making significant strides toward recovery,” Chip Rogers, CEO of the association, said. “To continue growing, we need to hire more people.”
Workforce shortages remain a challenge throughout the country. Every state has seen a decrease in hotel employment in the last five years. However, Maine’s was one of the smallest, down 5.3 percent to 11,349 direct employees such as housekeepers and front desk agents.
Maine also was down roughly the same percentage to 40,822 workers in hotel-supported employment, which includes businesses that hotels support such as restaurants, retail and attractions.
Hotels across the country are on a hiring spree to fill many of the jobs lost during the pandemic. As of December 2022, national average hotel wages were at historic highs of over $23 per hour and hotel benefits and flexibility are better than they have been. Nearly 100,000 hotel jobs are currently open across the nation, according to jobs website Indeed.
As people begin to travel more, occupancy rates are rising but still are not at pre-pandemic levels. The average U.S. hotel occupancy rate is projected to reach almost 64 percent in 2023, just shy of the 2019 level of 66 percent and down about 3 percent.
Maine is one of only six U.S. states to show a rise in occupancy over the five years, up 5 percent to a projected rate of almost 64 percent in 2023. The state ranked second only to Alaska in its occupancy percentage increase during that period.