New Research Underscores Importance of Natural Gas to Hospitality Sector
Washington, D.C. – The American Gas Association today released a study that underscores the critical role natural gas plays in the U.S. hospitality sector. “Advancing America’s Hospitality: The Value of Natural Gas to the U.S. Hospitality Sector,” the second in AGA’s Advancing America series, examines how natural gas is essential for a healthy hospitality sector. The study underscores the significant economic impact that would be felt throughout the U.S. economy if natural gas was not an available energy source—impacting the cost for consumers on everything from vacations to eating out with a cumulative increase in net costs of nearly $10 billion between 2026 and 2050.
According to the study, “$9.8 billion from 2026 to 2050 is roughly $2,600 per capita or $11,600 for a family of four,” equally about $500 per year per family of four. That means fewer vacations and less going out to eat for the average family.
“This analysis shows how critical natural gas is to the hospitality sector” said Karen Harbert, AGA president and CEO. “The safe, affordable and reliable energy that natural gas provides underpins an enormous sector of our economy that accounts for 13.5 percent of all U.S. jobs. It’s the energy that fuels the kitchens delivering world class cuisines, heats the rooms that stand in for homes away from home, warms pools for family fun, and so much more. Natural gas quite literally fuels the fun and comfort we all want as we travel and experience all the world has to offer. On top of that, it helps keep vacations more affordable for travelers in a sector that keeps tens of millions employed while fueling local economies.”
“The threat to natural gas cooking goes right to the heart and soul of the restaurant industry. There are certain types of food and certain culinary techniques that require a flame for consistency and quality” said National Restaurant Association Executive Vice President for Public Affairs Sean Kennedy. “More than 3 in 4 restaurant operators have built their menus – which are essentially the core of their business plans – using gas for cooking. The loss of this option would not only be a devastating financial blow for operators and consumers as this report highlights, but it would forever change the restaurant landscape in any impacted community.”
Findings of the report include:
- Replacing natural gas would cost the hospitality sector $9.8 billion between 2026 and 2050. That does not account for equipment replacement costs or any increase in electricity prices due to increased demand.
- The increase in cost to the median U.S. family would be $500 per year.
- These costs would be imposed on an exceptionally low-margin sector – restaurants have average profit margins of 3-5 percent, hotels have a net margin of 1.1 percent and entertainment and recreation operates at a 0.9 percent margin.
- The U.S. hospitality sector is over-indexed in terms of its impact on state and local government finances, accounting for a significant portion of tax revenue.
“This analysis makes it clear how reliant the hospitality industry, the jobs it supports, and the revenues of local and state governments are on natural gas,” Harbert continued. “Ensuring that this key economic sector can continue to reap the benefits of the reliable energy provided by natural gas should be a top priority for policy makers and regulators at every level.”