A new kind of traveller

Moving forward, the hotel industry will undoubtedly be impacted by the ways in which consumer behaviour and engagement have fundamentally changed over the past few years. Instead of focusing primarily on price and quality in making purchasing decisions, these new travellers are motivated by factors such as health and safety, ease and convenience, care, trust and reputation. In fact, 44% of US consumers say the pandemic caused them to rethink their personal purpose and re-evaluate what is important in life, according to recent research by Accenture. The same study reveals that 49% want companies to understand how their needs change during disruptions and address these needs. What’s more, 38% of people expect brands to take more responsibility for motivating them and making them feel relevant, rather than just doing their business.

When it comes specifically to hotels, new travellers place a premium on safe and sanitary environments, flexible and no-penalty booking policies, convenient customer service, sustainable products and a positive social impact. Many say they are willing to pay extra for these options and switch to a different travel provider (hotels, airlines, travel agencies and OTAs) if needed. In fact, 45% of consumers say that they are considering moving away from the travel provider they use, either completely or in part, over the next six months to a year.

Rise of the new leisure traveller

Leisure travellers with these new motivations will be a significant force driving travel demand in 2022 – a marked shift that began in 2021 – after years of business travel being the staple of the global travel industry. With corporate travel policies still in flux, leisure travel will continue to recover faster in 2022, driving the hotel demand landscape. According to analysis by Kalibri Labs, throughout 2022 leisure hotel spend will return to 2019 levels, but business travel will struggle to reach 80% of 2019 levels. This means the share of hotel spend by type of travel will continue to be inverted from pre-pandemic levels; in 2019 commercial travel made up 52.5% of industry room revenue and in 2022, it is projected to represent 43.6% now. In fact, projections are that the summer of 2022 will be one of the strongest ever for leisure travel.

Many hotel business models have been primarily focused on business customer needs, such as on-site dining, laundry services, exercise facilities and business centres. The amenities that leisure travellers expect, such as spas, pools and easy transportation to top tourist spots, have often been a secondary focus. As such, these hotels will need to make structural changes in how they attract and retain leisure customers. Compared with business travellers, leisure travellers want more guidance through the booking process and more information about the destination. They spend differently than business travellers. It is less about specifics and convenience and more about adding services on the fly after the initial booking, in the spirit of discovery and adventure. Delivering for leisure travellers will take on added importance because there will be more of them in 2022.

The new face of business travel

While business travel demand will lag behind leisure travel, it is not a thing of the past. This is especially true in the US, the world’s most popular business travel destination. Business travel overall in the US is expected to increase in 2022 compared with the previous year and, according to an analysis by Kalibri Labs, by Q3 it is projected to reach 80% of 2019 figures. While a full recovery is not expected until 2024, global business travel is projected to increase by 14% in 2022, with the US and China seeing the largest upswing of 30% projected growth.

With large-managed corporate travel down – and likely never to come back exactly as it was before the crisis – small and medium-sized enterprises (SMEs) will lead the way in business travel’s 2022 recovery. This continues a trend that began in 2020, when the volume of SME travel was down, but not to the same extent as the rest of business travel during the height of the pandemic.

Leaders across hotels, airlines, car rental suppliers and travel management companies have indicated that their SME accounts came back relatively quickly coming out of 2020, and are continuing to outperform corporates today. They attribute this to the fact that smaller companies started to return to the office faster, and as part of this, put their people on the road sooner. They also believe that SME travel is buoyed by fewer travel restrictions and more flexible travel policies. These leaders are seeing growing demand from smaller consulting agencies, law and accounting firms and retailers, and expect more of the same into 2022.

The SME sector represents an upside opportunity for hotels to fill midweek occupancy and balance highly anticipated leisure demand patterns. This is a largely untapped market – one that was often squeezed out by the largest corporate negotiated segment. For hotels to take full advantage of this opportunity, it will be important to establish contacts with prospects and understand the needs of this segment. Speed and convenience will likely continue to be important, but SME business travellers will certainly focus on health and safety issues more so now than before.

Technology trends to watch

Technological advancements are playing an increasingly important role in allowing the hotel industry to respond to travellers’ changing needs and preferences. The biggest technology trends expected for 2022 and beyond are listed below:

¦ Keeping it human with technology: The personalisation of technology will take another leap forward, with hotels using digital technologies to ease workloads and further satisfy each individual guest with a unique guest experience. This includes everything from food and beverage options and flexible check-in and check-out times, to expanded room bandwidth for all traveller segments. While luxury hotels are especially known for service defined by a personal touch, hotels of all types will use more technology tools that help them gain an understanding of customers, progressively enhancing guest experiences and meeting or exceeding established service standards.

¦ Remapping the guest and staff journeys: Mobile self-service devices are allowing guests to navigate the traditional guest journey much more efficiently – from booking to checkout – without having to interact directly with staff. As a result, hotel employees are spending less time on tasks, such as processing check-ins, and can pursue initiatives that can make a greater impact on customer service.

¦ Shifting in-house technology solutions: For years, larger hotel chains have had in-house teams developing their own property management and central reservation systems. But a lack of integrations, compatibility issues, and compliance problems – along with the cost of keeping these solutions relevant and agile – creates challenges for in-house teams. With many hotel groups restructuring during the pandemic, and an industry-wide focus on recovery and growth, more hotels will move from in-house tools to ‘off-the-shelf’ offerings from industry vendors. This shift will not only reduce operational costs, but also improve service offerings to employees and guests.

¦ Expanding the use of agile PMS: Property management systems (PMS) are the hub of hotel operations. With near exponential growth in the apps that ‘hang’ off the PMS, fast, simple, and low or no-cost integrations are a necessity for continued innovation and an efficient technology ecosystem. No PMS provider can meet the demands of every hotelier. As a result, hotel operators will increasingly turn to a PMS solution that has a growing network of integration partners that offer expanded capabilities.

Source: American Hotel & Lodging Association