Is it finally time to move past the pandemic?
Nearly four years since the pandemic first began, one question that has been asked ad nauseum is whether the travel and hospitality industry is fully back on track. Hotel owners and operators, airline brands, and dining franchises all saw an uphill climb when faced with pandemic-specific challenges – many of which included restrictions on travel, reduced demand for tourism, and financial difficulties, just to name a few. However, there have been significant notable developments in the industry as a whole and everyone is wondering if it can all finally be put behind us.
Though the industry rebounding seemed like far from a forgone conclusion – especially in the earliest days of the pandemic – the general consensus from industry experts and ongoing research is the travel industry’s recovery is complete and growth remains strong. Many challenges the industry faces either predated the pandemic (labor) or would have happened regardless (AI).
In tandem with the return of guests in substantial numbers, the travel and hospitality industry has actively been working on recovery strategies, including the acceleration of its digital transformation. Online bookings, contactless check-ins, and digital health passports are on their way to becoming standard practices, enhancing the travel experience across the guest spectrum. In addition, many hotel owners and operators have excelled at staying up-to-date with the latest industry trends and adopting new strategies as needed.
WHAT’S WORKING?
According to a recent industry report, The State of Travel 2023, the global travel industry appears to finally have regained its footing with performance levels surpassing those of pre-pandemic levels. Travel is indeed back on track with many of the pandemic-induced woes a mere memory. And sure, sales had already surpassed pre-pandemic levels in 2022, but has the industry finally turned a corner leaving all pandemic-related challenges behind?
As we approach the end of 2023, sales, bookings, and ad spending have nearly reached or exceeded their pre-pandemic levels. The travel industry’s booming recovery from its 2020 lows will continue into 2024 with a particular focus on digital travel bookings. Digital travel sales are expected to reach record number resulting in the travel industry digital advertisers spending more. Digital ad spending was expected to grow by 14.3 percent this year. This will be the third year in a row travel advertisers will increase spending more quickly than any other industry and is expected to happen again in 2024.
Specifically for hotels, several industry reports estimate hotel revenues will fall just one percent shy of 2019 levels, compared to eight percent lower in 2022. Overall demand is still below pre-COVID levels, but it’s expected to increase with expanded options for international travel.
WHAT REMAINS?
It’s not all sunshine and rainbows, however. A key concern centers on the ongoing workforce shortage. This challenge predated COVID-19’s arrival, but it has only been exaggerated now that many of the once-furloughed workers have moved to other industries and the industry has struggled to attract new employees. Properties with a healthy workplace culture largely are weathering the storm better than their competitors, but nearly every hotel surveyed in most reports indicate ongoing difficulties with hiring.
What other pandemic-related fallout continues to loom large over the industry? The good news is challenges are fewer and farther between than even a year ago. Though it’s not nearly as noticeable as in the early postpandemic days, research indicates lingering pent-up demand for travel is still present to a degree. In addition, travelers are willing to spend more – often called “revenge spending” – is expected to extend into another year.
After the pandemic, flexible work continued at most companies allowing travelers to blend leisure and business travel. Working remotely allows corporate professionals to pack their laptops and sign on to work from remote locations. However, as more businesses and offices are returning to in-office work again, some experts are predicting a slowing of this trend in the coming year.
On the flipside, many businesses report reevaluating their travel budgets, considering ramping up business-related travel. Many employees were hired at companies two years ago and have never met their coworkers in person. Corporate businesses are realizing this and reconsidering the importance of group events and in-person interactions.
WHAT’S NEXT?
As the industry looks to finally put the pandemic in the rearview mirror, industry professionals are identifying other challenges on the horizon. Things like financial uncertainty, climate change, and the aforementioned labor shortage are all obstacles travel and hospitality professionals are working to address. In addition, the widely reported financial challenges younger travelers face – such as merely paying rent vs. booking a vacation – appears to be a considerable obstacle for years to come.
Those hearty enough to withstand the demands of operating a hotel in today’s economy have proven themselves more than up to the challenge time and again. While those challenges are going nowhere anytime soon, the industry is largely on solid ground. Travel is back.
How to SURVIVE and thrive
Truth be told, many hoteliers were understandably ready to expunge the term “pandemic” from the world’s collective vocabulary about five minutes after the lockdowns began. While we’re certainly – and finally – in a new era of travel, there remain lessons to be learned from COVID’s long shadow over the industry, including the need to continually adapt to and implement emerging technologies. From the guest-facing perspective, here are four best-practice solutions every hotelier should consider with the goal of ensuring their properties are as welcoming to guests as possible, in the digital realm at least.
1. INVEST IN YOUR WEBSITE
Research consistently shows those booking travel prefer using their computers when making high-priced decisions. With $184 billion of digital travel sales coming from a desktop or laptop, it’s crucial hotel operators ensure their booking platforms and websites are easy to navigate and user friendly.
2. BE MOBILE-FRIENDLY
Although more travelers make high-priced decisions from a laptop or desktop device, an estimated $112 billion of digital travel sales come from mobile devices. Similarly, research shows a majority of travelers also use their mobile phones when researching upcoming trips, so it’s imperative hotel owners create a seamless omnichannel customer journey for guests.
3. AI INVESTMENTS
By now, hospitality should be no stranger to AI. However, generative AI is a relatively newer concept and shows potential for improving guest experiences via chatbots and predictive travel planning.
4. EMERGING SOCIAL MEDIA PLATFORMS
Travel-themed content is overwhelmingly popular on newer forms of social media. The travel vertical on TikTok is thriving with about 34% of travelers reporting having booked a trip due to the platform’s influence in 2022. These short-form videos guide customers through all stages of the customer journey – starting from the discovery and research phase all the way through to decision-making and purchasing.
Through innovation and digital transformation, the industry is constantly prioritizing the guest experience and looking for ways to bring people together and make a positive impact. As we turn a corner leaving many pandemic-related challenges behind us, it’s now time for industry leaders to stay in tune with not only upcoming challenges but ways to continuously innovate and improve the travel and booking experience for everyone.
