Hospitality Industry Following Airlines into Era of High Demand

Hospitality industry numbers are seeing some welcomed black ink these days, with consistently high occupancy rates and nightly prices to match, just as airlines are flying full and seeing no slowdown in the demand they service. That can a little bit of a mix bag for travelers. It’s amazing to be moving again at a speed that is at least as fast as it was in the days before the pandemic. But in these final days of travel chaos, hotel customers might not be getting the amenities and services they paid for. 

In order to determine how well the hospitality industry sector is doing and whether passengers are as upbeat about expanding their travel plans as the business seems to be, the American Hotel & Lodging Association (AHLA) teamed up with Morning Consult. 

Hospitality industry

Unsurprisingly, 60 percent of Americans say they plan to stay in hotels more this year than they would in 2022. The future of travel and lodging in hotels for work or pleasure is definitely bright, especially for business travelers: 

According to 51% of business travelers, the proportion of workers who are expect or encourage to travel for work is the same as it was before to the epidemic, while 20% say it has increased. 

While 20% of business travelers claim that the average length of business travels has increase, 53% think that it has been constant since the outbreak. 

Also While another 20% report that it is more than before, 52% of business travelers say the number of business trips now anticipate or support by their employer is the same as before the pandemic. 

52 percent of business travelers claim that the amount of travel expenses that their employer will now cover is the same as it was before to the epidemic, while another 18 percent claim that it has increased. 

In addition, 45% of business travelers anticipate making more business trips in 2023 compare to 2022, and 48% of those travelers extend their business visits to include leisure activities. According to the report, 84 percent of business travelers are now very interested in the benefits of “bleisure” travel. 

Americans Planning And Hotels

“With Americans planning for more hotel stays this year and business travel moving in the right direction, AHLA’s Hotel Booking Index is a cause for optimism,” said AHLA President & CEO Chip Rogers.

In the United States, the hospitality industry expects the average hotel occupancy rate to rise to 63.8 percent in 2023.

Yet, staffing issues have persist in U.S. hotels even as bookings soar and comprehensive travel plans solidify. A staffing shortage was mention by 79 percent of hotels who respond to an AHLA poll conducts in January 2023, with 22 percent categorizing the problem as serious. 

The hospitality industry saw more than 682,000 job losses in a single year as the pandemic decimate employment levels, dropping them from 2.4 million in 2019 to around 1.7 million in 2020. The inability to fill important roles is currently the most common issue among hoteliers, even though employment levels are gradually increasing. 

In 2020, there was a sharp reduction in travel demand, which had a chilling impact on tourist destinations because falling hotel profits meant reduces taxes and less funding for public-private partnerships to promote tourism. In addition to supporting more than 7.6 million jobs and job training across the economy in 2023, state and local taxes generated by the hospitality industry are projected to total $46.71 billion. 

Hospitality Industry: Plumping the Covers

Overall, according to recent hospitality industry surveys, hotel operators are changing how they will do business over the coming years, but these changes don’t seem to herald a return to the year 2019. Between now and 2025, a significant service model shift is anticipate, and according to 81 percent of hoteliers question, it would probably resemble Spirit Airlines a lot. 

The majority of those hoteliers—about 49%—strongly concurre that adding extras and upselling are essential components of their revenue plan. This might the case since guests these days seem receptive to new pricing schemes that provide them more options throughout their stay. More than half of customers from around the world (54%) stated they would prepare to pay more to choose their view, 38% to choose their room, and 32% to choose their room floor, according to a recent Oracle Hospitality/Skift consumer and hotelier study report. 

Hospitality Industry

The hospitality industry business model encourages the selling of ancillary products or services like extra amenities and more specific in-room preference marketing, enabling each visitor to select or customize their perfect experience. And this idea is not brand-new. But, 2023 might bring about some new levels and offshoots in terms of the amenities that visitors are prepare to pay for and how they can be uses to generate extra income. 

This unbundling is base on personalization and employs the cloud, analytics, and artificial intelligence (AI) to gather, comprehend, and operationalize data regarding visitor preferences and behavior. 

“We’re always trying to think of new ways to give people the experience they want,” explained Dave Van Saun, director, ancillary revenue at Great Wolf Resorts, noted in a summarizing report by Oracle. “The way this manifests in revenue management is in offering different fare types, bundle offers, passes, and more…We’ve always had a focus on ancillary revenue and have seen it as a good growth opportunity, but the pandemic allows us to double down. Getting a guest who has already paid for a room to spend more to have a better experience is a win-win and delivers high-margin revenue.” 

Junking the Fees

This training is being offers at a time when the Biden administration is pressuring the hospitality industry to stop hotels from charging “junk fees,” or amenity costs (as oppose to discretionary “service fees”) that are frequently added without giving guests a choice or being transparent. 

“AHLA will continue to work with the Biden Administration, the FTC and lawmakers on Capitol Hill to ensure a level playing field around transparency for mandatory fees, such as hotel resort fees. These fees provide guests with value and include various unique goods and services at each property that charges them,” Rogers said in a published statement. 

According to a 2022 OTA Insight analysis for AHLA, only 6% of hotels nationwide impose a mandatory resort (also known as a “destination” or “amenity”) fee. However, other hospitality industry surveys show that resort fees across the nation average $42.41, accounting for more than 10% of a visitor’s total nightly hotel expenses