Much has changed for hotels over the past few years, with some trends that were introduced during the pandemic seemingly here to stay.
NB: This is an article from GuestCentric
In this article, we take a look at the challenges hotels are facing today, and outline a list of Hotel Sales & Marketing Tips you should implement to differentiate your business from the competition in 2023. Current market signals point strongly to a winter like 2019. However, as we have learned over the past few years, the market can change rapidly at any time.
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Due to factors such as inflation and rising energy costs, the industry has begun to speculate on what winter of 2022 and 2023 could look like. These concerns are as follows:
The Price of Air Travel
In summer 2022, we saw record-breaking prices for air travel, and due to pent-up demand, guests had little to no issues paying more to get away.
But with looming inflation and lower levels of travel during the autumn and winter months, it seems airlines in the US may reduce prices to stimulate demand. Early data published by travel app, Hopper at the end of August 2022 shows that domestic airfare in the US has already dropped by 37% following the peak summer period.
In Europe however, flight prices seem set to rise. According to a recent article published in the NL Times, ticket prices to fly within Europe will likely increase this winter due to rising fuel costs, as well as fees and tax hikes. “We expect price increases of between 10 and 20% in the winter as a result of the flight tax, the sharp increase in airport charges and more expensive kerosene,” said Marnix Fruitema of aviation representative organization Barin told the newspaper.
A somewhat longer distance trip to the Canary Islands or Cape Verde will be about €100 more expensive this winter, and about 50 to €60 more expensive next summer. “This means that travel is becoming more expensive, while purchasing power is falling. The consumer will take a step back,” said Corendon’s Steven van der Heijden to De Telegraaf.
We have yet to see what the knock on effect of pricing will be in terms of demand and hotel pricing during the winter period in 2022 and 2023.
Hotel ADR in Winter 2022 to 2023
Currently, we are still seeing significantly high levels of demand in the foreseeable future, currently around 25% above 2019 levels. However, as is the nature of the season, we realistically expect demand to taper off somewhat. When this happens in cities and hotels become more competitive, the big question is how this will impact ADR.
At this stage however, it seems pricing is likely to hold and perhaps even increase over the next 12 months, according to our Hotel Business Barometer results published in the September 2022 edition of The Hotelier PULSE Report.