In this second post of the series we look at the state of business travel, how the luxury hotel segment is faring, the rise of alternative lodging, and which regions are leading the way when it comes to the resurgent demand for travel.
NB: This is an article from OTA Insight
To catch up on our first three trends, which included inflation, expenditure on experiences and the industry’s COVID hangover, click here and read on to see the four remaining hospitality and travel trends shaping 2023.
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4. Is business travel on its way back?
Another sector hugely impacted both in the short- and long-term by the pandemic was business travel.
The Meetings, Incentives, Conferences and Exhibitions (MICE) sector was cut at a stroke by lockdowns and huge growth in video conferencing changed the face of work forever. So, can we expect a comeback in 2023 or is the age of the face-to-face meeting over?
Once again, it’s an upwards trajectory, with our indicators pointing to continued positive growth, as are other industry bodies.
Extracting GDS searches, which are a critical business travel booking route, there is a clear trend line of growing searches, and therefore demand throughout the last two years that shows no signs of stopping as we head into 2023.
During peak season for MICE travel in mid-2022 search volumes for London and Seoul were 40 to 60 times what they were at the beginning of 2021, although this is coming from a very depressed base.
GDS hotel searches in major business travel destination, 2021 – 2022
Nonetheless, it indicates a return for businesses to booking travel and a vote of confidence in making face-to-face appointments.
Averaging out search demand trends across this selection of cities displays a clear and consistent upwards trend throughout the period, and as we close 2022, search volumes are at the highest level seen since the start of the global pandemic.
We are not alone in this analysis, as American Express’ 2023 Global Meetings and Events Forecast expects broad-based growth in global spend for business travel, rising by 3.1% globally. Once again North America is expected to be the most buoyant region, with growth in spend predicted to hit 3.8%.
5. A supercharged American rental market
Another area where North America, and the US specifically, is a market leader is in the vacation rental sector. Here reservations soared above pre-pandemic levels in 2022 according to our data.
As we closed out the year, demand in the country spiked to the point where double the reservations were made in the first week of December 2022 as compared to 2019, and over the last year only Latin America exceeded North America for reservation growth.
Weekly variation in US holiday rental reservations, 2019 versus 2022
While this comparative lead with other regions has narrowed across the year, and we predict that 2023 will be an extremely strong year for rental booking growth globally, the US is likely to continue to be one of the best performing markets.
Using a snapshot of 10 major metro markets in the US, we can see continued strength in pricing in the first half of 2023, which reflects strong demand and booking pace.
Only Miami and Orlando fail to consistently increase in price throughout 2023, which may reflect high seasonality in these destinations, and therefore it seems like the US rental market will enter 2023 as it concluded 2022.