Hospitality Industry Trends to Know as You Prepare Your 2022 Budget
Ready or not … here come the guests. After the hospitality industry was battered and devastated by the worldwide pandemic in 2020, sending occupancy rates tumbling to record lows and forcing the closure of many hotels, a return to normal — or the ‘new’ normal, at least — has arrived, and travelers are eager to get away.
By June 2021, more than 2 million passengers went through TSA security checkpoints at U.S. airports, inching toward pre-pandemic numbers from 2019. While the travel industry is still pushing toward pre-pandemic levels, the mid-2021 numbers provided a sigh of relief after airports saw a staggering pandemic low of 87,534 passengers go through security on a single day in April 2020 shortly after the start of the pandemic.
According to the American Hotel & Lodging Association, hotel room occupancy is expected to reach 52.5% by the end of 2021. In 2022, the hotel industry is expected to hit 61.4% room occupancy and sell 1.23 billion rooms, nearing 2019 numbers. STR and Tourism Economics upgraded their forecasts by summer 2021 and projected hotel demand to fully recover by 2023 and revenue per available room (RevPAR) to reach full recovery by 2024. It turns out, being isolated at home had a big impact on the travel ambitions of people around the world. Booking.com found that 64% of respondents regarded travel as more important to them now than before the pandemic.
As the hospitality industry rebounds, there is no shortage of excitement for the next vacation. But hospitality marketers must be prepared to adapt their marketing efforts and strategies to the new trends that will carry into 2022.
The slow return of business travel
Even midway through 2021, airlines said corporate business travel was still 70% or more below pre-pandemic levels. The AHLA projects that business travel won’t return to 2019 levels until 2024 and some experts are pessimistic about business travel ever fully returning as companies get used to Zoom meetings and cost savings.
According to the Global Business Travel Association (GBTA) though, 40% of respondents said their company’s plan to resume non-essential domestic business travel has ‘already happened.’ Meanwhile, 53% of the people said they expected their sales and account management trips to reach pre-pandemic levels in less than one year while another 28% said they would return in less than two years.
Marketers must adapt to the change in audience while still being prepared for an uptick in conferences and business guests in 2022. Hotels should be cognisant of the need to continue to target leisure travel through channels such as metasearch and pay-per-click advertising. That doesn’t mean business travel should hit the backburner. Pre-pandemic levels for business travel may take months, but the tick upward will begin in earnest in 2022. Both advertising and email marketing can help your hotel be proactive in reaching business people so they know you’re ready to host their next conference.
The rise of the bleisure traveler
Ready for a term that’s taking off? Bleisure. Marriott says it is seeing a strong increase in ‘bleisure’ travel as business people combine a work trip with leisure, extending their stay to get away and explore following the pandemic. Just as the home/office boundary has been blurred, a traveler’s trip purpose is now sometimes doing the same and marketers must be prepared with unique strategies.
“Increasingly we’re seeing folks that say, ‘I can blend trip purposes. I can combine leisure with business travel,’” Marriott CEO Tony Capuano said on CNBC. “And we think that’s really good news for our hotels across the country.” Marriott, in fact, began offering its Work Anywhere packages to market to this segment.
According to Expedia, 60% of business trips in 2018 were extended for leisure purposes. The bleisure trend has been picking up, but the post-pandemic world is expected to accelerate it. Soon, the purpose of a guest’s trip might not be as simple as vacation or work. The answer might be ‘both.’ What does that mean for your hospitality marketing efforts? Business people are now interested in more than fast Wi-Fi, workspaces, and flexible cancellation policies. Your hotel’s digital marketing strategy should have a unified message that ties in both your business amenities but also the flexibility of enjoying your restaurants, entertainment, and more.
Domestic and late-booking travelers
Now more than ever, hotels should be thinking local—or at least domestic. In early 2021, TripAdvisor found that 70% of clickers were still booking domestic trips. A combination of travel restrictions and a desire to travel by car shifted the domestic-international balance and it will be some time before that trend shifts. The rise in staycations and local attractions is something marketers should note. As room occupancy ramps up, it’ll start close to home.
When it comes to your marketing strategy, staying on top of this trend can help in multiple ways when planning for 2022. First, by utilizing the data from your website you can see what geographic locations are driving both traffic and booking inquiries. From there, you can better map out your strategy and budget for ad spend. Second, the increase in last-minute bookings is also important to keep in mind. Tools like metasearch and Online Travel Agency (OTA) ads tend to drive more late bookings as they offer easy comparison and quick booking options for travelers. These are both must-haves when it comes to your hotel’s 2022 marketing mix.
A close eye on hotel cleanliness
In a survey from Skift and Oracle, the top three reasons listed for making a guest feel more comfortable with traveling in a post-pandemic world were:
- Increased frequency of cleaning and disinfecting procedures
- Guest areas/public spaces arranged for social distancing
- Contactless payment
According to the AHLA, 62% of consumers placed overall cleanliness in their top-three factors when choosing a hotel (up from 38% pre-pandemic), just after price and ahead of location. There is no doubt that hotels need to include cleanliness in their messaging. Email marketing became an important tool for hospitality marketers to communicate with guests during the pandemic and it will continue to be a key tool into 2022. Hotels can continue to communicate features like cleanliness through personalized email marketing, Google My Business listings, and social media.
After hospitality marketers were forced to tear up their 2020 marketing budgets and slam the breaks on campaigns just months into the year, many also entered 2021 working off scaled-back and tentative plans. Now, as the rebound presses on, it’s time to reflect on what marketing strategies make sense for your hotel and put together a 2022 budget that will help ensure your hotel is part of the rebound.
By understanding the trends in the constantly changing hospitality environment, you can ensure your marketing strategy aligns. Before getting sign-off on your 2022 marketing budget, think through important trends that will affect your hotel, what strategies can help your hotel reach its goals, and what it will take to get it done.