In one important way, the US hotel industry has put the pandemic in the rearview mirror with mid-December room occupany at 54.5%, up 9% from the equivalent week in 2021.
The average daily rate or ADR is up a healthy +23% to $135.08 and revenue per available room up even more at +35% at $73.65, assisted by overall inflation.
The three of these metrics together suggest 2023 will be a solid year for the industry with pent-up travel demand and the desire to see friends and family still layering back into the market.
PwC Hospitality Directions predicts continued but slower growth due to the uncertain economic climate hampered by high interest rates.
Luxury and upscale properties saw the biggest gains RevPAR growth and are expected to see the largest gains again in 2023.
Weather impacts
The December major snowstorms flooded airport hotels with stranded passengers waiting to get out of their airport, an effect which was particularly noticeable near airports served by Southwest, which had the most significant portion of canceled flights.
A survey of consumers shows a welcome shift in interest from short-term rentals back to hotels
- Interest in hotels rose from 51% in July to 56% in November.
- Interest in short-term rentals declined to 12%, the lowest recorded response during the pandemic.
The post-pandemic traveler is attracted by the urban location of hotels which are closer to events and attractions that are again being held. Respondents also noted their interest in better cleaning standards in hotels and more flexible cancelation policies. Also, hotels are better for short-stays vs. the unit cleaning charges added onto short-term rentals.
This trend reversal is something Milestone predicted as short-term rental demand boomed.
Gas Prices
Decreasing gas prices will help improve occupancy for drive distance travelers.
The increased value of the dollar suggests US travel abroad will be stronger in 2023, but that foreign leisure travel to the US will be weaker.
The return of business travel
The Global Business Travel Association expects more recovery and growth for 2023 compared to this year.
78% of travel managers expect the number of business trips taken by employees at their company will be higher or much higher in 2023 versus 2022. Among travel suppliers, 85% expect the number of bookings by corporate clients will be higher or much higher in 2023. Additionally, 80% of suppliers expect travel spending by corporate clients will be higher or much higher in 2023 year over year.
Over 65% of travel managers are optimistic that their company will conduct more internal travel and external travel. Internal travel was defined as meetings with colleagues or working at other company office locations, while external travel examples are trips for sales meetings and conference travel. “
Events are above 2019 levels
According to Knowland’s November U.S. monthly meetings and events data, the sector achieved 103.1 percent of November 2019 volume, exceeding monthly prepandemic levels for the first time. Volume for the month was up 122.5 percent over November 2021.
Remote work is a developing opportunity for hotels as teams will develop a new need to meet face-to-face, since many do not work regularly in an office.
The team at Milestone can help you create the site experience that will draw in your customers and find the best promotions for your brand. Plan your 2023 success now.
To know more about how Milestone can assist with your hotel marketing, contact us at [email protected] or call us at 408-200-2211.
