With macroeconomic and geopolitical headlines continually ominous, questions are surfacing about their potential impact on the upcoming holiday travel season.
New data is surfacing from Deloitte and PwC, while at the same time HAMA, the hotel asset managers association, just offered its take on the current state of the hotel industry. HOTELS synthesizes it for you here and links to the more complete reports.
Deloitte released the findings of its 2022 Deloitte Holiday Travel Study and found travel demand is slowing, with less than one-third (31%) of Americans planning to travel between Thanksgiving and mid-January, down from 42% in 2021.
Of those who plan to travel this season, 15% plan to travel on Thanksgiving weekend, and 14% plan to travel between Christmas and New Year’s.
Of those planning to travel, 3 out of 4 plan to spend the same or less than they spent in 2021. This year’s average holiday travel budget (including transportation and lodging costs) will reach US$1,287.
Over half (59%) of holiday travelers plan to stay with friends or family. Just over a third will stay at a hotel (35%, down from 37% in 2021), and 15% will book a private rental (down from 17%).
Due to flexible work arrangements, 26% of travelers intend to work on their longest trip of the holiday season. Those who do plan to work during vacations continue to take more trips (2.4 vs. 1.6 for disconnectors). Laptop luggers are adding over a week (eight days) of travel this holiday season due to the ability to work remotely.
The outlook is brighter when considering PwC’s Holiday Outlook 2022 report with almost 75% of consumers planning to spend as much as — or more than — they did last year, with millennials leading the way.
As to where they will stay, 45% say branded hotels (same as 2021); 46% choose family and friends (up from 42% last year); 26% will stay at independent hotels (up from 20% a year ago); 21% will choose short-term rentals (18% last year); 19% are staying at all-inclusive (up from 13% a year ago).
Online booking sites are the most popular way to book travel, with 45% of travelers — and almost 60% of traveling millennials — using them for holiday travel.
Air travel is picking up again with almost half of travelers — 46% — planning to fly, up from 40% in 2021 and 33% in 2020.
At an average of US$2,441 this holiday season, bigger spenders will spend upwards of US$1,000 more than the average consumer. Here again, millennials lead the way, with 63% planning to travel.
But how does this holiday travel data mesh with how asset managers are feeling about the state of hotel affairs?
The Hospitality Asset Managers Association (HAMA) just released the results of its Fall 2022 Industry Outlook Survey from 68 hotel asset managers who forecast that their properties will exceed 2022 budgeting targets.
Moreover, the acquisition market seems to be heating up, as well. “Shy a black swan event, 2023 already is shaping up to be a strong year for the hospitality industry,” said Matthew Arrants, The Arrants Company, CHAM, HAMA president.
Highlighted results include:
- Approximately 60% of respondents believe most of their portfolios (75%-plus) will exceed 2022 budgeted RevPAR.
- Nearly half of the participants expect 75% to 100% of their portfolio to exceed 2022 budgeted GOP.
- Asset managers currently are most concerned about labor availability (86.76%), labor costs (85.29%) and demand (42.64%).
- Just under 50% believe industry RevPAR levels as a whole will return to 2019 levels by 2023, while approximately 40% predict it will occur in 2024.
- Roughly 80% of those surveyed actively are seeking acquisition opportunities.