5 Summer Trends for Hotels in 2023Reading Time: 4 minutes
Despite the current economic landscape, exponential levels of revenge travel in summer 2023 continues unabated. But although travel demand is showing no signs of slowing down, consumers are changing the way they travel to meet their current circumstances. Following the pandemic, responsible travel continues to be a critical factor when booking trips, and pricing across European hotels remains above pre-pandemic levels, and lower in the US.
What else is in store for hotels in summer 2023? Below are 5 top trends we have identified for hotels this peak season:
1. Travel Demand is Booming from July to September
Data generated from Guestcentric’s portfolio of hotels shows that travel demand is looking strong from June until September 2023. According to the analysis released on June 25, 2023, pickup this month is now up 23% vs June 2022. Hotel bookings for July currently represent 87% of 2022 levels, while bookings for August and September continue to accelerate.
Furthermore, consumer data recently published by Real Research shows that 87% of people worldwide plan on traveling this summer. Flight searches are also up 25%, according to Expedia, while Airbnb announced that guests have already planned stays in over 72,000 cities and towns over the summer.
All of this indicates that the revenge travel trend is holding strong, and is expected to continue until the end of the year. Consumers still seem to be making up for lost time, and hotels should be prepared to adapt accordingly.
2. Summer 2023 Direct Bookings in line with 2022 Levels
In 2022, direct bookings grew by a whopping 50% over pre-pandemic levels (benchmarked at 2019). Our latest market data (generated in June) shows that direct bookings for summer 2023 align with 2022 levels, but continue to significantly outperform all other channels’, including Booking and Expedia. Guests are still reaching out to guests directly, and thus hotels have the opportunity to convert these enquiries into more direct business for their hotels.
3. Portugal is one of the World’s Top Hot-Spots, with Special Focus on the Azores
According to the latest Travel Industry Trends 2023 study released by the Mastercard Economics Institute, Portugal is the eighth preferred destination for European tourists in 2023. The study concludes that European tourists are opting for proximity destinations, which may be driven by the current economic climate.
The number of US visitors to Portugal has also grown significantly, and according to figures published in TravelPulse, the US currently represents Portugal’s fourth most significant market in 2023. During just the first few months of 2023, the increase in US visitors to Portugal has continued unabated. For just January through February, the number of US visitors to Portugal increased 26% over 2019 figures.
Of the regions expected to be most visited this season, the Azores is fast becoming a summer destination. Currently, bookings in July have doubled in comparison to May 2023, with the highest ADR growth of 33%. Other regions performing significantly better in comparison to 2022 include Lisbon and Central Portugal. Long considered a global hot-spot for tourists across the globe, the Algarve unsurprisingly also showed strong performance in June 2023 vs 2022, with a 12% increase in occupancy and 3% increase in ADR.
4. ADR Increasing in Europe and Declining in the US
Average Daily Rates (ADR) and pricing reached record levels in 2022, especially in Europe. According to data from Guestcentric’s portfolio of hotels, released in June 2023, ADR for hotels across Europe is currently 13% above 2022 levels. However, in the US ADR is trending downward, and currently 5% below 2022 levels.
5. Sustainable Travel will continue to be Significant
Recent years continue to amplify the importance of sustainable travel, not only for individuals but particularly corporate groups. In fact, research by Great Hotels of the World shows that in all cases where corporate clients turned down proposals from hotels, the first reason provided was non-compliance with the client’s sustainability criteria, as opposed to other critical factors such as price, availability, or insufficient pricing seasons.
In Europe, large companies and SMEs are already required to collate data in order to report on their sustainability initiatives from 2024 onwards, by defining KPIs and how these are performing year-on-year. Their supply chain – including hotels – has to follow, by demonstrating that they are also actively working towards reducing their carbon footprint and improving their communities and employees’ welfare. Therefore, hotels must demonstrate to these companies that they are economically, socially, and environmentally sustainable.
All of this goes to show that sustainability is no longer a nice to have for hotels, but a critical factor that will directly impact your business profitability. Hotels should be putting initiatives in place, and actively measuring them.
How can Hotels maximize Summer 2023 Travel Demand?
Given that direct bookings continue to perform well and are preferred by guests, hotels should continue to prioritize and invest in improving their direct booking channels. This can be achieved by optimizing their website’s user experience, or offering exclusive perks or discounts for direct bookings.
With the increasing importance of sustainable travel, hotels need to demonstrate their commitment to sustainability practices. This includes implementing eco-friendly initiatives such as energy and water conservation, waste reduction, and promoting local and organic products. Hotels should communicate their sustainability efforts transparently through their website, social media, and in-room materials.
These best practices will enable hotels to capitalize on the current travel demand, cater to the preferences of guests, and align with sustainability trends. By adapting to these trends, hotels can enhance their competitiveness and position themselves as preferred choices among travelers in Summer 2023.