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7 Hotel Insights to be Optimistic about in 2022

February 22, 2022 5 min read
Hotel Insights in 2022 blog cover image, showing two men in suits and suitcases jumping for joy.

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7 Hotel Insights to be Optimistic about in 2022

Reading Time: 5 minutes

Following the ever-changing and uncertain events of the past 2 years, 2022 is set to mark a major comeback for the travel industry and hotels worldwide.

A recent study by Guestcentric, which analyzed thousands of hotels within the company’s portfolio, shows that demand is back with a vengeance. The data indicates that bookings for the first 6 months of 2022 have vastly outperformed the same period in 2021 in terms of bookings. Thus, Hoteliers can expect to experience significantly higher occupancy levels in the first half of this year.

So without further ado, and based on the results of this study, I share 7 hotel insights to be optimistic about in 2022.

7 Hotel Insights to be Optimistic about in 2022

As more destinations worldwide reopen for travel and cast aside the disruptive restrictions that have challenged the industry for nearly two years, travel confidence is booming. Hotels are set to make a major comeback in 2022, begging the question: Could this be the new record-breaking year for the industry?

Read these 7 Reasons for Hotels to be Optimistic in 2022, and decide for yourself:

1. Direct Bounced Back in 2021

Although Covid really hit hotels hard in 2020, and continued to disrupt the industry over the course of last year, the good news is that direct channel revenue nearly reached 2019 levels in 2021. According to recent data generated from Guestcentric’s portfolio of hotels, direct revenue reached 56% of total market share by the end of 2021.

Hotel Insights 2022 Graph - Direct Bookings in 2021 vs 2020 and 2019

Furthermore, the same research shows that more guests who booked direct converted into check-in nights when benchmarked against 2019 levels. This shows that more guests who booked direct, in comparison to other channels, did not cancel or defer their bookings in 2021.

Thus, we are confident that 2022 is set to be the best year ever in terms of direct revenue.

2. Demand is Back in 2022

In just the first six weeks of 2022, hotel bookings rose rapidly to the highest levels since the start of the pandemic back in 2020. By the second week of February 2022, hotel bookings reached over 94% of those over the same period in 2019.

Hotel Insights 2022 Graph - Showing increased demand in 2022 vs 2021 and 2019

This strongly indicates that demand is back with vengeance, and hotels must be prepared to deal with an onslaught of guests who are eager to travel and enjoy life following the past two years.

3. Occupancy could exceed 2019 levels in 2nd half of 2022

As of January 25, 2022, on the books stays for the first 6 months of this year have vastly outgrown those over the same period in 2021. Currently, hotel bookings for the first half of 2022 represent 73% of 2019 levels. Thus, the occupancy expectation for this period is currently five times higher than what it was back in 2020.

Hotel Insights 2022 Graph - Showing how occupancy is expected to outgrow 2019 levels in 2nd half of 2022.

On an even better note, our data also shows that hotel bookings for the second half of 2022 are currently a whopping 20% above 2019 levels. This clearly shows that guests are eager to travel and book again. Provided that there are no new restrictions, it is extremely likely that this demand will convert into tangible revenue for hotels in 2022.

4. Pricing is through the Roof

Despite the economic fallout of the past two years and rising inflation, upscale hotels are benefiting from the lion’s share of pent-up travel demand.

Hotel Insights 2022 Graph - Showing ADR growth in 2022 vs 2021 and 2019.

In fact, our data also shows that guests across Europe and the US are booking more upscale hotels and paying for more expensive travel experiences in 2022.

5. Cancellations are Back to Normal

On average, based on our historical data, cancellations are typically around 24%. In 2020, cancellations rose through the roof, and remained twice as much as normal levels throughout the year.

Although cancellation rates improved slightly in 2021 following the winter period, new variants and waves of restrictions at the start of summer and toward the end of the year led to fluctuating cancellation levels.

Hotel Insights 2022 Graph - Showing how cancellations have returned to normal levels in 2022.

In 2022, cancellation rates have returned to normal levels. If this persists uninterrupted by restrictions, then hotels can certainly count on 2022 being a much better year than 2021 in terms of revenue.

6. Corporate Travel expected to Bounce back in 2022

In January 2022, our data shows that GDS bookings are now four times the level of those over the same period in 2021. Currently, GDS bookings represent approximately 50% of those over the same period in 2020 and 2019, prior to the pandemic. This strongly suggests that corporate travel is expected to bounce back in 2022.

Hotel Insights 2022 graph - Showing how GDS demand is bouncing back in 2022.

Major analysts also share this expectation for corporate travel in 2022. In fact, earlier this year Citibank announced that they upgraded shares of Lufthansa to ‘buy’. This move was driven by their expectation that long-haul airlines will benefit from, among other travel developments, the recovery in corporate travel.

7. Hotels are Confident Travelling in 2022

Not only are consumers confident about traveling again, but more hotels are also hitting the road in the 2022 to meet buyers and investors.

In fact, our member hotels at Great Hotels of the World have already performed two events with meeting planners and corporate buyers in the UK in January 2022. Provided that market conditions remain stable at least until winter 2022, we expect much more to come throughout the remainder of the year.

Conclusion

As you can see above, there are many reasons for hotels to be optimistic in 2022. Namely, the direct channel bounced back significantly in 2021 and is set to have the best year ever in 2022.

Furthermore, travel restrictions are being lifted all across Europe. The EU has agreed that there will be no more testing or quarantine requirements for travelers who hold digital travel certificates. The UK will also drop testing requirements for fully vaccinated travelers from February onward. Meanwhile, the Netherlands, France, and Denmark are also doing away with mask mandates and other domestic restrictions.

After two years, it’s fair to say that the industry is returning to some sense of normality. Most of the world’s population has either recovered from Covid-19 or has been vaccinated to prevent serious illness, and therefore, the world is reopening again .

All of this strongly suggests that the hotels have the foundations and context to benefit from a great 2022. Let’s make this year a major comeback for our industry!

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