For many hoteliers, things are looking up.
Based on my many conversations with General Managers, Sales Managers and other industry players this spring, it is evident that leisure travel continues to return, average fares are generally close to or at record levels and travelers are more willing than ever to upgrade to luxury accommodations. During these exchanges, a singular force is usually credited with driving this strong comeback: pent-up demand.
And it’s not just hotels. Vacation rentals, which have seen bookings surge amid the pandemic, are also benefiting from an overflow of travel enthusiasm.
According to data from a late April survey from vacation rental platform Vacasa, 63% of Americans plan to travel this summer, up from 59% in 2021, and 85% of those summer travelers say they plan to go on vacation. holidays more often than they did last year.
But what happens when summer is over and pent-up demand potentially starts to dry up?
Travelers may be planning trips at a brisk pace right now, but once they’ve crossed a major vacation or two off their to-do list, bookings could quickly return to a more measured pace. After all, the high levels of household savings achieved amid the pandemic won’t last forever, and with the threat of inflation looming, some may soon choose to cut back on travel spending.
Another survey in late April, this one from financial services firm Bankrate, indicates that travelers may, in fact, already be backing off.
Bankrate reports that nearly seven in 10 American adults who say they will take a vacation this summer are already planning to change their plans due to high levels of inflation. Among those surveyed, the top travel changes are taking fewer trips or traveling shorter distances, with just under a quarter of respondents saying they could opt for cheaper activities or accommodation and/or or cheaper destinations.
Likewise, in a recent phone call about rates, Kristi Marcelle, senior travel consultant at family-owned travel agency Ciao Bambino, told me that with the hotel skyrocketing all over Hawaii to Europe, some of its customers are offered a lower price than their desired accommodation, especially in the luxury and high end.
Those most likely to be disappointed, Marcelle says, are her “entry-level five-star customers”, who can become “seriously frustrated at not being able to afford the five-star options anymore”, as well as customers accustomed to four- star accommodations, which “are in a hurry” and also have to lower a price category.
At some point, or at a certain price point, a traveler may decide it’s not worth making the trip.
In fact, the rising cost of living, along with travel, seems to have eclipsed Covid when it comes to being a reason to hold on at home. The Bankrate survey shows that of those not planning to take a summer holiday this year, almost 50% said they could not afford it, making it by far the most common explanation of the study.
The cost of gas, in particular, seems to be a sore point. The Vacasa survey reports that one in four Americans are delaying their decision to travel this summer until travel and/or gas prices drop.
Afraid of losing key activities by car, some properties are looking to help defray some of the transportation costs. In New York, for example, Crowne Plaza HY36 has rolled out its Fuel Up on Us package, which includes deeply discounted parking and a $50 gas card as well as Citibike access for up to two adults per stay.
Of course, missing from the picture is business travel, which has notoriously lagged leisure travel throughout the recovery. However, some hotels are reporting green shoots in business and group activity, and while there’s still a long way to go, the trend certainly seems to be improving.
We hope business travel demand picks up before pent-up leisure demand begins to die down.