COVID-19 recovery trends for hotels
In September 2020, McKinsey & Company published the report “The travel industry turned upside down: Insights, analysis, and actions for travel executives”
As the report covers all travel segments, 123compare.me team summarizes some main takeaways for the hotel industry.
COVID-19 Booking Patters: Shorter Booking Window & Postponed demand
- During this crisis, hotels showed a revenue decline four times greater than during the two previous crises combined. Yet, hotels share first place among hard-hit sectors with the cruise industry.
- The good news: there are sights for latent demand. Travelers are willing to return to travel as soon as they will be allowed (disregarding the situation with the vaccine).
- According to the report, hotels’ demand and RevPAR will not recover to pre-COVID levels (2019) until 2023/24.
COVID-19 Recovery and Future Periods Patterns
- Recovery will be inconsistent in different segments, markets, geographics.
- The following segments will perform better in the recovery phase:
- Budget + Economy over Luxury
- Nature/outdoor over City
- Domestic travel over International
- Leisure, resorts over Business
- Remote working/ work from everywhere will open new opportunities for hotels (long-stays, co-working, “workations”). An interesting appearance in trends: “temporary stay due to the coronavirus” as a reason to travel.
- The booking window will be significantly shorter (that was obvious and now it is confirmed).
- Business traveling will take longer to recover. Especially huge-scale events (no surprise here)
COVID-19 Recovery Opportunities
- Vacation rentals outside cities show the best recovery pattern.
- Car (rented or owned) is going to be the main mean of transport (places that can be reached by automobiles will benefit significantly).
- Focus on microsegments and niche offers could help hotels recover better.
- Non-price factors become more important for travelers. Travelers value safety and wanted to be comfortable with all touchpoints of the journey.
- For the industry to recover companies should think about joint ways to cope with the consequences of the pandemic. New partnerships could help to restore the traveler’s confidence and overcome the financial crisis.
To sum up, the report might be interesting for all players in the industry, including hotel tech providers. Many of them, as well as 123compare.me, adapted their offering to the current situation and, no doubt, hotels should make use of it. Not all hotels will be victims of the pandemic and hotels should be more agile and try different approaches to adapt to the situation.