For many hoteliers, things are looking up.
Based on my many conversations with general managers, sales directors and other industry players this spring, it’s apparent that leisure travel is continuing to roar back, average rates are generally near or at all-time highs, and travelers are more willing than ever to upgrade to luxe accommodations. During these exchanges, a singular force is typically credited with driving this solid comeback: pent-up demand.
And it’s not just hotels. Vacation rentals, which saw bookings spike amid the pandemic, are similarly benefiting from an overflow of travel enthusiasm.
According to late-April survey data from vacation rental platform Vacasa, 63% of Americans are planning to travel this summer, up from 59% in 2021, and 85% of those summer travelers say they are planning to vacation more frequently than they did last year.
But what happens when summer is over and pent-up demand potentially starts to fizzle out?
Travelers may currently be planning trips at a rapid clip, but once they’ve crossed a big vacation or two off their bucket lists, 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 large, some may soon opt to curb travel spending.
Another late-April survey, this one from financial services company Bankrate, indicates that travelers could, in fact, already be pulling back.
Bankrate reports that nearly seven in 10 U.S. adults who say they’ll be taking a vacation this summer already anticipate making changes to their plans due to high levels of inflation. Among those surveyed, the top trip modifications include taking fewer trips or traveling shorter distances, with just under a quarter of respondents saying they may opt for cheaper activities or less expensive accommodations and/or destinations.
Likewise, during a recent phone call, Kristi Marcelle, a senior travel advisor with family travel-focused agency Ciao Bambino, told me that with hotel rates everywhere from Hawaii to Europe soaring, some of her clients are being priced out of their desired lodging, particularly at the luxury and upper-upscale end.
Most at risk of being let down, according to Marcelle, are her “entry-level, five-star clients,” who may become “seriously frustrated that they can no longer afford the five-star options” as well as clients accustomed to four-star accommodations, who are “getting squeezed” and similarly having to trade down a price category.
At some point, or at a certain price category, a traveler may decide it’s not worth it to take the trip.
In fact, the rising cost of living, as well as traveling, appears to have eclipsed Covid when it comes to being a reason to stick it out at home. The Bankrate survey shows that among those not planning to take a summer vacation this year, nearly 50% said they can’t afford it, making it the study’s most common explanation by far.
The cost of gas, in particular, appears to be a sore spot. The Vacasa survey reports that one in four Americans are holding off on their decision to travel this summer as they wait for travel and/or gas prices to drop.
Worried about losing key drive-to business, some properties are looking to help shoulder part of the transportation cost. In New York, for example, the 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 the business travel piece, which has notoriously lagged far behind leisure travel throughout the recovery. Some hotels are reporting green shoots in business and group activity, however, and while there’s still a long way to go, the trend certainly appears to be improving.
Here’s hoping business travel demand picks up before the pent-up demand driving leisure starts to die down.
Source: Read Full Article