June 21, 2022
5 Key Developments in the U.S. Hotel Market
In 2021, the U.S. leisure traveler came out in force, driving up demand. By the end of the year, hotel bookings were back to 85% of pre-pandemic levels, and a full recovery is not far off. According to Phocuswright’s latest travel research report on the segment U.S. Hotel and Lodging Report 2021-2025, the sector now represents 51% of all U.S. travel gross bookings.
Trends and traveler behaviors are changing, with hotels taking notice as they pivot strategies and redistribute marketing dollars. Here are 5 key developments that Phocuswright research has uncovered:
- Holding their own versus short-term rentals: For short-term stays of four nights or fewer, hotels are still widely preferred by travelers versus other types of accommodations.
- Finding opportunity in a staffing crisis: One notable impact of the labor shortage, however, has been on rates. Strong demand has allowed hotels to maintain rates as their payrolls shrink, and travelers have yet to protest fiercely.
- Managing OTAs got easier: Leveraging their "book direct" campaigns, hotels have also attracted millions of new members, many of whom prefer hotel websites and apps for lower prices and points.
- Awaiting the return of business and international travel: Although OTAs gained a slight advantage when domestic leisure travel came roaring back in parts of 2020 and 2021, hotels now have something else in their favor. The return of business travel, even partially, would offer big relief from the lows of the pandemic.
- A marketing pivot - In search of demand: With the strength in leisure and small business travel (in lieu of corporate), 2021 was the time to boost those trends, and brands have had to relearn where to best put their limited marketing dollars. Hotels have found success - and new customers - running localized promotions instead of national ads.
Copyright 2022 Northstar Travel Media LLC. All rights reserved. From https://www.phocuswright.com.
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