Hoteliers have said the demand hitting their hotels this spring and summer is still lining up for some solid performance, while not as dramatic as last year’s “mother of all spring breaks.”

The outbreak of the omicron variant of COVID-19 tripped up the hotel industry’s expectations for a strong start to 2022, but by March, people wanted to travel again, and that desire carried well over into the summer. This year, travelers still want to hit the road, but they’re doing so after a year of hitting their must-see destinations.

Hotels are still going to have good spring break demand even if it’s not the same as 2022, said Carolee Moore, vice president of revenue strategy at Crestline Hotels & Resorts.

“I think last year was almost manic just because people wanted to get out,” she said. “Now, most of them have been able to travel this past year. They’ve been able to relatively do whatever they want.”

Another key difference hoteliers noted was that because of the omicron variant surge last year, many travelers waited until the last minute to book. This year, as they’re more comfortable traveling, that booking window has significantly expanded beyond a few weeks.

Business on the Books

Guests have been booking for spring travel since January and February, with some booking even in December, Moore said. People were hesitant to book further out in the year heading into spring after the omicron surge, so most bookings were last-minute.

“Last year was like a switch flipped or something,” she said. “All of a sudden, people were booking anything they could get their hands on for a beach or outdoor type of location.”

Along with the expected leisure demand, there’s more business travel on the books this spring, and it’s creating a lift across the calendar, she said. Some of that weekday business demand is rolling over to the weekends as well.

Twenty Four Seven Hotels’ properties have seen great production in spring demand heading into summer, said Isaac Rodriguez, senior vice president of revenue strategy and distribution. There’s been substantial growth in booking windows across demand segments.

Another positive development is the amount of group business in particular booking further out, he said.

“That’s allowing us to really be mindful of how we’re sprinkling in the transient demand,” he said. “Things have really taken off in terms of the business on the books for spring break heading into summer.”

For transient demand, there’s been more bookings coming in at or beyond the 30-day window, he said. On top of that, the company’s hotels were able to get those bookings without much discounting.

While not coming in at a rapid clip, booking windows have been progressively increasing and returning to more traditional levels, said Cory Chambers, vice president and chief revenue officer at Hospitality Ventures Management Group. Guests are booking further ahead to lock in availability and rates to ensure they’re getting the best value.

Tuesdays, Wednesdays and Saturdays were traditionally the higher-demand nights while Sundays and Thursdays were lower, he said. While Saturday is still the strongest leisure night, Sunday demand is growing stronger while Tuesday and Wednesday have been weaker without business demand.

“The demand patterns still favor leisure, and there still is a feeling of recovery to be had midweek as business travel slowly and incrementally improves,” Chambers said.

The summer is typically the softest business travel season, but it’s also the strongest leisure period, and that will buy hoteliers more runway heading into the fourth quarter, which is traditionally one of the strongest quarters for business travel, he said.

Destinations in Demand

This year, Crestline’s hotels are seeing more reservations come in for the major urban markets that were slower to recover last year, Moore said. While beach destinations have plenty of demand, it’s not as strong as last year as more people are traveling to cities such as New York, Chicago and Washington, D.C.

The beaches will still be as busy as they were last year, but the demand itself isn’t as strong, she said.

“So, probably the rates are going to be about the same, not any big increases or big changes at the oceanfront,” she said.

Chambers said HVMG expects to see year-over-year growth at its beach hotels and resorts, but it’s going to be low single-digit growth. There’s deceleration of demand growth, but that’s partly because these properties are already fully recovered.

The other factor at play here is that other leisure-oriented opportunities are available again, he said. International travel, cruise ships and theme parks are back, and people are also headed back to large urban destinations.

Secondary and tertiary markets, such as Boise, Idaho, and Palm Springs, California, have performed strong over the past couple of years as more people looked to book outside major markets, Rodriguez said. It wasn’t clear whether these markets would continue to perform well as travel patterns returned to normal, and the expectation is people would return to the types of destinations they went to before.

“What we’ve seen is actually the opposite,” he said. “These markets continue to flourish, the secondary and tertiary markets.”

Many of these types of markets had incredible average-daily-rate increases, and even over time as occupancies have held, the rates are still there, he said.

“We didn’t know really what the price position would be in some of these secondary and tertiary markets, but they’ve continued to hold up and they’ve continued to sell with very little rate dilution from the previous year,” he said.

Summer Outlook

This summer looks similar to last year’s, and the rates are a little stronger now, Moore said. It all varies by city, naturally, as the beach destinations have less demand while the major markets have more, just like Crestline’s hotels are seeing for the spring.

There has been a larger increase in corporate bookings than expected, Moore said. What she’s curious about is whether these reservations are tied to meetings, as she normally doesn’t see corporate negotiated rates book out that far ahead of time. They aren’t big numbers, but it’s a bit unusual for the time frame.

“But we’re seeing negotiated business return, and that’s a nice thing for us to see,” she said.

Some of that increased demand for urban hotels is due to increased business travel that sometimes rolls into the weekend, not just pure leisure travel, Moore said. Crestline can assume it’s at least partly business travel because some bookings are coming in under a negotiated account as they pick up a Friday night. It’s either bleisure travel or the guests are coming in on their discount for a vacation.

“When we talk about splitting business, there's no button for that, like there's not a choice and you're making a reservation to say I'm on spring break,” she said. “We're starting to see shifts and other demand that overlaps, so it's kind of hard to isolate.”

Summer demand is still picking up, and it’s nice to see how much retail and packaging is coming in, Rodriguez said. Length of stay has increased, and there’s more hybrid trips. All segmentations are up.

The biggest thing the company is noticing in terms of demand implications for the summer is it’s still figuring out the pricing limits, he said.

“We continue to test higher price patterns, and we still haven’t really found that price sensitivity that slows down particular stay patterns,” he said. “It’s nice to see the average daily rate is not being sacrificed in terms of getting this additional occupancy increase.”

The summer should be a season where hoteliers can focus on their mix of sales and make sure they’re taking the highest-rated occupancies for each individual hotel, Rodriguez said.