Hoteliers believe that demand for leisure travel is setting the stage for another strong spring and summer, but visibility remains short, and questions remain about group and business travel.

The strength of leisure travel demand during warm weather months has driven a rebound in U.S. hotel industry performance the past two years, while demand for hotels from groups and business travelers has lagged in the recovery from the COVID-19 pandemic.

As the spring and summer months approach, forward bookings are giving hoteliers some indication of what’s to come for each of the demand segments.

Spring Forward

In a typical year, spring break and Memorial Day kick off the spring and summer leisure travel seasons, but this year, a few unlikely holidays have taken their place.

For McKibbon Hospitality’s hotels, demand showed signs of ramping up over both the Valentine’s Day and Presidents Day weekends, regional director of sales and marketing Charity Wilson said. With school spring breaks coming up in March and April, both transient and group leisure demand is trending upward, she said.

“We’re anticipating it to continue to be high demand for leisure travel,” she said. “We believe that it will be even better than what it was last year, especially with people continuing to mix business and leisure travel for trips.”

Though it seems strange to consider Presidents Day a bellwether for future travel, the demand over that weekend has demonstrated that people are getting over COVID-19 and the other factors stalling them from traveling, said Andrew Jordan, chief marketing officer at Aimbridge Hospitality. Many groups that canceled in January and early February have rebooked later in the year or within the quarter.

“When we look at March, we’re feeling pretty good,” he said. “We’re seeing some clear increases in demand. I’ve heard a lot of people talking about that it’s going to be the mother of all spring breaks.”

Last summer’s leisure travel boom was greatest in secondary markets close to outdoor attractions, such as mountains, beaches and state and national parks, said Carolee Moore, senior vice president of revenue strategy at Crestline Hotels & Resorts.

Spring break booking trends over the past few weeks have also been positive, with travelers again favoring secondary and tertiary markets over major downtown areas, she said.

Crestline is seeing the typical leisure business return, but with longer stays. People who are working remote are taking longer weekends by adding on Thursday nights or Sunday nights.

“What used to be typical Friday, Saturday has become Wednesday, Thursday, Friday, Saturday,” she said. “We’re seeing different patterns of leisure come through.”

Group and Corporate Demand

Group demand for hotels is starting to rebound, particularly among the social, military, education, religious, and fraternal groups, Wilson said. A lot of family reunions and school groups have booked for 2022, she added.

Corporate travel is still pacing down compared to 2019 levels, but McKibbon expects that to improve throughout the year, particularly as companies institute return-to-office policies, she said.

For both of these demand segments, bookings are picking up for the third and fourth quarters as well as 2023, Wilson said. Much of it varies by market. As more bookings come in, she said she expects the company to be able to push a little more on rates compared to last year.

“As we start hitting those timeframes, especially on heavy demand periods, we fully expect to see those [average daily rate] increases,” she said.

Most of the group business that canceled due to concerns over the omicron variant of COVID-19 has rebooked in the year, Jordan said. That business has not quite reached 2019 levels during the first quarter this year, but it is close, he said.

Moore said there was a ramp-up in business travel toward the end of 2021, giving Crestline confidence in the first quarter of this year until the omicron variant hit.

Corporate bookings are beginning to rebound again, but there are still a lot of cancellations and changes, she said.

“Folks are now in a different habit where they just put placeholder reservations out there and then they make changes to them,” she said. “What we’re seeing is a nice, slow — but still nice — ramp. We’re seeing that upward trend a little bit for those individual business travelers.”

Group bookings have been mostly social, Moore said, noting that Christmas, New Year’s Eve and Valentine’s Day are the three big engagement holidays and typically signal a lot of hotel booking inquiries.

Some clients have also inquired about hosting larger business meetings later in the year, she said.

“It’s going to be a little bit of a wait and see for variants and other stuff, but we’re getting the inquiries that folks are really wanting to get back to it, and we appreciate that for sure," she said. "We just haven’t seen them really come about yet.”

Short Booking Windows

Guests are still booking stays very close to their arrival date, Wilson said. About 70% of McKibbon’s rooms are being booked seven days out or shorter, and groups have been booking last minute as well, with some within a two-week timeframe.

Some of that has to do with youth sports teams moving on to next rounds of competitions, which is normal, she said. For others, especially education groups, it’s related to travel restrictions lifting.

In forward bookings, the second quarter is trending a bit higher than the third, Wilson said. That’s likely due to many rebooked reservations from the first quarter falling in the second quarter.

Due to the shortened booking window, the confidence level in forecasting is limited, but all indications for summer point to the continued strength of leisure travel and more demand from groups, Jordan said.

“When we look at the year, we can feel good about it, and we feel good about the fourth quarter, but we’re really laser-focused on the next four weeks,” he said. “We have a four-week window that we keep expanding.”