Dive Brief:
- American consumers’ intent to travel and book hotels has remained steady and will continue to throughout 2024, according to Deloitte’s 2024 Travel Industry Outlook report.
- Despite economic headwinds and inflation, consumers continue to prioritize travel spending. The report found that “at peak inflation, when financial sentiments were at their lowest” in July 2022, consumers maintained, and even marginally increased, their travel budgets. Intent to book a hotel, particularly, was 1.3 times higher in July 2022 than the previous year. Deloitte forecasts this trend will persist in 2024.
- While consumers are prioritizing travel, and are willing to spend on it, their expectations around what they will splurge on during a trip are changing, with a focus on destinations and experiences. And hotels will have to “touch up” the travel experience to accommodate evolving consumer preferences, the report said.
Dive Insight:
Consumers in 2024 will place a higher value on travel than they did pre-pandemic. But with pent-up demand seemingly tapped, and travelers moving away from “revenge travel,” the industry can expect to benefit from “a more lasting shift in spending priorities,” according to Deloitte.
The report found that travelers are most likely to splurge on in-destination experiences, lodging location and destination distance. On the flip side, they are more likely to cut back on hotel class or certain travel upgrades.
Deloitte expects that, in 2024, more hotels will partner with sports teams, event venues, food and beverage brands and other vendors to give guests special access and exclusive pricing to experiences. Hotels will also focus on upgrading their loyalty rewards programs to more easily connect guests to their offerings.
And creating and offering better experiences for guests will go beyond what’s traditionally thought of as an experiential amenity, according to Deloitte.
“Hospitality providers know they need to improve the experiences they offer or risk losing travelers’ attention,” the report said. “At a fundamental level, this will likely mean continued investment in backoffice technology and an urgency to understand how generative artificial intelligence can improve operational efficiency and better align resources to demand.”
Hotels will create more automated in-app digital features to address common friction points, increase investment in frontline teams and continue innovating attribute-based selling, bundles and flexible merchandising, the report said.
Some hotels have already begun catering to heightened demand for experience-based trips, including Choice Hotels’ Cambria brand and lifestyle brand Margaritaville, both of which launched properties in popular U.S. ski destinations last year.
