Global lodging sales surpassed pre-pandemic levels for the first time in 2023. Consumers’ eagerness for travel has driven a strong recovery across all global regions. The growth of luxury travel and short-term rentals will be an important factor in driving additional growth for the industry. Several challenges are also facing the industry, however, including the impact of climate change on travel patterns and consumers’ fast-evolving expectations for loyalty programmes.
This report comes in PPT.
Luxury travel is an important market for the lodging industry, given the higher profit margins compared against other lodging sectors. Lodging companies are investing heavily in developing the luxury travel space in Asia and the Middle East. The growth of luxury travel in these markets will target high-income consumers in emerging markets across these regions. Consumers have shown a strong willingness to pay more for high-level experiences post-pandemic, which will provide additional fuel to the luxury segment’s expansion.
Travel prices rose dramatically following the pandemic, leaving many travellers eager to find deals. All-inclusive resorts have taken advantage by promoting themselves as budget-friendly options that provide high levels of service. The category has even made inroads with luxury travellers, with major hotel companies such as Hilton, Hyatt and Marriott announcing upscale and luxury additions to their pipeline of all-inclusive resorts.
Lodging companies are investing significantly in loyalty programmes to retain and increase the value of their existing customer relationships. While travel companies have operated loyalty programmes for years, they are now experimenting with new technologies, such as hyper-personalisation, to build deeper relationships with their customers. Travel intermediaries are also investing in loyalty programmes, however, which could turn loyalty into a proxy in the battle between direct and intermediary bookings.
Consumers are increasingly eager to travel to destinations featured in their favourite streaming TV shows or hit movies. Set-jetting, where travellers visit the locations for these shows, can provide a major bump in lodging demand for those locations. It also, however, increases the risks for overtourism. Lodging companies will need to partner with destinations to ensure they are managing travel demand sustainably.
Sustainability and climate change will have a substantial impact on the entire travel industry, lodging included, over the next five years. Lodging companies will come under increasing pressure to show results and improvements on sustainability initiatives, such as water and energy conservation. Additionally, seasonal demand for properties may shift, as extreme heat and other climate-related factors impact the peak northern hemisphere summer travel season.
Travel encompasses several categories including tourism flows, lodging, travel modes, in-destination spending and booking.
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