2022 was a year of mixed fortune for the hospitality industry.
NB: This is an article from OTA Insight
As we kickstart the new year and hoteliers begin to implement their 2023 roadmaps, it’s the perfect opportunity to look back on the last twelve months and reflect on some of the trends and developments that have shaped the hotel industry, and hotel revenue management in particular.
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The pandemic was a black swan event that brought the world to a standstill, and travel to a complete halt. By November 2021, the world was beginning to reopen. Until the Omicron variant emerged. Travel plans were scuppered, restrictions reinforced and for the hotel industry, it was another setback, dashing all hopes of a holiday season surge in travel.
In this blog, we’ll be examining what’s happened since then. We will look into how recovery has transpired globally, how hoteliers have managed recovery and other notable industry trends of 2022 that have affected the hospitality sector and will likely continue to influence revenue management in 2023.
1) Revenge travel took off
The introduction of vaccines and the softening of restrictions brought about a surge in demand, and for destinations that were quick to open up, a booming era of travel. This meant that relative to 2020, and 2021, hotels in 2022 performed much better, though they were still below, 2019, the previous “normal” year of travel.
As it became clearer that restrictions would be lifted, week-on-week flight and hotel searches began to increase as consumers looked ahead to travel windows in the spring, and summer.
In the graph below, we can see that some destinations (São Paulo, Paris, Mumbai, Mexico City, London, Jakarta, Istanbul, Dubai and Amsterdam) have seen an increase in flight search volume compared to 2019. Others are still well below pre-pandemic levels.
Asian markets that reopened later saw a slower recovery. Flight searches to Beijing are 85% below what they were in 2019, while Hong Kong flight searches are 67% below 2019 levels. Search volume to Tokyo is 20% below what it was in 2019.
Flight search volume comparison to key global cities
2) Hotel occupancy picked back up
Occupancy rates too showed an increase compared to previous years but were still below 2019 levels. The graph below shows average occupancies for the years 2019, 2020, 2021, and 2022. As we can see, occupancies have shown strong recoveries from previous years, but are still slightly below where they were in 2019.
Much of this is due to the fact that for the first quarter of the year, there were still travel restrictions in place, while Russia’s invasion of Ukraine also had an influence on travel sentiment. In the subsequent quarters, there was a much better performance overall, with some destinations (Berlin, Brussels, Istanbul, Orlando) on par with, or even out-performing 2019 occupancy levels.
Actualised occupancies in key global cities
Read rest of the article at OTA Insight
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