After two years of turmoil and confusion, the travel industry has largely needed to hit the reset button. The economic fallout and transformation from the pandemic represent a far cry from the great recession and predecessor events - when demand returned, things largely returned to normal. Now, the shapes of supply and demand are constantly in flux, which impacts hoteliers’ ability to profitably predict and act on fast-moving consumer demand, and nimbly flex on brand, technology, safety, and other factors to stay ahead of competitors.
How specifically has the pandemic re-shaped the industry? What trends can we expect to see play out in the year ahead? And what actions and tools are hotel revenue teams using to help them navigate the new consumer landscape?
[This blog is an extract from our latest Special Report, Re-booting Revenue: Refreshing Strategies for 2022 and beyond. Discover what industry experts from around the world think are the trends and opportunities to look out for in 2022. Download today: https://www.duettocloud.com/special-reports/rebooting-revenue-2022]
We recently surveyed hoteliers from around the world and analyzed their responses to gauge the sentiment of and priorities for the hotel industry in terms of revenue management, revenue tools, and innovations. We then engaged a highly multifaceted group of industry experts to put their best bets forward to identify 2022-and-beyond trends.
Collectively, these data-powered insights can help brands, management teams, independents, OTAs, casinos, and others align and map revenue strategies in the transformed universe in which we all operate.
7 Revenue Trends To Look Out For In 2022
- Tech investment goes mainstream
Tech investment is central to preparing for the future. It’s probably little surprise, then, that tech investments picked up during the pandemic and look set to increase even further as hoteliers pull out of the crisis and more expenditures become possible as revenues return.
Those surveyed were largely tech-savvy, with 67% already using a revenue management system (RMS) to optimize rates and streamline revenue efficiencies. But perhaps more important was that many of those not operating an RMS are looking to invest in this soon. Overall, 77.6% of respondents expect their hotel tech investment to increase in the next three years.
- Direct channels are key
In terms of optimizing business, the survey results showed a continued emphasis on driving direct business. The top five areas of focus for 2022 were:
- Channel management - website / email / phone (79%)
- Corporate business (47.1%)
- Groups business (42.9%)
- OTA business (40%)
- Tour operator, wholesale, FITs (31.9%)
In terms of channel management, the top five areas of focus were:
- Own website (91.9%)
- Invest in metasearch (67.6%)
- Invest in loyalty (61%)
- Push OTA (45.7%)
- Integration tops RMS needs
The survey also asked respondents to list their three most important trends in Revenue Management in 2022. The most important trends for 2022 were identified as
- Integrated systems (58.6%)
- Automation (54.8%)
- TRevPAR (36.7%)
- Digital guest journey (31.4%)
- Ancillary revenue (29%)
Tech adoption in hotels has been accelerated during the past couple of years, but still, the industry lags behind widespread adoption and optimization. However, it’s promising to see that more industry leaders are focusing on tech adoption, tech upgrades, and creating an integrated tech stack, both at a property and enterprise level.
- RMS takes center stage in change management
Hospitality Consultant & Technology Innovator Ira Vouk calls for the industry to adopt a holistic, profit-orientated approach to revenue. She takes this a step further by breaking down the hotel tech status quo, with a call for the RMS to assume center stage (instead of the PMS) as the lynchpin of hotel business operations.
“There's a lot to be said for seeing the revenue management platform as the center of the ecosystem. It’s all about data after all. Most advanced hoteliers now understand that they need to start building their tech stack from the most ‘data demanding' piece that plays a key role in their business strategy and then work backward to find the right PMS and not the other way around,” Vouk says.
Similarly, Wilhelm Weber of SHS – Swiss Hospitality Solutions believes this year is a great chance to hit the ‘reset’ button but urges that intelligent solutions need to be at the heart of this. “Technology and digitalization should be at the forefront of your change management plans,” he says.
- Hotel performance re-stabilizes behind previous levels
Hospitality industry performance metrics have stabilized since the 2021 year-end holidays. However, figures remain depressed against 2019 benchmarks. According to Lloyd Biddle, Director of Enterprise Solutions, Duetto, “While an upward trajectory is evident, the industry continued to report muted headline RevPAR results versus the comparable 2019 period. While occupancy is lower versus 2019 for all chain scales (excluding economy), ADR growth continues to be the bright spot during the traditionally low demand Q1 period.”
Biddle’s analysis of our latest Duetto Pulse Report data also reveals that “consumer web searches for lodging remains highly elevated around the world, led by travelers in the US and Europe. Also, not all potential guests are only looking, because global bookings are up by 50%, led by Latin America. This intensified activity resulted in a 34% jump in committed occupancy (transient reservations + group blocks) for the calendar year 2022 at a double-digit average rate increase from last year, which easily surpasses the soaring inflation rates seen for most goods and services.”
- Leisure continues to widen the gap
As leisure continues to position itself for aggressive growth (particularly compared to other segments) in 2022, hotels continue to pivot on their product and go-to-market activities to attract more leisure guests and increase share of wallet.
Kelsey Fenerty, Senior Analyst, STR, points to the emergence of “alternative” accommodations as a firm favorite with the leisure traveler, as they seek to emulate the convenience and security of home combined with a change in scenery.
“The fortunate thing about non-traditional hotel types and non-hotel asset classes is that they tend to be overwhelmingly leisure-oriented, giving them a head start in recovery,” she says.
- Segmentation gets even more granular
If there’s a single 2022-and-forward reality that remains true, it’s that the customer remains front and center. Hospitality companies that find agile, efficient, and creative ways to connect with guests via personalized treatments will be the ones to achieve greater success in 2022.
“We are going to see a big re-engagement with the customer this year, both through the use of technology in terms of marketing, personalized offers, and driving loyalty via the evolution of Customer Data Platforms, and in renewed interest and appreciation in direct bookings and increased crossover between leisure and business travel. Segmentation as we know it is now out of the window. The customer sits in a segment of one,” says Chris Crowley, Senior VP of Sales, Duetto.
Learn how hotel revenue leaders like you are planning to optimize their business mix in the year ahead. Download our latest Special Report, Re-booting Revenue: Refreshing Strategies for 2022 and beyond.