Pulse Report:

As The Hospitality Industry Rebounds, Guest Expectations Rise

June 2022

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While the recovery continues across the global hospitality market, and pace, web traffic, and pick-up continue to rise, guest expectations have risen with them. As a result, review scores are down as hoteliers try to navigate various operating headwinds. 

One of the hotel industry’s shifting landscapes pertains to the diverging trajectory of guest satisfaction and RevPAR recovery trends. 

Lodging demand and pricing are moving in a positive direction while guest review scores are sequentially declining due to numerous operating headwinds. 

  • Be Proactive - Commercial teams should be thinking about what kind of long-term ramifications this challenge is going to have on the guest experience and the ability to drive growth. After all, the amount that a guest pays influences their level of satisfaction. Commercial strategy can only come to life if we put the guest in the center and aggregate all the data points across the journey.
  • Web Activity - Consumer research and shopping on hospitality brand.com websites are not seeing any signs of pulling back despite pressure from macroeconomic forces that tie into guest behavior. 
  • Turndown Ratio of Regrets and Denials - These continued to tick up to 24% in May, due to reasons such as “price too high” or “lack of room availability”. 
  • Web Conversion Rate - (or ratio of the number of bookings divided by the total number of visitors) remained healthy at 5%. 
  • Booking Pace - The velocity of new sales remains off the charts. 

Over recent months there have been a lot fewer last-minute bookings and, while many travelers still procrastinate, we are seeing a lengthening of the booking window as it returns to pre-pandemic patterns of advance purchase. 

Knowing why guests are booking and adjusting the stay experience accordingly can have a significant impact on satisfaction.

The ‘W’ Shaped Recovery 

Hospitality guest satisfaction reached record-high levels before the pandemic in July and August 2019. But, similar to most industry performance metrics after covid hit, guest satisfaction scores fell off a cliff starting in March 2020 and troughed in August 2020. The trend sequentially improved until May 2021 and then turned negative to a historic low in November 2021 after the covid delta variant peak. 

Global hospitality guest satisfaction trends progressed at the start of 2022, down only -2.5% from 2019 levels. While the pandemic may have connected the guest experience and revenue growth dynamic even more tightly, recent headwinds caused this correlation to deviate. Starting three months ago in March 2022, the downward slope returned, now -3.5% off of 2019 guest satisfaction levels. This “W” shaped recovery mirrored the broader industry RevPAR change trend up until recent months. 

The reality is customer expectations are returning to normal while owners and operators seek to best compete in the new normal.

Lloyd Biddle, Director of Product Marketing, comments: “There is an old saying in the hospitality industry that ‘today’s booking pace is tomorrow’s RevPAR result’. While still true today, the post-pandemic commercial strategy evolution broadens these parameters to a refreshed industry adage that ‘today’s consumer searches are tomorrow’s guest reviews.”