Industry NewsCoronavirusNorth American Travel is Expected to Grow in the Next Six Months

North American Travel is Expected to Grow in the Next Six Months

After more than a year in lockdown, 76 percent of consumers in North America plan to travel within the next six months. According to a new Oracle Hospitality survey, 24 percent of respondents in the United States and Canada plan to travel immediately, 31 percent in the next one to three months, and 21 percent by the end of the year.

People are largely traveling regionally, but venturing further from home. Domestic travel will account for 61 percent of travel plans (versus 44 percent last year), 19 percent of people will stay within driving distance (versus 47 percent last year), and 20 percent will go abroad (versus 10 percent last year). Beaches (39 percent) and national parks (16 percent) are the favored destinations. No matter the location, 77 percent noted a COVID-19 vaccination is very or somewhat important in giving them the peace of mind to travel. In terms of getting on a plane, 18 percent do not feel safe doing so until they are fully vaccinated.

Last year, travelers cared most about navigating uncertainty with flexible hotel cancellation and refund policies. This year is about the experience. To compete with short-term property rentals, hoteliers are offering extended services from packaged excursions to new dining options. The majority of hotel executives surveyed (72 percent) are exploring opportunities for non-room revenue. And consumers are all in, with 68 percent noting they are very or somewhat interested in purchasing products or experiences from their hotel beyond the room.

“The pandemic has had a profound impact on the hospitality industry and continues to redefine how travel will look moving forward,” said Alex Alt, senior vice president and general manager, Oracle Hospitality. “The great news is that travel is on the rise and consumers are excited to get back out in the world. However, they have new and evolving expectations of what that experience will look like. Hoteliers are rising to the challenge to not only delight customers with a great stay, but also come up with services to boost revenue and compete with the growing short-term rental market.”

The Oracle commissioned survey was conducted by Skift in May 2021. The survey titled Back to Hospitality: Getting Smarter and More Profitable in a Post-COVID World interviewed 4,467 global consumers and 537 hotel executives (including 773 people and 160 hoteliers in North America).

Spending beyond the room

After a year of saving money on lost vacations, travelers expressed a willingness to spend for a great experience. Top services consumers have already or are interested in purchasing from a hotel include:

  • Ninety-two percent—food from a hotel restaurant.
  • Eighty-two percent—drinks from a hotel bar.
  • Eighty-three percent—food takeout or delivery.
  • Seventy-nine percent—tour or activity.
  • Sixty-eight percent—tickets to an event.
  • Seventy-seven percent—an extended stay.
  • Sixty-three percent—wellness or fitness services.
  • Fifty-three percent—subscription membership to hotel services.
  • Thirty-nine percent—utilizing a hotel as a temporary office space.
Pandemic priorities have become permanent practices

The survey shows that the features and amenities that became a necessity during the pandemic will be the norm and desire moving forward:

  • Seventy-six percent of hoteliers are providing contactless payment options, 36 percent self-service check-in, 59 percent digital messaging services to limit staff and guest interactions, and 42 percent smartphone-based room keys.
  • Sixty-seven percent of travelers hope to see increased frequency of cleaning and disinfecting procedures remain the standard in hotels.
  • Fifty-five percent of consumers still want to see guest areas/public spaces arranged for social distancing.
  • Eleven percent of consumers plan to dine solely via room service to minimize contact. However, 30 percent plan to dine in hotel restaurants, and 48 percent expect to do both.
Redefining vacation

Being stuck at home has shifted consumer thinking around vacations and what is most critical in terms of space and amenities:

  • Rentals on the rise: Fifty-four percent of travelers said they plan to stay at a short-term rental property in the next twelve months, 43 percent for the ability to stay socially distanced and minimize COVID-19 risk, 57 percent chose the rental for the added privacy, and 59 percent chose a rental for the access to a kitchen.
  • Hoteliers rethinking services to win over guests: Fifty-nine percent of hotel executives agree that non-room revenue will represent a growing share of their annual revenue in the next five years. Nearly half (43 percent) said non-room sources of revenue could represent as much as a quarter of their hospitality business in 2021 and another 24 percent said it could be between 26-50 percent of revenue within five years. Forty-eight percent of hotel executives are upgrading community space amenities, 46 percent are considering promoting hotel-only amenities such as restaurants, gyms, and pools, 26 percent are looking to add more live events and social activities, and 28 percent are considering upgrading in-room kitchens to better compete with short-term rentals.

Oracle Hospitality brings more than 40 years of experience in providing technology solutions to independent hoteliers, global and regional chains, gaming, and cruise lines. The report asked questions of consumers and hotel executives to better understand the key factors defining the post-pandemic hospitality marketplace. The survey highlighted what consumers are looking for in this fast-changing and highly competitive landscape and how hoteliers are adapting to welcome back travelers.