Three Takeaways From Deloitte’s Research on Summer Travel Spending and Intentions

As the summer travel season coincides with the easing of some stay-at-home orders, people are starting to hit the road once more and plan future trips, albeit at significantly lower levels than before the pandemic. The latest wave of data from Deloitte’s Global State of the Consumer Tracker released earlier this month found that nearly a third (31 percent) of consumers are planning to stay in a hotel for leisure purposes this summer—up from 24 percent in mid-April. Travel spending is also on the rise, with four weeks of year-over-year growth, and increased traffic to online travel sites indicates that people are once again browsing where to go next.

“What we have seen is an uptick in people’s interest in booking in the next three months as we enter into the summer travel season. That’s no surprise to any of us; having been cooped up with stay-at-home orders over the last few months, people are looking to get out and about,” said Steve Rogers, executive director of Deloitte Insights Consumer Industry Center. “We’re seeing some signals of people getting back out there—not only from what their stated intentions are but also from the credit card swipes.”

Rogers added that the numbers are still “pretty depressed” compared to pre-COVID levels. “We’re coming off of some pretty dramatic lows, but we’re starting to see those glimmers of hope,” he explained.

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LODGING spoke with Rogers and Yutta Shelton, Deloitte’s U.S. hospitality sector leader, about the biggest trends from Deloitte’s latest wave of data, and what hotel owners and operators can do to better serve guests in the current environment.

Millennials Travelers and the Economy 

Millennial travelers are showing the most interest in getting back out there compared to other age cohorts—36 percent of millennials plan to stay in hotels this summer and 34 percent are planning to domestic air travel. However, this age group is also the most concerned about their ability to afford upcoming payments (e.g., rent, mortgage, utility, or car payments), according to Deloitte’s Global State of the Consumer Tracker.

“Approximately 35 percent of millennials say that they plan to get out there compared to about 25 percent when it comes to older cohorts, but they are also concerned with their financial wellbeing,” Rogers explained. “We’ve seen this creep up. In mid-April, one in three was telling us that they were worried about making upcoming payments. Now, it’s about 40 percent.”

Rogers added that as a result of these financial concerns, travelers may move downmarket in their choice of accommodations and choose more affordable economy or midscale hotels—a trend the Deloitte team is watching. “People are still going to have a desire to get out and see family and what not because we’ve just been shuttered up for so long,” Rogers explained. “Hotels have to think about their messaging to that cohort: How do they represent the economic realities that some people are starting to face, but also how do they find that other 60 percent that aren’t expressing [financial] concerns?”

Private Accommodations and Guest Experience

While hotels are still leading private accommodations in terms of where people intend to stay this summer, that gap is narrowing. “There’s stronger spending intentions for private rentals, and it’s not too far behind traditional lodging,” Rogers said. “Some of the reasons for that may be that you have greater control—as you think about a 500-room hotel versus a three-bedroom house, you might feel that you command your space a little more.”

Yutta Shelton, Deloitte’s U.S. hospitality sector leader, said that the shift toward remote work has created more interest in private, extended-stay accommodations. “Originally, I predicted that people would not want to stay in private homes and they’d rather stay with a trusted brand knowing that there were brand standards,” Shelton said. “The resiliency of the traveler in wanting to get out there and the ability to have an extended stay in a comfortable environment […] really changed that dynamic.”

Shelton said that this trend underscores the need for hotels to get control back into the hands of travelers, creating a guest experience that feels comfortable and safe with contactless check-in, optional room cleaning, and providing essential supplies for guest use like disinfecting wipes and sanitizer stations. “When I think about the Airbnbs of the world and what can be attractive to someone is that it’s clean essentially before they get there, but then you can bring in the cleaning products and clean it all down yourself. Where there’s an opportunity for [hotels] to do that as well—having wipes at the doors and within rooms—that [gives guests] peace of mind.”

Communicating Cleaning Initiatives and Investing in Technology

In early April, about one in five U.S. consumers said they would feel safe staying in a hotel, according to Deloitte’s Global State of the Consumer Tracker. Weeks later, that share shifted upward to nearly one in three (30 percent). Shelton said that hotels should “over communicate” the steps they are taking to create a safe and healthy environment for guests, and demonstrate that the property is prepared with an action plan in the case of a suspected or positive COVID-19 case. “Delta Airlines did such a great job of getting the message out there hard and fast, and people listened,” Shelton said. “People traveled in spite of not really wanting to travel via airlines. To the extent that owners can leverage not only the lodging companies’ marketing campaigns, I think their ability to hit on the local market will be key and critical.”

In addition to showcasing how properties are prepared to welcome back travelers, Shelton added that hoteliers should look into and consider investing in technology that will help sustain their cleanliness models—applications “that allow [hoteliers] to be both proactive in keeping up with the status of rooms, the status of employees, but more importantly, have the ability to react quickly when something happens. To have real contact tracing is critical,” Shelton said. “I know the margins on so many hotels are so small, especially for select-service properties, but I think investments in that space now will come back to them twice fold.”

 


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