The travel industry has shown remarkable resilience in the face of economic uncertainty, tightened disposable incomes and the shadow of the pandemic hanging overhead – with consumers prioritizing vacations and putting more savings aside to fund substantial trips.
As we move into 2024, the demand for major events and festivals is driving peak pricing for hotel rooms in various locations.
But that’s not all – the travel & hospitality industry is on the cusp of a technological revolution, with AI and automation set to transform everyday life for both hospitality professionals and travelers.
In this blog post, we’ll explore the latest trends and innovations shaping the travel & hospitality industry in 2024 and beyond.
1. Experiential tourism goes from strength to strength
It seemed a big lesson for many from the pandemic was to prioritize vacation time, putting more savings aside to fund trips. Overall spending and the number of trips made globally continued to rise in 2023 as a consequence.
This momentum appears to be sustained in 2024, as the appetite for a substantial or meaningful trip has not dimmed. It might be for the trip of a lifetime or a long-dreamt of event or festival, as we continue to see sports, music and cultural occasions drawing major crowds and bookings.
Looking at the numbers helps to reveal this trend in action. In terms of major events, there are huge pricing spikes already evident for a variety of different locations in 2024, some of which are highlighted in the chart and are listed below:
- Las Vegas, Superbowl, 11th February, 2024: Peak pricing for a hotel room is 73% higher than in the month prior to the event beginning.
- Leipzig, Euros 2024, 14th June to 14th July: Peak pricing for a hotel room is 83% higher than in the month prior to the event beginning.
- Paris, 2024 Olympics, 26th July to 11th August: Peak pricing for a hotel room is 72% higher than in the month prior to the event beginning.
- Sydney, Eras Tour, 23rd to 26th February: Peak pricing for a hotel room is 64% higher than in the month prior to the event beginning.
Average hotel room pricing in select destinations hosting major events in 2024
The scale of those jumps underlines the demand signals already present in these locations and therefore the continued thirst to travel and make an event the centerpiece of a wider trip.
External survey data also supports the continued interest in substantive leisure trips.
An Alvarez & Marsal survey conducted in Western Europe and the Middle East found that in 2023, just 18% dialed down their travel spending, while 30% maintained spending levels and 52% spent more on trips.
While over in the US, a survey from iSEATZ found that 63% of those surveyed said that they expect to take one to four more trips in 2024 than they did in 2023, with younger consumers leading the way in this regard.
In both cases the results suggest that a large portion of this is because the perceived value of travel is higher now and that those trips are becoming larger and more complex.
In the first study, 31% said that what was driving their increased budget was a higher prioritization of travel in their household budgets.
The iSEATZ research also uncovered that 81% plan trips more than one month in advance and 57% said that they book at least two months before traveling, underscoring how many trips are now substantial and carefully planned.
Overall then, it seems the consumer is prioritizing large-scale holidays rather than numerous trips to nearby locations.
Overall then, it seems the consumer is prioritizing large-scale holidays rather than numerous trips to nearby locations.
2. The transformative impact of AI
Without a doubt, the big tech story in 2023 was the remarkable rise of generative AI, with ChatGPT becoming the fastest-growing application in human history.
There’s no reason to expect that course to change in 2023, with generative AI making major strides, and machine learning driving change in the hospitality industry.
It is certain to be one of the defining trends of 2024, as we see a broad-based penetration of machine-driven assistance for hospitality professionals across their businesses.
This might be through complex data analysis, chatbots, or marketing automation, to name just a few areas of high potential. This is especially so as the ability to integrate AI-enabled software is becoming easier at both the front and back end.
AI-supported pricing algorithms are expected to become increasingly prevalent in the field of revenue management. You will no longer be relying on guesswork or hours of research – optimal room pricing will be determined by machine learning analyzing a range of forward-looking, historical and market data sets.
Revenue managers will then be able to seize every revenue opportunity automatically, as pricing adjusts in real-time, with AI-driven recommendations.
The growing number of products, alongside their increasing ease of integration, makes it certain that AI within hotel technology is going to become a lot more common in 2024.
3. The traveler’s dreaming and planning stage will be altered in 2024
One of the more profound areas where AI may make inroads in 2024 is cutting down the process of planning a travel itinerary.
Generative AI is capable of making detailed plans, iterating on them and customizing through feedback in a way that feels effortless when compared to the current multi-step process.
While many of the AI services ordinary users can sign up for are not yet integrated into ways to complete the travel planning and booking loop, this is likely on its way.
Service providers in the travel industry are making these leaps through their own integrations. Expedia and Trip.com making limited forays into utilizing generative AI to make suggestions and curate trips, for example.
For hoteliers, this transformation introduces a new set of content optimization principles. It may leverage reviews and listings to generate answers to visitor queries in chat format for search.
There is then the additional potential to appear in relevant guest searches based on property amenities, location, target audience and potentially, pricing.
4. True personalization for both traveler and hotelier
One constant area of discussion and hope in the travel industry where we are certain to see a shift in 2024 is personalization.
This will become a meaningful phrase for travelers as they can have truly personal travel recommendations via chatbots powered by generative AI.
While we are in the very early stages of generative AI being deployed for commercial purposes, this is not the case with chatbots in general, so we should see the technology increasingly harnessed to communicate with travelers via this route.
Hoteliers shouldn’t rush into the technology for the sake of it, and instead need to consider the use cases for deployment and the kinds of guest interaction they want to drive.
One obvious area for usage by the hospitality industry is to tap into the aforementioned desire for experiences and offer genuinely tailored on-site and in-location experience recommendations to guests.
With the power and capability of generative AI to understand context and maintain persistence in a conversation, this could allow guests to both get to what they want faster and to feel valued and cared for during their stay, while the property is able to drive additional revenue.
5. Automation to facilitate a real human touch at your hotel
With a more personal touch coming, ironically from machines pre-stay, and a wider embrace of automation more generally, there is finally the potential to free up hotel employees to provide more value for the guest in 2024.
Think of a Business Intelligence tool that integrates with your Property Management System (PMS) to automate reporting. Without having to work through endless spreadsheets you save time, which enables you to transition to creating high-value commercial strategies or delivering exceptional guest experiences.
Advances in AI understanding of language should provide enormous opportunities to reduce routine issue resolutions and guest requests with a high degree of accuracy.
As this technology matures hoteliers can classify and resolve room issues and send requests to maintenance via smartphones with low-to-no human interaction, for example.
Combine this with a growing use of contactless technology and better integrations with guest devices and there is further space to reduce the reliance on workers at a time when the industry is struggling to find and onboard labor.
An embrace of automation and contactless should therefore diminish some of the more mundane tasks asked of hotel staff and free them up for more guest-focused and value-adding activities.
With guest loyalty so important in the fight to drive repeat and direct bookings, this represents a potential competitive advantage.
6. Airbnb pivots to less saturated global locations
Airbnb ended up having a mixed 2023. While the business continued to grow strongly, adding 14% more bookings YoY in Q3 2023 and the same percentage for revenue growth, it faced more scrutiny than ever.
Regulators in tourism hotspots around the world focused on short-term rentals over the course of the year, leading to concrete legislation that could well crimp the business’ long-term ambitions in some geographies.
CEO, Brian Chesky said the company had reached an ‘inflection point’ and needed to turn to expansion markets beyond their ‘core’ countries. So why the sudden focus on new markets and what does Airbnb mean?
It seems Airbnb is concerned that some of the most popular markets in North America and Europe have become saturated, slowing growth and drawing unwanted attention to itself from locals and politicians.
However, in less developed markets, especially in Asia, Airbnb sees growth potential and less chances of legislation hampering their ability to add hosts and grab bookings.
When we look at the market penetration of short-term rentals, the unrealized potential in Asia-Pacific immediately stands out.
Not only does the region trail Europe and North America for the number of listings, but even Latin America. Despite being the most populous continent on earth, the number of listings on the major vacation rental sites we monitor is 212% higher in North America compared to Asia and a massive 695% more in Europe.
Indeed, the number of rentals listed in Asia has still not caught back up to their pre-pandemic peak, sitting 37% below the level seen in early 2020 as of the data available at the time of writing.
When we look at the market penetration of short-term rentals, the unrealized potential in Asia-Pacific immediately stands out.
Short-term rental supply by continent, 2018 to 2023
Airbnb leadership has identified countries like South Korea as being sources of potential and at the forefront of this expansion. Again, we can see why the Airbnb leadership team views this country as having such strong potential.
Short-term rental supply in South Korea, 2022 to 2023
Since the beginning of 2022 the number of listings in the country has been on a consistent, near unbroken upward trajectory. The number of properties available on listings sites has grown from a little over 35,000 in January 2022 to just under 53,600 in October 2023, a boost of 52%.
7. The emergence of open API’s in hotel technology
As hospitality professionals continue to embrace new technology, the need for seamless communication between systems is more important than ever. That’s where Application Programming Interfaces (APIs) come in, acting as the ultimate connector for different software.
APIs are becoming increasingly vital for organizing and streamlining operations. The Lighthouse platform consolidates data from across a property into one cohesive and customizable interface, allowing teams to easily monitor daily operations with a single glance.
Having this level of clarity and ease of use is critical to maximizing efficiency, making them a key tool in bringing together teams and integrating all aspects of a hotel’s commercial operation.
If you’re a revenue manager looking to optimize your hotel’s performance, it’s time to take a closer look at the power of APIs.
8. Increase in hotel room bookings via mobile
Mobile technology has become increasingly important for hotels looking to stay ahead of the competition. With more and more guests booking hotels via their smartphones, hotels that leverage mobile technology can drive significant revenue.
First and foremost, you need to make sure your website is fully optimized for mobile, so the booking process is as seamless as possible and you can secure those all-important direct bookings.
Another way hotels can use mobile technology is by providing a mobile app connected to a PMS. This can offer contactless check-in and allow guests to book amenities like spa treatments, reducing front desk workload and providing a channel for push notifications.
Additionally, mobile apps can gather information on guest preferences, enabling hotels to create a more personalized guest experience.
By embracing mobile technology, hotels can streamline operations and reduce costs associated with traditional methods of check-in and amenities booking.
By embracing mobile technology, hotels can streamline operations and reduce costs associated with traditional methods of check-in and amenities booking.
Lighthouse is here to offer your hotel a helping hand in 2024
Technology is advancing at an unprecedented rate. Ensuring your team is equipped with industry-leading solutions to maximize efficiency and take all available revenue opportunities is crucial.
As the new year begins it is time to get ahead, not get left behind.
At Lighthouse, we understand hoteliers’ challenges and are committed to providing the leading commercial platform for the travel & hospitality industry, to help you stay in front of your competition.
Contact us today to learn how we can help you optimize your commercial performance.
About Lighthouse
Lighthouse (formerly OTA Insight) is the leading commercial platform for the travel & hospitality industry. We transform complexity into confidence by providing actionable market insights, business intelligence, and pricing tools that maximize revenue growth. We continually innovate to deliver the best platform for hospitality professionals to price more effectively, measure performance more efficiently, and understand the market in new ways.
Trusted by over 65,000 hotels in 185 countries, Lighthouse is the only solution that provides real-time hotel and short-term rental data in a single platform. We strive to deliver the best possible experience with unmatched customer service. We consider our clients as true partners—their success is our success.
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