It’s been just over a year since Covid-19 became a global pandemic in April 2021. Hotels are finally starting to see some signs of life reflected in hotel bookings. According to market research by Guestcentric and Great Hotels of the World, published in the 13th edition of the Hotelier PULSE Report, booked nights in March 2021 outgrew bookings in March 2020 by 14%.
However, ongoing hurdles with vaccination distribution in Europe clearly have an impact on the industry sentiment. The April 2021 edition of the Hotelier PULSE Report shows more hotels are in a complete shutdown, combined with the increasing expectation that international travel will not resume in 2021.
The number of hotel closures has increased by 2,5% since March 2021, from 38% to 40,59% in April 2021. This number is steadily gaining ground with hotels currently operating with major restrictions at 43,56%, down 9% from 52% in March 2021. Resorts currently represent the majority of hotels (51,72% out of all property segments) in complete shutdown. The majority of City Center Hotels (43,75%) and Bed & Breakfasts (58,33%) are currently operating with major restrictions.
In addition, the expectation that international (business and leisure) travel will resume in 2021 continues to decline. Of Hoteliers surveyed for the April 2021 edition of the report, just 27.37% expect international travel to be a significant contributor to their recovery. Of these, just 22.11% expect international leisure to contribute to recovery, and a meager 5.26% expect this of international business travel.
Domestic travel, on the other hand, continues to grow since 2020, and currently comprises 58% of total hotel bookings in 2021 – year-to-date. Of Hoteliers surveyed, 72.63% expect domestic travel to contribute to the industry’s recovery. Of these, 60% expect domestic leisure travel to bolster recovery, while just 12.63% expect this of domestic business travel.
In the face of continuous change and uncertainty, the industry continues to adapt to this market demand. The majority of Hoteliers surveyed report increased focus on ‘Creating Special Offers & Packages’, ‘Redesigning Sales & Marketing Strategies to reach New Markets’, and ‘Shaping Offers around the Local Market’. The 13th edition of the report also reveals an increase in the industry’s expectation to hold the line on price and invest in marketing over the next 12 months.
On a more optimistic note, Hoteliers also seem less concerned with issues that dominated the industry when disaster struck in 2020, such as Tighter Budgets, Health & Safety, and Flight Capacity. The industry appears to be confident that there will be enough air capacity to cater to the pent-up travel demand when restrictions ease.
Speaking at the March 2021 COLLECTIVE #HotelierPULSE session co-hosted by Guestcentric & Techtalk.travel, Steffi Breitsprecher, Director of Revenue & Distribution at MEININGER Hotels, agreed with this outlook.
“Based on the current signals from consumers, I think this is no longer a question of demand. Rather, it is a question of how quickly the vaccination program will roll out globally and everyone is free to travel again. Apart from the more vulnerable groups, people are not afraid to travel. However, everyone is also waiting for travel bans to be lifted. When that happens will depend on many factors,” she said.
Despite optimistic signals of pent-up travel demand, hotels are still at the mercy of ongoing travel restrictions and regulations. As a result, the expectation for financial recovery to 2019 levels is increasingly far-off, with more hotels now expecting this to occur in 2023.
When asked about her expectation for the industry’s financial recovery to 2019 levels, Steffi added: “At this stage, I can only speculate that 2021 should not be worse than 2020. In the autumn, I hope most people will be vaccinated and free to travel. In 2022, we may start to see a slow and steady ascent in terms of revenue recovery. Our books already register a significant volume of bookings for the next school term – September onwards.”
However, she expressed skepticism at the notion the industry will recover to 2019 levels in less than three years. “Only in 2023, we may begin to see some signs of revenue back to normal. Back to 2019 levels would be great, and the demand is likely to reach those levels. But although supply is coming, we must acknowledge that 2019 was a record-breaking year.”
She continued, “Although we hope that 2023 will reach the 2019 benchmark, we must also acknowledge there have been significant changes to the industry during the pandemic. We need to see how recovery will develop globally, not just in some regions like Europe and the US but in Asia too. We will also need to review how corporate business develops because everything is now virtual.”
But despite the reduced business travel and the increased leisure demand across the industry since 2020, Steffi also argued that city hubs will likely be the first to recover when restrictions ease. “Depending on vaccination distribution, I do believe City Center Hotels will be the first segment to financially recover in the upturn. People want to be around other people, and enjoy the little ‘city life’ experiences we once took for granted – such as drinking coffee in a vibrant and bustling downtown cafe.”
She added: “We will certainly see more families and young people coming into the city after being cooped up in lockdown. Supply is also coming in, with new openings over the next years. Let’s see how fast we recover.”
Although skeptical that the industry will recover to 2019 levels in 2023, Steffi maintained that Hoteliers should use this time to turn the current challenges into opportunities. “Overall, I do believe it will likely take us longer than 4 years to completely reach 2019 levels. But given how most hotels are reviewing their technologies, operations, and sales, implementing more consolidation, the impact could also be a positive one,” she concluded.
What will the Industry Outlook be in April 2021?
Each month, Hoteliers worldwide are invited to participate in the ongoing Hotelier PULSE Report project. This community of industry decision-makers continuously shares vital information to help the industry on the road to recovery. Hoteliers who would like to contribute to the 12th Edition of The Hotelier PULSE Report are invited to do so here*.
About the Hotelier PULSE Report
Since the launch of The Hotelier PULSE Report series in April 2020, Guestcentric has surveyed thousands of Hoteliers on key issues that remain top-of-mind since the start of the Covid-19 crisis, such as occupancy, ADR, financial recovery, Health & Safety, and redefining Sales & Marketing strategies for the future.
For the 13th Edition of The Hotelier PULSE Report, we surveyed 109 key decision-makers at hotels. Group CEOs/ Property Managers represent the majority of our respondents at 35,78%, followed by at 25,69% of General Managers. The remaining respondents include Front Office Managers (15,60%), followed by Sales Directors and Revenue Managers ( each at 7,34%), Marketing Directors & Managers (5,50%), and IT Managers (2,75%). The overwhelming majority of our respondents come from Europe (87,16%); followed by North America (10,09%), Africa (1,83%), and South America (0,92%) The ‘City Center Hotel’ segment is where most of our respondents come from at 48,62%, followed by Resorts (29,36%), and Bed & Breakfasts (22,02%).
GuestCentric is a leading provider of cloud-based digital marketing software and services that help extraordinary hoteliers promote their brand, drive direct bookings and connect with customers on all digital platforms. GuestCentric’s all-in-one platform provides hotels with the only unified solution for managing their guests’ online journey: award-winning, high impact websites; an integrated, easy-to-use booking engine; social media marketing and publishing tools; a GDS chain code and a channel manager to offer rooms on Amadeus, Booking.com, Expedia, Galileo, Google, Sabre, TripAdvisor and hundreds of other channels. GuestCentric is a proud provider of solutions that maximize direct bookings to hotel groups and independent hotels from collections such as Design Hotels, Great Hotels of the World, Leading Hotels of the World, Relais & Chateaux, Small Luxury Hotels and Small Danish Hotels. GuestCentric is featured on Skift Travel Tech 250, a list of the top 250 travel tech companies shaping the modern-day travel experience.