6 trends shaping the
travel landscape

In last year’s report, we discussed five emerging hospitality industry trends: value-driven decisions, the virtual front desk, hybrid hospitality, new search habits, and the rise of experiential travel. This year, we anticipate these trends to continue, along with six newer developments poised to reshape the travel landscape. 

These hotel industry trends include a resurgence in lagging market segments, an uptick in inflation-busting travel hacks, and new spins on experiential travel. We also anticipate continued growth in the short-term rental sector (despite rumors to the contrary), new efficiencies driven by generative AI, and growing demand for new skills among next-generation hoteliers. 

While the economy seems poised to dodge a recession again this year, that doesn’t mean it will be smooth sailing for hotels. As we observed in the previous section, travel patterns are changing, travelers are more price-sensitive, and demand may soften. Under any market conditions, it’s the hoteliers who monitor the latest trends and data closely, act quickly to seize opportunities, and offer a distinctive guest experience that will outperform the market. 

The comeback: Straggling segments catch up

Since the pandemic, leisure demand has been so strong it has been easy to overlook other market segments that have been slower to rebound. However, with growth in leisure travel now at a virtual standstill, all bets are on a triple threat of market segments picking up the slack: international, corporate, and group travel. 

Here come the big spenders

In 2023, international tourism reached almost 90% of pre-pandemic levels, setting the stage for a full recovery in 2024. Inbound tourists tend to stay longer and spend as much as 90% more than domestic travelers, according to Aoife Roche of STR, speaking at Cloudbeds’ inaugural Passport UserCon. She also noted that strong demand from Asia Pacific is likely to fill any gaps in other regions. 

Back to business travel

After stalling and sputtering in recent years, global business travel is forecasted to zoom past pre-pandemic spending levels in 2024. Some of the recovery will be fueled by rate growth, whereas travel volume may still lag behind 2019 numbers. China is expected to lead the charge, reclaiming its position as the No. 1 outbound business travel market in the world. 

The more the merrier

Group travel made strong strides in 2023, and the momentum is anticipated to continue through 2024. This includes not only conference travel and small regional meetings but also team-building events, social groups, and group trips to sporting events like the Olympic Games in Paris. However, groups might not hit their usual haunts. Many conferences and events have shifted from large, urban cities to smaller, secondary markets, according to Hilton.

What does this mean for independent properties?

Chasing demand is about finding new business opportunities, and these market segments offer valuable ways to strengthen hotel performance. International travelers are generally less price-sensitive than domestic travelers, and they tend to stick around for a while. As our data indicates, more business travelers are working remotely and combining leisure activities on trips (bleisure travel), increasing the average length of stay. And groups often book well in advance, providing a solid base upon which to build higher-rated business and implement smart pricing strategies.

Even properties that don’t host a lot of groups or business travelers can benefit from the compression they bring to a region. The local convention & visitors bureau (CVB) can keep hoteliers up to date on upcoming events and conferences, providing advanced notice of opportunities to increase rates.

Hotels that cater to diverse market segments enjoy stronger year-round demand and are better positioned to weather a softening in one or more segments. In 2024, the time may be ripe to start spreading the love.

Inflation who? Travelers trade up

Inflation is heavy on the minds of potential guests these days. Nevertheless, surveys indicate that people are unwilling to sacrifice travel or compromise on their tastes. Instead, they’re finding creative ways to trade up travel experiences.

Aspirational luxury

To experience a richer lifestyle on the road than at home, millennials and Gen Z are employing money-saving hacks such as traveling off-peak, during the week, and closer to home. Some are choosing destinations where the cost of living is relatively low, whereas others are buying a day pass or enjoying drinks at a luxury hotel (and posting proof on Instagram) while staying at a more affordable property.

Close enough: The quest for dupes

Popularized on TikTok, a dupe refers to a more affordable alternative to a popular but pricey product. Not only are dupe destinations less expensive, they also tend to be less crowded and less predictable. For travelers, this might mean choosing Quebec City over Paris or Liverpool over London. Already, one in three travelers has booked a dupe, according to Expedia. 

Postponing the payment, not the trip

“Buy Now, Pay Later” (BNPL) is the fastest-growing form of payment in the U.S. In travel, service providers like Affirm and Afterpay have partnered with Booking.com, Expedia, Airbnb, and select hotel companies to offer BNPL options, and the list is growing fast. In a survey from Atmosphere Research, four in 10 travelers said that a BNPL option had made it possible for them to take a trip.

What does this mean for independent properties?

While travelers may seek bargains in 2024, hospitality brands still have bills to pay and staffing to manage. Meeting demand for deals will require finding imaginative ways to make travelers feel they are paying less without slashing room rates.

Rather than being on sale all the time, hotels can protect rates with initiatives like restricting discounts to times of low demand and sourcing desirable business like advanced bookings and extended stays throughout the year. Reduced increments for premium hotel rooms and suites can entice aspirational travelers to trade up, while charging premiums for conveniences like flexible cancellation, early check-in, and late check-out can boost profitability.

Often it’s the little extras and unique experiences that hotel guests remember most, especially when on a tight budget. Throwing in value-adds such as an upgrade, free parking, welcome cocktail, or room amenities can improve guest satisfaction without costing the hotel a lot of money. Additionally, offering a BNPL option will attract more bookings, especially if the economy slows down.

The experience IS the destination

According to the old adage, it’s about the journey, not the destination, but in 2024, it’s all about the experience. After years of post-pandemic binge-buying, consumers are moving on from collecting stuff to collecting experiences. Here are three standout trends we’re observing.

Tour tourism

In 2023, world tours by Taylor Swift and Beyoncé demonstrated the power of tour tourism, bringing hotels significant bumps in revenue and occupancy wherever they touched down. Hotels can expect an encore in 2024, with more shows from Tay Tay as well as Coldplay, Madonna, Pink, and other headliners hitting the global tour circuit. Almost 70% of travelers say they are more likely than ever to travel to a concert outside their hometown, according to Expedia. 

Memorable meals

This year, travelers are showing an insatiable appetite for culinary tourism. According to Skyscanner, 47% of U.S. travelers have booked a destination purely to visit a specific restaurant. For some, this may be experiencing Noma in Copenhagen, reputedly the world’s best restaurant, before it closes at year-end. For others, it may be heading to steamed dumpling stalls in Nepal, produce markets in Vietnam, or Cajun food trucks in New Orleans. 

Splashy trips

After last year’s record-breaking temperatures, more people will retreat to water destinations this year. But this is about more than lounging on floaties in the hotel pool. Activities on the roster include wild swims with dolphins in Mauritius, eco-diving among the mangrove forests in Yucatan, winter swims in Norway and Estonia, and island-hopping by front crawl in the Adriatic.

What does this mean for independent properties?

To tap into the experience trend, hotels should promote their proximity to popular activities, whether it’s a concert venue, popular restaurant, or unique attraction, on social media or other hotel marketing channels. Nearly two-thirds of travelers say they often or always book their hotel based on access to local experiences, according to Hilton.

Another effective tactic is to package overnight stays with tickets to a show, a dinner voucher for a local restaurant, or even concert swag. During the Eras Tour, Loews Hotels enticed Swifties to its properties by offering Swift-inspired cocktails, playlists, bracelet-making lessons, and photo backdrops. 

By signing up for notifications of upcoming concerts, sporting events, and festivals, hoteliers will receive a heads-up to raise rates and implement stay restrictions when demand is expected to spike. Properties can also utilize business intelligence and revenue management systems integrated with their property management system (PMS) to track events and update rates in real time. 

At the same time, operators should be careful not to neglect the most important experience of all: the guest experience. Unique, localized experiences are a major reason why travelers choose independent hotels over brands.

Airbnbust? Long-term obstacles for short-term rentals

After substantial growth during the pandemic, the short-term rentals (STR) sector is experiencing serious pushback. Is this the beginning of the end?

Traditionally, a major draw for private rentals has been value: more space for less money. However, the pricing gap with hotels has narrowed, and travelers have been grumbling about misleading pricing tactics. Airbnb, in particular, has been assailed for advertising low prices only to produce sticker shock when fees are tacked on at checkout. 

At the same time, governments have been cracking down on STR operators, capping the number of licenses issued and the number of days properties can be rented out per year. New York City is the latest city to throw down the gauntlet, with strict new regulations that bar hosts from renting out an entire home and require them to be present during the guests’ stay. 

As a result of all this activity, whispers of an apocalyptic “Airbnbust” have spread online. Upon closer inspection, however, it appears that reports of the death of short-term rentals have been greatly exaggerated. 

While some secondary markets have experienced a glut in supply, overall demand has increased, while hotel rates climbed faster than rental rates last year. Reporting last year on the company’s most profitable third quarter in history, CEO Brian Chesky remarked, “I think we’re only scratching the surface.” The company also introduced transparency measures to display the total price, including fees, at the beginning of listings. 

What does this mean for independent properties?

Generative AI: Trusted travel advisor and 24/7 intern

2023 was the year generative artificial intelligence (AI) went mainstream. Since launching in late 2022, ChatGPT has amassed more than 180 million users worldwide. Not to be outdone, Google launched Gemini in December, an AI chatbot that comprehends and generates not only text but also audio, video, and images.

What’s truly exciting about AI chatbots is their potential as a trusted travel advisor, providing personalized information and recommendations on everything from flight routes to accommodation choices based on the traveler’s budget and preferences, as well as acting as a translator, tour guide, and concierge. For example, Navan has launched Hotel Concierge by Ava, an automated virtual assistant that provides recommendations tailored to the traveler’s individual preferences and booking patterns. 

However, one of the most significant impacts of AI is perhaps its potential to revolutionize the operational efficiency of independent hotels. Technological advancements have democratized access to AI tools, with forward-thinking tech providers creating innovative products with advanced AI and machine learning. This shift is fostering a new era where hotel operators, regardless of size, can harness new technologies and apps to streamline operations and accelerate efficiencies. 

In 2024, we can expect AI to be meaningfully integrated into technology solutions to improve day-to-day operations for hotel brands. From guest communication to revenue management and digital marketing, hoteliers will be able to use AI to enhance productivity and automate workflows, leaving more time for strategic decision-making.

What does this mean for independent properties?

Adapt or go obsolete: Next-gen hoteliers upgrade their skills

The future of hospitality is changing, and a driving force is technology. Travelers are using more technology to plan trips and experience destinations, and hoteliers are using more technology to operate their properties and serve their guests. 

Today, technology automates an increasing array of tasks for hotel employees, from taking reservations, to updating rates and availability, to messaging and checking guests in and out. While humans are still running the show, roles and responsibilities are evolving. From front desk staff to general managers, the challenge today is to find one’s place in a tech-centric world. 

Growing demand for diverse skills

The irony of it all? The range of skills required of hotel staff has expanded, not contracted. Technology doesn’t replace the skills employees have always needed to be successful – hard skills like technical aptitude and soft skills like empathy, creativity, and teamwork. But it also demands an array of new skills.

Today’s hospitality leaders must be more technical, able to operate dozens of applications used in the hotel environment today. They must be more analytical, able to extract meaning and insights from massive amounts of data. And they must be more strategic, finding the ideal balance between technology and human touch that keeps guests and teams happy and loyal (while dealing with labor shortages). 

There is also increasing demand for knowledge and skills in emerging tech fields such as generative AI, cloud computing, robotics, cybersecurity, internet of things, and virtual reality.

Listen to a clip from The Turndown to hear Dr. Stowe Shoemaker (PhD Cornell University) discuss his thoughts on the convergence of hospitality and business and how we can prepare the next generation.

What does this mean for independent properties?

It’s time to rewrite the rules

When travel behavior shifts, hoteliers must change how they do business if they wish to stay competitive. In 2024, this means letting go of old habits and embracing new ways of doing things – in marketing, revenue management, operations, guest experience, and across the organization. 

The backbone of successful hospitality businesses is modern technology. No longer can independent hoteliers allow themselves to be held back by manual processes and outdated software while competitors down the street leverage the speed and efficiency of automation and cloud technology. 

Nor can hoteliers rely on continued customer satisfaction and loyalty without unified data to understand and cater to guest preferences. To stay competitive, hotels need an integrated hospitality platform that is built to serve their unique needs and is scalable as their business grows and evolves.

Over the past decade, Cloudbeds has evolved from a scrappy startup to an industry leader by rewriting the rules. Today, we encourage our hotel partners to follow a similar path. More than ever, our team is committed to providing best-of-class technology to empower hoteliers to chase demand and elevate their businesses through the art of hospitality.