Will business travel spending return to the pre-pandemic level soon?

The U.S. hotel industry reported the highest room rate in July 2022 on a nominal basis. According to the STR (Smith Travel Research) data, the key performance indicators for the industry include:

Occupancy: 69.9%
ADR (average daily rate): $159.08
RevPAR (revenue per available room): $110.73

Using June 2019 as a reference point, the industry reported a -5.4% percent change in occupancy, a +17.5 percent change in ADR, and a +11.2 percent change in RevPAR for the month. If inflation is ignored, the hotel industry had already recovered in ADR and RevPAR, exceeding the pre-pandemic level. This recovery is driven by the rate instead of occupancy.

Yet, there is no real sense of recovery without the business travelers

AHLA projected that business travelers would make up 43.6% of the room revenues for the hotel industry in 2022, down from 52.5% in 2019. That is a $21 billion difference. Although there are more “bleisure” (business + leisure) travelers in the market, the industry still needs business travelers to support its recovery.

When will business travelers come back?

It depends on how you see the market. Earlier this year, corporate travel managers observed an upward trend in booking activities for business travel. They were optimistic about the outlook. Global business travel spending is projected to have a year-to-year increase of 34% in 2022 to $933 billion. Still, that is far from the $1.4+ trillion in business travel spending in 2019.

Others are not as positive about the market outlook. A more recent update suggested that business travel spending might not recover to the pre-pandemic level after all until 2026, two years later than the earlier projection. Such an adjustment was made after inflation, labor shortage, and geopolitical issues were put into consideration.

When do you expect to see a comeback of business travel? How will business travel evolve from pre-pandemic to post-pandemic?

References

Josephs, L. (2022, April 15). Business travel spending might not return to pre-pandemic level until 2026. CNBC News. Available via https://www.cnbc.com/2022/08/15/business-travel-spending-might-not-return-to-pre-covid-levels-until-2026.html

Kwok, L. (2022, May). Groups to have robust come back 2022. The Hospitality News Magazine, 2(4), p. 34.

STR. (2022, August 19). STR: U.S. hotel performance for July 2022. STR.com. Available via https://str.com/press-release/str-us-hotel-performance-july-2022

Note: This viewpoint was also published in The Hospitality News Magazine; the picture was downloaded from Inc.com.

Comments

Luxury vs. Millennials and Their Technology: The Ritz-Carlton (By Julia Shorr)

Embodying the finest luxury experience, The Ritz-Carlton Hotel Company, LLC has been established since 1983. In 1998, Marriott International purchased the brand offering it more opportunity for growth while being independently owned and operated. They are known for their enhanced service level as the motto states, “Ladies and Gentlemen serving Ladies and Gentlemen”. The luxury brand now carries 97 hotels and resorts internationally and is attempting to keep the aspects of luxury while keeping up with the trends of the technologically improving generations. The Varying Demographics of the Target Market The Ritz-Carlton’s typical target market includes: business executives, corporate, leisure travelers, typically middle-aged persons and elders, and families from the upper and upper-middle class section of society . This infers a large range of types of travelers in which all are similar in that they are not opposed to spending extra for the luxurious ambiance. However, w...

How to Convince AI that You Are the Best Candidate for the Job

Last week, we discussed how more companies used AI to screen resumes and analyze job candidates’ performance in the initial interviews. We called for companies’ attention to the potential AI biases in hiring . This week, we will visit what job candidates can do to help AI pick us and recommend us for hiring. A. Writing a Resume Tailored to AI Screening First and foremost, job candidates must thoroughly research the job and the company to understand its job descriptions and organizational culture. From there, they can: Write the resume in Word and submit it as a Word document instead of a PDF file. Select a straightforward format and avoid using graphics, charts, or complex layouts that could confuse AI. Use headings effectively to help AI pick up the content it seeks, such as “Relevant Job Experience” and “Education.” Strategically pick the relevant keywords that match the job descriptions as the job candidates describe what they perform(ed) at work. Highlight their achievements a...

What Shall We Do When Job Seekers Cheat the AI Hiring Systems?

AI can streamline the hiring process, but concerns linger. For example, AI could perpetuate gender or racial biases in the hiring process , just like most human HR managers could do. Meanwhile, to increase the chances of being picked by AI, job candidates must prepare resumes and job interviews tailored to AI’s “preference.” When more job candidates understand how to convince AI that they are the best candidates for the job , can AI still make valid recommendations to hire the best-fit candidate in the pool? Then, if AI makes a mix of valid and invalid recommendations for hiring, will HR managers find it more challenging to select the right candidate for the job? The situation can get even more complicated if a candidate cheats the AI hiring systems. Cheat to bypass AI screening: Is it the cruelty of human nature? Job candidates are eager to get hired. Career coaches want to help. That is a good thing. Nevertheless, I have seen many free online tutorial videos teaching job candidate...

Linchi Kwok, Ph.D.

Search This Blog