Transparent and Amadeus present report on the evolution of hospitality in 2021
According to the jointly published study, the evolution of occupation through the pandemic and recovery reveals an optimistic picture
By Jade Tinsley, Head of Marketing at Transparent and Katie Moro, Vice President, Data Partnerships, Hospitality at Amadeus.
Transparent and Amadeus have combined their extensive data sets to shed light on accommodations' reactions to travel trends emerging in the wake of the COVID-19 pandemic, and together they provide an overview and analysis of what these show. data.
The evolution of occupation through the pandemic and recovery paints an optimistic outlook for the hospitality industry. The demand of the travelers recovers quickly with the relaxation of the restrictions; faster for hotels, but with a more sustained rebound for vacation rentals.
Forward-looking booked occupancy favors short-term rentals, which average 15% occupancy for the remainder of 2021, compared to hotels at 5%.
However, occupancies will likely become more comparable as registration dates approach because wait times for hotel reservations have been much lower since the start of the pandemic.
Hotels are trying to attract maximum occupancy with rates 26% lower so far in 2021 compared to 2020. Vacation rentals, on the other hand, have greatly increased the rate. An average increase of 7% year-on-year has been applied; it is likely to capitalize on demand and recoup rental income in the short term. This makes an average night in a vacation rental property currently more expensive than a hotel at around $ 150.
Traditionally, hotel rates have been higher than those for short-term rentals. An evaluation of the data uncovers opportunities for both types of accommodation.
The report reveals that a growing trend towards last minute hotel reservations. The vacation rental booking window was closer to that for hotels during the pandemic, but it appears now to be returning to pre-pandemic levels.
A shorter booking window will better position hotels to ensure higher demand during this uncertain booking climate.
Hotel and Vacation Rental Outlook
The analysis suggests optimism for hospitality in general: with demand, occupancy, rates and length of stay improving, indicators point to greater traveler confidence on the horizon.
Alternative adaptations show a strong rebound, probably supported by lower inventory volume experiencing a faster recovery. Increased occupancy with a longer booking wait time paints a clearer picture of opportunities on the horizon. Several factors shape this opportunity, including:
- Flexibility of use; Long-term rentals are a good guarantor of income.
- Greater operational mobility than hotels with fewer staff and fewer implications on operating costs.
- Increase in daily rates
- Better equipped for longer domestic stays or remote work
- More location options, especially for isolated rural stays
Increased volume of hotel inventory across a broad spectrum of destinations offers more options for travelers. While they have to adapt their marketing strategy to engage with a different traveler demographic, hotels are also on the rebound due to the demand for leisure, but they will need group and business travel to pick up speed to fully recover. Some trends we are seeing in the data:
- Travelers seeking the services and amenities only available at hotels and resorts will continue to drive the demand for leisure.
- Hoteliers now have better on-demand handling, booking windows, and are improving average daily rates accordingly.
- Flexibility in cancellation policies helps ease travelers' worries with booking travel
- Cleaning and safety precautions also bring a sense of comfort to travelers.
Current trends and conditions seem favorable for the vacation rental sector to take advantage of its growth and increase its relevance. However, it must be remembered that hotels traditionally enjoy higher occupancy and rates, and such a well-established industry is sure to rebound - crucially, absolute bookings currently remain much higher for hotels.