USA Summer Trip 2022 | McKinsey

Summer 2022 is likely to be a boon for US travel and tourism. The following five key trends are shaping the industry, with implications for hotel owners.

Leisure travel is booming

Revenue per available room (RevPAR) in the US is exceeding not only 2020 and 2021 levels, but also increasingly 2019 levels. RevPAR outperformance is largely driven by rates. Hotels are not as full as they were in 2019, but rates have risen: the average daily rate (ADR) is about 15 percent more expensive now than in 2019.

Basically, people like to travel. We asked more than 1,000 U.S. travelers what they would do if they won the lottery, and spending on travel was the second highest choice (Figure 1).

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This summer, for many, the holidays will pass “no matter what”

The survey also revealed that people are concerned about macroeconomic factors such as inflation, but this is not enough to prevent nearly 70 percent of travelers from taking their vacation this summer (Figure 2).

Three words define traveling this summer: no matter what.
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Are gas prices high? People will go somewhere closer. Are hotel prices prohibitive? They will look for a deal. Consumers may find ways to cut back, but these factors won’t ruin their vacation plans (Figure 3).

Inflation may cause some travelers to stay closer to home, although this is not expected to significantly disrupt vacation plans.
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Since the survey was conducted in June 2022, travel plans have been put in place. AAA estimated that 42 million people will travel by car during the Fourth of July weekend, a new record for car travel volume for the period, despite national average gas prices above $5.

In addition, hotel occupancy, ADR and RevPAR numbers exceeded the comparable week in 2019, and TSA checkpoint travel numbers showed a 15 percent increase for the Thursday and Friday before of the 4th of July weekend, compared to 2019.

Guests have more accommodation options than ever before

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The lines have blurred between accommodation categories and travelers are looking for hotel, home share, all inclusive and outdoor/glamping options.

While 78% of travelers surveyed say they are comfortable staying in a hotel, only 61% are comfortable staying in alternative accommodation. The top five reasons for staying in a hotel include consistency and predictability; security and privacy; convenient location; availability of concierge, lounge, restaurant and/or other amenities; and lower cost. In comparison, travelers can choose alternative accommodation options as they offer more space; household appliances; and an authentic or local experience.

So where are these travelers planning to go? More than half (54%) plan to go to the beach, a popular choice among 25-34 year olds. The next most likely destination (32%) is a city/urban location, followed by a mountain/hiking trip (24%).

Loyalty is heating up

In this environment of higher prices and more choices, efforts to maintain customer loyalty intensify. But the survey shows that many travelers, especially the younger generation, don’t think they get enough value from loyalty programs or that the programs seem too complicated.

There are some features of loyalty programs that matter more than others: offering discounts, having the right footprint so guests can stay where they want, and making it easy to redeem points are favorites.

ESG is gaining importance

While 75 percent of travelers surveyed agree that sustainability is important, only half would pay more for it. But younger travelers are much more willing to pay more for green initiatives. These initiatives that currently resonate best with guests include using eco-friendly cleaning products; replacing plastic key cards with alternatives; reduction of paper use, eg electronic receipts; and intelligent appliances and monitoring systems to optimize energy consumption.

Five ways hotels could respond to these trends

  1. Encourage “bleisure” stays by highlighting local attractions and events. With the rise of leisure and the recovery of business travel, we expect to see an increase in pleasure travel.
  2. Help guests find you when they’re researching their next trip. Hotels can invest in their online and social media presence to communicate with potential guests early in their search. This is especially important as hotels face labor shortages and sometimes reduce service levels – communicate transparently to ensure guest expectations are properly set before guests guests set foot on the property.
  3. In markets with a large supply of alternative hosting, communicate the differentiators. Hotels can communicate what makes them better, especially comfort, consistency and available amenities.
  4. Update loyalty programs. Hotels may need to review their loyalty programs to ensure they are responsive to new needs and help frequent and infrequent guests get the most out of their programs.
  5. Launch green initiatives with clear and consistent communication with guests. Hotels can think about how to attract green travelers and build meaningful relationships with them that lead to long-term loyalty.

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