Inflation is No Deterrent for the Majority of Travellers
As business started picking up again after the pandemic, inflation and the cost of living crisis worsened, threatening more uncertainty for the hospitality industry. However, contrary to what may have been expected, inflation is not putting travellers off.
Travel has become a bigger priority for some consumers than it was before the pandemic, with many considering it an important factor in maintaining their mental health. Even those who are feeling the effects of the current economic situation are continuing to prioritise travel by cutting back on other costs.
In this article, we’ll explore more about consumer attitudes to travel post-pandemic and what that means for your property.
How Do Travellers Feel About Inflation?
The 2022 Changing Traveller Report – a survey of 8,000+ travellers in Australia, China, France, Germany, Indonesia, Italy, Spain, Thailand, UK, USA – has revealed that “the urge to travel is a stronger force than rising inflation”. For the majority of respondents, inflation is having moderate to no influence on their travel and accommodation decisions.
Key insights from the report include the following:
- 87% of travellers are happier when anticipating travel
- Of that 87%, 33% said that travel was somewhat important for their mental wellbeing, 27% said it was important, 18% said it was very important, and 8% said it was extremely important.
- 85% of travellers (91% of bleisure and 82% of leisure travellers) are comfortable with spending extra during their next stay, with breakfast, views and room size being the top three add-ons customers would pay for.
These figures show how much people now value travel and that many are not looking to scrape by and make compromises on their experience in order to save money during the current economic situation.
Travel During the Holiday Season
What are the projections for this holiday season? Research by PwC has shown that 74% of 4,000 survey respondents said they intend to spend the same or more this holiday season compared to last year.
The research also showed that millennials will be spending more on travel than any other generation and high-income households have not changed their spending habits in the last few months. Even consumers that are spending less overall are still not deterred – instead, they’re making cut backs leading up to the holiday season because they prioritise travel.
The segment of customers that are apprehensive about the increased cost of travel are not necessarily going to avoid it altogether; instead, there may be a rise in domestic travel as many countries saw during the pandemic.
International Travel
One of the major trends observed when the pandemic started to ease up was the desire to travel to unique and off-the-beaten-path destinations – places that offer something different than what we are used to and that can give us a new perspective on the world.
For many international travellers, Australia is such a place. International travel to Australia is increasing, even though it is nowhere near pre-pandemic levels. However, the situation looks promising – data from the end of August 2022 (well after inflation kicked in) shows international arrivals of a year-on -year increase of 985.9%.
How to Make the Most of Customers’ Travel Cravings
People are eager to explore new places and make up for lost time, but what are their new preferences and how can your property cater to them?
- Continue to Invest in Digitisation
Since the demand for travel is not slowing down, properties should continue to invest in digitisation to improve overall efficiency and provide a better guest experience. Digital folders, check-in kiosks, and keyless entry are becoming commonplace, helping to reduce operational bottlenecks and save resources. These options are no longer just “nice-to-have” – consumers have adjusted to contactless experiences due to the pandemic and now expect hotels to provide these options, so take care to ensure that your Property Management System can fulfil their evolving needs.
Digitisation does not just save time and improve efficiency – making use of chatbots allows you to gather vast amounts of data which can be analysed to gain insights into customer preferences and find common themes in their feedback. Insight is the key to staying afloat during uncertain times, so now is the time to collect as much data as possible and use advanced analytics solutions to extract patterns and make sense of complex relationships between data points.
- Boost Your Bookings and Optimise Rates
A robust booking engine and channel manager are important for capitalising on the opportunity that the public’s voracious need to travel brings. As well as getting bookings from multiple channels, direct bookings provide more options for engaging guests post-stay and of course, is more profitable.
A good booking engine tracks the performance of your booking pages, analyses the effectiveness of marketing campaigns and reveals valuable insights about consumers’ interaction with it. Our booking engine does all of that and more – it’s customisable to match your branding and integrates seamlessly with our channel manager, ensuring your rates and availability are always accurate and up-to-date.
While the economic situation is not putting travellers off, the data shows that more than 50% are willing to spend more time searching for competitively priced accommodation than before the pandemic. So, while guests are willing to pay more for rooms (at least for now), it’s important to optimise rates to ensure you have the edge over the competition.
Rates should be determined in real-time based on analytics that take into account numerous factors including supply and demand, customer loyalty, and competitor pricing. Using a revenue management system takes care of that for you.
To ensure customers return, it’s vital to make the best impression possible and ensure they are getting the value for money they expect. This will leave them with a positive impression that will make your property stand out as prices continue to rise. They may feel that it’s worthwhile to continue travelling and will choose your property over your competitors’ in future.
To increase the perceived value guests are getting from your establishment, small touches such as leaving a welcome note or a complimentary bottle of water can make a big impact. Many hotels have stopped offering room service (aside from luxury properties) – with this dwindling luxury service, it’s important to do something to make the experience feel special and out of the ordinary.
You can also partner with other local businesses to create offers on unique experiences and of course, providing excellent service is key – ensure that staff go the extra mile to be friendly and approachable.
Finally, be sure to analyse data from customer feedback to gain insight into their evolving needs and preferences.
- Analyse Costs and Optimise Resources
While inflation is not putting travellers off so far, its overall effects cannot be ignored. Many properties are now removing menu items that are not selling well or reducing order quantities, as well as exploring alternative suppliers to find better deals and generally cutting back on services that are under-used. Taking steps towards improved sustainability (such as going paperless) is another way to reduce costs.
Analyse the key segments of your customer base to get deeper insights into what they want and what they can do without and make adjustments accordingly.
- Exceed Guest Expectations
There are so many ways to improve guest experience: personalisation, cleanliness, accessibility, menu choice and consistent service are all great places to start. In addition, be sure to analyse the trends within major guest segments to see which services to invest more in and which to scale back on.
Unfortunately, the trend of booking to cancel is still occurring. Therefore, optimising the guest experience is vital in deterring guests from doing that and following through on their decision to stay at your property.
The 2022 Changing Traveller Report also revealed that the majority of guests are happy to have post-stay communications and continue to build a relationship with accommodation providers, especially guests staying in boutique or luxury hotels. Make sure you consider this part of the customer journey and use it as an opportunity to win guest loyalty.
Younger guests have developed different expectations to those of the older generations. While millennials expect digital check-in services, those in older age brackets may prefer human contact. It’s important to cater to both groups, and this highlights an important point overall – providing guests with options. Preferences vary widely in many aspects, so it’s important to make data-driven decisions on how to cast the net wide and please as many guests as possible.
Another example – while some properties have sustainability policies where housekeeping is carried out less often than daily, older guests that are comfortable with the way it used to be may appreciate the choice to opt-in to daily housekeeping. Likewise, environmentally conscious guests will want the option to opt-out of daily housekeeping in properties where it is still the norm.
Conclusion
Inflation is not stopping travel and, while we cannot know with certainty what the future holds, it’s good news for the industry that higher prices are not deterring consumers. To make the most of the situation, properties need to ensure they are adequately equipped to get more bookings and charge the optimal rates, while ensuring that guests have unforgettable experiences that keep them loyal for years to come.
To find out more about how our Property Management System can maximise your bookings and make your processes more efficient, contact us today.
roomMaster Anywhere is an easy to use, all-in-one, pure cloud reservations software solution for hotels, motels, and guesthouses. It’s ideal for small and medium properties (or group properties) needing a pure cloud PMS, with a highly intuitive user interface with powerful rate and customer management tools. Many optional add on features are available and the PMS can be used from ANY device from desktops & laptops to smart devices. This next generation technology which is constantly evolving includes:
- Configurable booking chart with drag/drop functionality
- Group bookings with online group portals for easier management
- Auto pre and post stay emails and full guest communications
- Powerful rates management with flexible change options
- Digital Guest Registration with the ability to store identification documents
- Seamless connectivity with POS systems like H&L
- Multiple payment gateway options for easy in app payment processing
- An in-built channel manager (it can also be connected to other popular channel managers)
- A delightfully easy Book Now button
Social Suggestions:
- Consumers are willing to spend more this holiday season than last year with travel among their top priorities.
- Inflation – no problem for the many travellers cutting back on other expenses to prepare for the holiday season.
Check out our tips to make the most of consumers’ travel cravings.