Stamping the snow off your boots in March may have you thinking thoughts of guaranteed sun this summer, but our latest Hotel Guest Survey suggests that the domestic market may continue to be buoyant, galoshes notwithstanding.
Our most recent report on consumer behavior toward the end of last year found that thoughts of vacations were easing those chilly nights, with 81% of those asked having already booked a leisure break on home United Kingdom soil or saying they are likely to. This was down one percentage point from the same period in 2021, but it is still an endorsement and above the figures for overseas leisure plans.
Guests are gearing up for summer plans, and hoteliers need to be savvy to grab their share of wallet.
City breaks, adventure and beaches and resorts were the strongest reasons for a domestic jaunt, with hotels being more attractive than any other accommodation option. That's good news for the sector at a time when it is enjoying some of its highest-ever revenue per available room.
Wallets under pressure may have been responsible for a slight cooling of this metric in January, but that might also help to keep vacationers within the U.K.
The British Chambers of Commerce has forecast that the economy will shrink in 2023 by much less than previously expected, but the recovery will remain weak with predicted growth for 2024 revised down. The rate of inflation is expected to ease as the year goes on.
But what matters most is perception.
How many tomatoes people can afford will make them guard their spending, but prominent bad news stories about the economy will also give pause; stories about queues at the Eurotunnel and possible strikes on the border will likewise give pause. Those planning a break may want to put down the news and pick up their summer reading early.
Our study found that both hotel websites and online travel agencies were succeeding in their messaging around being the cheapest booking channel, at a cost to online review sites. OTAs were making a more successful case, while belief that going direct garners the best rate has remained flat since 2021.
While the leisure traveler is less likely to be a member of a hotel loyalty program, we found that they are growing in their appetite, with membership of at least one program claimed by 45% of respondents. This compares with business travelers, where 58% were members in 2022, compared with 59% in 2020 after a previously steady climb.
Translating frequency into loyalty is one of the great challenges facing the hotels sector at the moment.
Our research found Hilton Honors had the most awareness of all the programs on offer, followed by Expedia Rewards and Hotels.com rewards, both offerings that pride themselves on their simplicity. Expedia Rewards follows a simple “one pound for one point” principle, which users can understand.
There have been efforts in recent years to simplify hotels’ programs, but they continue to have an image akin to airline loyalty program — a lot of points and levels for not much return. Traditionally focused on road warriors who trade points gathered on multiple work stays for leisure breaks, they were not created with the infrequent leisure traveler in mind.
“Earn and burn” was a phrase we all learned before the pandemic, with points swappable for coffees and treats smaller than a whole night — possibly not with breakfast — but we have yet to see evidence that points are being cashed in like this.
Back to those snowy boots. We have found that, increasingly, climate change is being seen as a motivating force behind booking vacations, with “flygskam,” or “flight shame,” creeping back into the vernacular now that the burst of post-pandemic travel is calming.
Our previous research on sustainability and decision-making reported that, given the choice between similar accommodation choices, both with sustainability at their core, an overwhelming majority chose a sustainable hotel. This was the same when the hotel rate went up 5%, but of course hoteliers need to communicate to guests what sustainability initiatives they have in place so that guests can make an informed choice.
I say that because few properties give their sustainability credentials pride of place.
There is no mainstream sustainability rating system, and most providers would promote experience, price, loyalty schemes and other factors ahead of sustainability. Without hotels making sustainability information easily available at the moment of guest decision, it cannot become a decision-driver, though it seems to be evolving into a deal-breaker.
Sustainability announcements also need to be credible.
Guests are aware of greenwashing, and they may not have been convinced that just using the same towels over and over was saving the planet as much as hotels suggested.
The work of the Sustainable Hospitality Alliance, in particular, is going be crucial in the coming decade in terms of ensuring hotels realize the scale of the opportunity that will open to them if they get it right, and the scale of the opportunity they will lose if they do not.
So, this summer, when you are competing for the summer break that consumers are clinging to, remember that much like the Northern European weather, there are no guarantees.
James Bland is director at market-research and business advisory firm BVA BDRC.
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