US summer travel 2022 | McKinsey

Summer 2022 is likely to be a good one for travel and tourism in the US. 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 outstripping not just 2020 and 2021 levels, but increasingly 2019 levels too. RevPAR outperformance is largely driven by rates. Hotels aren’t quite as full as they were in 2019, but rates have increased—the average daily rate (ADR) is around 15 percent more expensive now than it was in 2019.

Essentially, people love to travel. We asked over 1,000 travelers in the US what they would do if they won the lottery, and spending on travel ranked as the second highest choice (Exhibit 1).

While near-term travel beyond this summer is not yet clear, we have conviction in an enduring truth: Everyone loves to travel.

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This summer, for many, vacations will happen “no matter what”

The survey also revealed that people are concerned about macro-economic factors such as inflation, but this is not enough to stop almost 70 percent of travelers from taking their vacation this summer (Exhibit 2).

Three words define travel this summer: No matter what.

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Gas prices are high? People will go somewhere closer. Hotel prices prohibitive? They’ll hunt for a deal. Consumers may find ways to cut back, but these factors will not ruin their holiday plans (Exhibit 3).

Inflation may cause some travelers to stay closer to home--though this isn’t expected to meaningfully disrupt vacation plans.

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Since the survey was conducted in June 2022, travel plans have been put in motion. AAA estimated that 42 million people would be travelling by car over the July 4 weekend, a new car-travel volume record for this period—despite national average gas prices exceeding the $5 mark.

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

Guests have more accommodation options than ever


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

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

So, where are these travelers planning to go? Over half (54{e9f0aada585b9d73d0d08d3c277fd760092386ec23cac37d50f4b8cd792b062a}) plan to go to the beach—a popular choice among 25 to 34 year-olds. The next most likely destination (32{e9f0aada585b9d73d0d08d3c277fd760092386ec23cac37d50f4b8cd792b062a}) is a city / urban location, followed by a mountain / hiking trip (24{e9f0aada585b9d73d0d08d3c277fd760092386ec23cac37d50f4b8cd792b062a}).

Loyalty is heating up

In this environment of higher prices and increased choice, efforts to maintain customer loyalty are intensifying. But the survey shows that many travelers, particularly the younger generation, don’t feel they get enough value from loyalty programs, or 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 to, and making it easy to redeem points are the favorites.

ESG is gaining importance

While 75 percent of travelers surveyed agree that sustainability is important, only half would pay extra for it. But younger travelers are far more willing to pay extra for green initiatives. Such initiatives that currently resonate best with guests include the use of eco-friendly cleaning supplies; replacement of plastic key cards with alternatives; reduced use of paper, e.g., electronic receipts; and smart appliances and monitoring systems to optimize energy usage.

Five ways hotels could respond to these trends

  1. Encourage “bleisure” stays by highlighting local attractions and events. With leisure booming and business travel recovering, we expect to see a rise in bleisure 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 on in their research. This is especially important as hotels face labor shortages and sometimes cut back on service levels: communicate transparently to make sure guest expectations are set appropriately before guests set foot on property.
  3. In markets with heavy alternative accommodation supply, communicate differentiators. Hotels can communicate what makes them better, especially convenience, consistency, and available amenities.
  4. Upgrade loyalty programs. Hotels may need to relook at their loyalty programs to make sure they’re addressing new needs, and helping both frequent and infrequent guests make the most out of their programs.
  5. Launch green initiatives with clear and consistent guest communication. Hotels can think about how to attract eco-conscious travelers and build meaningful relationships with them that will lead to long-term loyalty.