There are a number of factors impacting travel behaviors during the summer of 2022, including ongoing travel uncertainty, an increase in rental supply, inventory shifting traveler behavior, and an increasingly diverse mix of how, where, and when travelers book accommodations.
- Ongoing travel uncertainty: war, gas prices, epidemic and pandemic crises, etc.
- Booking pace is slower than previous years
- Accommodations’ Supply has increased
- A perceived change in the landscape about how travelers do things
- Diversifying channel mix
One of the most interesting current trends in the travel industry is a decrease of booking pace and occupancy.
Management companies across North America are reporting that booking paces are down from last year. In this article we will get some perspective around current travel behavior contributing to slower booking pace.
Slowing down of Booking Pace and Occupancy
The slowing down of booking pace and occupancy is one of this summer’s travel behaviors that haven’t got unnoticed by many.
Alex Alioto, founder of Whimstay, explains: “I don’t think that we need any type of survey to tell us that booking pace went down. Maybe your owners are telling you that, but it’s pretty poignant and I think we’re all seeing it.” However, according to the World Travel and Tourism Council, global tourism levels are pegged to return to Occupancy rates closer to 2021 than to 2019. As Alex Alioto continues: “In other words, there’s a regression to the mean, there’s no question about it, but that means have been raised.”
Also, according to the US Travel Association, travel spending in April of 2022 was above 2019 for the first time. And thirdly, the US travel Board shows that booking-windows across all verticals have gone down. “So this is happening, by the way, while spending is remaining the same or in some cases even increasing.” So what does this tell us? People have not stopped traveling. People have not stopped spending money on traveling. It’s just how they travel that has changed a little bit.
Accommodations Supply and Travel Industry Trends in North America
On average, across the NextPax platform, there has been approximately 8% growth in new properties measured, by specific property manager YoY in North America. The total number of new vacation rental properties added YoY grew by 6,3%.
Jim Barsch, President of NextPax Inc., explains that: “a year ago right now, there were almost no cruise ships out there. Airlines were flying, but were still pretty empty. Resorts were not really there. I was staying down in Mexico and the areas that had six resorts, all but one of them were closed. They’re all open now. So right now you’ve got a whole lot of opportunities that were not there last year. And if you look at some of the numbers just from an air traffic perspective, the last couple of days we have either been at or above 2019, basically measured by a number of people that go through the TSA. We just barely broke a couple of days above 2019.So that tells you people are getting out, they’re going more places. “
If we look just at the vacation rental industry, I’ve seen some numbers that people are running as much as 20% down in Occupancy the whole last year, and there’s a good reason for it, there’s more availability in the area as well as people choosing different destinations.”
Jim Barsch continues to explain that: “On average, we’ve seen an 8% growth in the number of properties, not too bad based on what numbers you look at and overall properties going into the vacation rental industry, that’s between six and 7% off. So not a lot of difference between what other customers are seeing and also what is out there in general. And you’re seeing a lot of different types of vacation rental inventory going in, some full time, some part time. A lot of people have never managed properties that are now trying to do it. But bottom line, there are a lot more options out there for travel than what there was before. And a lot more supply compared to the last couple of years.”
Diversify your OTA Channel Mix
Matthew Pauls, Senior Consultant at Atlas a TravelNet Solution, explains that the supply can’t be understated. “We’ve seen different markets that have added much more supply. Even Myrtle Beach, I read the other day, has added over 60% since the beginning of the pandemic. So now more than ever, is the right time to look at your channel mix and make sure that you have a healthy balance. Our most successful clients are aiming for 65% to 75% of direct bookings. Notice, I didn’t say 100%. They’re using that last quarter or so to fill in gap nights and to push prices.”
Do last minute bookings expand their audience? So now is the time to go ahead and take a look at your mix and also look at your channel mix.
Specifically, what are the OTA’s bringing you? Are you there for last minute guests? Are you looking to find a new, younger generation with some of the other channels? So take a look at your most profitable channels and double down on what’s working and maybe try something new if things aren’t working.
Next: learn about the strategies to fill those last minute bookings.
For more information, watch the webinar about summer travel trends and how to drive last minute bookings, organized by Travelnet Solutions, Whimstay and NextPax.
Also read our blog and download the report from HomeToGo to learn about more summer travel trends for 2022 and Insights per country destination.