Five trends that are shaping the hotel industry in 2023

By Niels Verspui

This year marked a turning point for the hotel sector. With many countries loosening COVID restrictions and pent-up demand at a fever pitch, the accommodation sector showed increased resilience in one of the most dynamic travel landscapes to date, with occupancy numbers outpacing even those of pre-pandemic levels. 

According to data from the annual ‘RoomRaccoon Report 2022, A Year of Impact: What’s Next?, which analysed booking data from more than thousands of independent properties in 54 countries around the world, hotels saw guests arrive in greater numbers with average occupancy measuring at 51% in 2022, in comparison to 47% in 2019. 

With the peak season in South Africa rapidly approaching, Niels Verspui, Market Head of RoomRaccoon South Africa, shares some key trends highlighted by RoomRaccoon’s report that are shaping the hotel industry to inform your business strategy in 2023 and beyond. 

Direct bookings are on the rise

Since the onset of the pandemic, direct bookings have been on an upward trajectory, increasing by a staggering 169% from 2019 to 2022. Guests found comfort in more flexible direct booking policies and having direct communication with hotels at such a turbulent time. 

The rise of direct bookings in 2022 reflects the continued desire of guests who want greater control over their accommodation bookings, combined with the increased investment among hotels in their direct sales channels. 

Hotels must consider strategies to inspire trust via their owned channels to capitalise on this momentum. This can be achieved with superior website design and a seamless booking experience via an integrated booking engine and online payment platform. Hoteliers should consider incentivising visitors further with compelling direct offers.

Travel peak season is extended 

It’s no secret that the coronavirus pandemic reshaped the way we travel. What were once predictable travel trends determined by historical data, have now become obsolete. Even seasonality has been turned on its head!

In South Africa, our data shows very little fluctuation between the traditional peak and low seasons. In fact, there was only a 12% difference in average occupancy throughout the year. The industry can expect these shifts in travel patterns to become more common in 2023 as international travellers look to escape the high cost of living in Europe and the US. 

To stay ahead of competitors, it is critical for hotels to analyse forward-looking data to determine pricing strategies. This can help to uncover revenue opportunities and capture demand before your competition. 

Domestic tourism is still going strong

Although international travel has made a strong recovery from its low point in 2020, the domestic travel boom that started during the pandemic is still going strong. 

Data from RoomRaccoon’s report indicates that domestic bookings account for 64% of bookings in 2022 and will continue to present significant business opportunities for hotels.

Hotels can focus digital marketing efforts on targeting potential guests in the area and create packages that appeal to a domestic audience, such as long-stay offers and weekend getaway deals. It is also important that hotels diversify their spread to include a mix of global and local OTAs. 

Memorable experiences outweigh rising inflation 

The urge to travel is stronger than ever. According to a recent report by Siteminder, 85% of travellers are comfortable spending additional money on extras during their next stay, despite rising inflation. 

At RoomRaccoon, our customers received some of the highest upsell performances in 2022 with room upgrades, breakfast, early check-in/late check-out and a bottle of champagne among the top-performing add-ons. These findings suggest that guests are ready to spend on memorable experiences outside and inside the property.

For hotels to increase revenue and upsell performance before the summer season, it is important to review and optimise product descriptions and images, and highlight upsell offers across your website, social media channels, booking engine and online check-in. 

Guests want high-tech, low touch

Keeping up with evolving guest expectations has been an ongoing challenge over the last two years. However, the core theme remains much the same; guests don’t want to feel like the processes to get what they want are disconnected or unintuitive. 

According to a recent study by Skift, nearly three-quarters (73%) of travellers want to use their mobile devices to manage their hotel experience, including checking in and out, paying, ordering food, and more.

To achieve this, innovation is key! With the right technology, hotels can leverage functionality like online check-in, mobile keys, hyper-personalisation, and secure payments to satisfy the modern guest and benefit from increased loyalty. 

Read the full report and discover key insights and opportunities to inform your hotel business strategy in 2023.

About RoomRaccoon

RoomRaccoon is an innovative all-in-one Hotel Management System that empowers independent hoteliers with powerful cloud technology to boost operations, maximise profitability and deliver a memorable guest experience. The system is intuitive and simple to use and offers outstanding support, should you need it. Based in Cape Town, RoomRaccoon is trusted by thousands of independent properties across the globe and was voted as the #1 hotel management system by hotel operators and industry experts in the 2020 and 2021 HotelTechAwards.  

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