State of Travel in Summer 2016
This week, we took a step back from the day-to-day problems of hotel marketing campaigns, which tech providers to partner with, and what revenue management strategies are most profitable to look at the big picture: the travel industry as a whole.
Knowing what’s down the road (or what everyone thinks is down the road, which is at least 50% of what matters when you’re talking economics) is what will give you the data you need to make long term plans for your hotel.
Are you planning a major refurbishment next year? Putting in a pool? Raising rates for your loyalty club members? To make those plans with confidence, you need to look at the market as a whole.
Here are 4 articles to help you peek around the next bend in the road, organized by what’s happening now to predictions as far forward as 2020.
Cornell Analysis Predicts Likely Boost for Hotel Profits
Although the U.S. recovery from the Great Recession has been slow and uneven, unemployment has gradually dropped, and both inflation and labor costs will likely start increasing. An analysis by Cornell Professor Jack Corgel shows that hotels should be able to maintain or increase profits in this environment, because of their ability to increase room rates to match or outpace expenses. Corgel’s report, “Hotel Profit Implications from Rising Wages and Inflation in the U.S.,” is available at no charge from the Cornell Center for Hospitality Research (CHR) and is published in conjunction with the Cornell Center for Real Estate and Finance.
Sustained Growth in European Tourism Towards the Summer Peak Season
European tourism is proving resilient to challenging times. A vast majority of destinations saw a bumper increase in arrivals in the first five months of the year, with 1 in 2 recording double-digit growth.
According to the latest European Travel Commission, “European Tourism 2016 is up. This positive momentum is mainly driven by improving economic conditions, the unrelenting efforts of destinations to increase the number of off-season visitors, and the continued interest for European tourism products from large intraregional and overseas markets.”
2017 Global Travel Price Outlook Identifies Key Risks for Global Market
Travel Prices Set to Marginally Increase or Remain Flat for 2017; Geopolitical and Economic Uncertainty Mean Travel Managers Need to Remain Flexible and Agile
New research out today highlights six key risks heading into 2017 that could impact both travel industry prices and the global economy as a whole. They are emerging market performance, financial market turbulence, geopolitical risks, uncertainty surrounding Brexit, potentially fluctuating U.S. interest rates and oil prices.
Tourism Expected to Grow by 4% by 2020, Despite Adverse External Shockwaves
Market Research Company Euromonitor International released today its latest travel research, providing the latest insights on the industry performance. According to Euromonitor’s new research, global travel and tourism sales grew consistently despite high external shockwaves. Geopolitical tensions, whether terrorism or political concerns, have impacted the traditional sun and sea destinations in locations such as the Mediterranean Sea, with safer destinations winning out.
“The substitution effect, where tour operators shift capacity away from troubled hotspots to more stable countries, is visible” says Caroline Bremner, Head of Travel Research at Euromonitor International.
Words by Tayor Smariga