Leisure travel is booming, whereas business travel is lagging! The vaccine rollout has made it possible for the global hospitality industry to get back on track where leisure travelers are flying in numbers and thereby allowing more countries to open for travel. The total domestic revenues for paid accommodations are forecasted to reach $213.5 billion in 2021, a 53.3% increase over 2020. However, the industry is unlikely to rebound to pre-pandemic revenue levels until 2023 due to the delay of business travel. Because of the advantages of remote working and cost-effectiveness, business travel which is a lucrative sector for hotels is unlikely to rebound anytime soon. In the meantime, Upscale properties benefit from the perception of being more sanitary, this fact has come from Mintel’s Luxury Travel Report 2021 where 45% of customers believe that luxury providers are inherently more sanitary.
Although the occupancy metrics – ADR and RevPAR have been at their highest since the pandemic started, they still lag behind pre-pandemic levels. All these factors relate to the delay in business travel. Business travelers are ready to travel again, however, they demand many modifications and flexible work areas with more technological capabilities.
SMART Strategies to Retain Business Travelers in Hotels:
1. Hybrid Events (for those who work in-person and remotely): It’s already in place where competitive hotels are optimizing this strategy to retain business travelers. Considering the flexibility of hybrid workers, they may even spend their PTO in hotels by extending their vacations where hotels can offer special offers to these guests. Moreover, these guests expect hotels to handle more remote workers & maximize the ability to accommodate both in-person and remote attendees which will ultimately increase the capacity of events.
2. Personal Space: Although business travelers are looking for a buffet in hotels, they also prefer room service options. Hotels can also reduce the use of business centers and focus more on in-room amenities with an emphasis on Technology, Productivity, Convenience, and Efficiency. For eg, hotels can reconfigure rooms for business travelers for staying and working by providing a Zoom-background friendly environment along with more technological advantages and a comfortable workspace.
3. Resort Passes: Remote workers have found the appeal of working in a vacation setting where hotels can offer creative solutions. Hotels can retrofit their properties to make some places work-friendly, and offer resort passes for accessing rooms during the day and amenities like the fitness center or pool.
4. Business Resorts: Some hotels are using resorts to attract business travelers, especially for large group functions. Using resorts as a conference venue can also draw more in-person attendance where a significant number of conference attendees are happy to attend through Zoom. It also requires unique incentives where resorts can be used as a good first step in this direction.
5. Workcation: According to a recent report by MINTEL, more than half of remote workers are willing to take a workcation, ie. longer stays for accommodations that can provide adequate means for them to work on vacation while providing unique and necessary personal space.
6. Guests controlling their cleanliness: Even though some guests concur that a hotel’s regular sanitation properties are important, some also agree that guests can make decisions about their room cleaning. This is because some guests may prefer the clean feeling that comes with daily housekeeping visits or some may feel uncomfortable not being able to control how often staff enters their room, etc. For eg, Hilton has already implemented this strategy where its non-luxury properties would be following an OPT-IN system, where guests tell the hotel if and when they’d like their rooms cleaned at no extra charge. This can benefits business travelers where most of them agree that they are more comfortable with non-daily room cleaning than leisure guests are. However, Black, Asian, and Hispanic guests are more in favor of regular cleanings. (MINTEL Report: Hotels & Hotel Alternatives – US – 2021).
As countries and hotels are opening up for travel and tourism, the hospitality industry has already gained a major advantage to retain guests and revenue. Especially, countries such as the UAE have gained a competitive advantage in the hotel industry where EXPO 2020 will act as a catalyst to boost its growth from October 2021. According to a recent forecast by STR, Dubai hotel occupancy is set to significantly rise by 77 percent year on year, with revenue per available room rising by an even stronger 86 percent. Therefore, events are major stimulants that can gradually retain business travelers, and the emergence of the sustainability agenda will have a major emphasis on diversified hotel amenities and from transportation to F&B.