As Travelers Splurge, Can Hospitality Handle the Surge?

About a 3 min. read

John Conti
VP, Travel

With an unprecedented resurgence in travel after a difficult year, the hospitality industry is excited to welcome visitors back. But, are they ready and able to deliver the experience that will match heightened expectations among travelers? As the hospitality industry pivots back to “normal” below are five factors testing hospitality at this critical moment:

  • Travel behavior and demand is increasing due to the overall need to return to pre-pandemic behavior. This type of resurgence is affecting not only occupancy levels but travel as well:
    • STR (Smith Travel Research) indicates that weekly U.S. hotel occupancy hit its highest level in the past 85 weeks.
    • TSA reports that the overall throughput at US airports has reached 2M per day several times in the past few weeks, hitting that level for the first time since March 2020.
    • Destination Analysts reports that over 77% of Americans plan to travel for leisure in the next 3 months—averaging 1.9 trips in this timeframe.
  • Travel prices are increasing due to overall inflation, fuel prices and tight supply concerns. The most extreme example of this is the rental car market, where companies retired up to 50% of their fleet due to low demand during the pandemic. But declines in car production mean that they now cannot ramp up their supply to meet the demand. The outcome has been daily rates in some markets that are double (or more) what a traveler paid in 2019, if there is even a vehicle available.
  • State and local rules and restrictions continue to evolve, and the CDC has mostly shifted to a set of guiding principles leaving it up to each locale and business to balance how to manage capacity, social distancing, and vaccine requirements against polarized customer attitudes. One example, masks are required regardless of vaccination on all public transportation through September, but many indoor locations, such as retail and restaurants have lifted mask mandates.
  • Businesses continue to have staffing challenges. Those that were squeezed out of hospitality industry jobs via layoffs and furloughs have been slow to come back. The Bureau of Labor Statistics reported two million fewer hospitality employees in the US in April compared to two years ago, with 1.7M job openings. Many have left the industry entirely, requiring businesses to perform extra training and shadowing for new hires, which further impacts productivity and customer experience.
  • Many consumers will want a great experience for their first trip in the past 15 months. Destination Analysts reports that four in ten want to take a longer, more involved trip this summer and one in ten wants to take a ‘bucket list’ trip. Our guess is navigating Waimea Canyon State Park’s switchbacks in a U-Haul was not envisioned when originally planning that Hawaiian bucket list adventure.

The confluence of consumer pent up demand for an excellent travel experience with the headwind businesses face in delivering that experience will likely lead to disappointment for some. Companies measuring customer experience also facing tough ratings comparisons in 2021 due to lower volume last year, boosting last year’s scores to very high levels.

It’s critical for companies to stay focused on what is and is not working, through identification and key driver measurement. CMB can help by executing prescriptive customized research, such as:

  • Update driver analysis to measure the shift in what makes an excellent experience
  • Uncover whether ratings trends have been influenced by different (higher) expectations in 2021
  • Add question detail to measure the impact of newly hired staff, understaffing or other operational changes
  • View results through a non-traditional lens, including segments that may not have mattered previously, such as region of country, political beliefs, or even where the consumer gets their news
  • Measure word-of-mouth sentiment in social media to complement existing tracking programs

Teasing out systemic issues in customer experience from transient impacts of the pandemic will be paramount to prioritize investment and deliver the best traveler experience. Contact us today to learn how we can help you handle the surge, and make critical decisions for your customers to enhance their experience.