2023 hotel & airline insights
After almost three years, hotels and airlines finally see the light beyond the pandemic. Travel is more important now than ever for consumers who are eager to make up for lost time. Despite economic uncertainties, travel will be a priority for 2023 in order to reconnect with family and friends, have new experiences, and invest in mental health.
Hotel’s are booked and busy
The hotel industry is on a path of recovery this year. Recovering leisure and business travel has enabled hoteliers to boost room rates. Hospitality analytics firms STR and Tourism Economics project the average U.S. daily room rate to be $151 in 2023, reaching $96 revenue per available room, up 11.6% from 2019. These projections reflect the U.S. hotel industry’s continued resilience.
A bright spot for hotels is the return of business travel. Business trips - and profits from higher paying corporate clients- are bouncing back even beyond pre-pandemic levels, per a recent survey from Morgan Stanley Research.
When it comes to business travel, hotel lodging is preferred. According to Deloitte insights, only one in 10 companies changed their policies related to nontraditional lodging during the pandemic, and those that made changes were no more likely to embrace non-hotel lodging.
About half of companies still do not reimburse for non-hotel lodging at all. Only 9% offer alternative lodging in their corporate booking tools.
Travel is in the air
Despite some turbulence, air travel is back. Airlines are running on a full schedule with 25,000 flights operating daily in the U.S., and 2.3 million passengers flying to hundreds of cities and countries. Strong demand is giving the travel revival staying power and allowing airlines to raise fares, improving their financial results.
The International Air Transport Association projects that in 2023 the global airline industry will return to profitability for the first time since 2019, capping its financial recovery from the pandemic. American Airlines, JetBlue, and Alaska air anticipate better full-year earnings than previously expected. Southwest Airlines, citing the return in travel demand, said it will reinstate its quarterly dividend that was suspended at the start of the pandemic in 2020, becoming the first U.S. carrier to do so.
According to Expedia Group, over half (51%) of consumers are planning on air travel in the next 12 months, making flights the most popular mode of travel transportation behind cars. Younger generations are even more likely to fly, with almost 60% of Gen Z and millennials planning to travel by air in 2023. Long-haul flights will see a major increase this year as international travel is in demand with Europe, Asia, Mexico, The Caribbean, and Central America among the top international searches.
The consumer journey
The booking journey begins and ends online. Even after completing a booking, many travelers continue to research and find inspiration.
• 95% keep visiting travel-related sites after booking
• 74% re-research a trip after booking
• 8% cancel and rebook their trip after completing a booking
Advertising returns
With pandemic restrictions fading and booking increasing, airlines and hotels are boosting their marketing. Recently, U.S. carrier United Airlines launched its first national ad campaign in nearly a decade, and in October 2022, Japan Airlines began a global omnichannel promotion to mark the end of border restrictions.
The bounceback will be reflected in the industry’s digital ad spending, eMarketer expects ad spend to jump 20% in 2023 from $5.23 billion this year and cross $7 billion in 2024.
Key takeaway
In 2019, the travel industry in the U.S. spent $6.09 billion on digital advertising. Due to the outbreak of the coronavirus pandemic, the sector's digital ad spend in 2020 decreased by 51%. Travel advertisers were the first to pull campaigns and pause ad spend.
Now is the time to take advantage of decreased competition for inventory and use it as an opportunity to gain market share and build brand loyalty. Travel by Causal IQ combines the power of programmatic technology with the intelligence of experienced travel marketing experts to give your brand an edge over the competition. We offer brands the ability to learn from interactions with individuals across channels, promoting brand loyalty. Our intent-based targeting technology follows travelers from the first point of interaction, through to booking.