USA Summer Travel 2022 |  McKinsey

USA Summer Travel 2022 | McKinsey

Most likely, summer 2022 to be good for travel and tourism in the US. These five key trends shape the industry and impact hoteliers.

Leisure travel is booming

Revenue per available room (RevPAR) in the US is not only exceeding 2020 and 2021 levels, but increasingly 2019 levels as well. RevPAR outperformance is largely driven by rates. Hotels are not as full as in 2019, but prices have increased, with the average daily rate (ADR) now around 15 percent more expensive than in 2019.

Basically, people love to travel. We asked over 1,000 travelers in the US what they would do if they won the lottery, and spending on travel ranked as the second highest choice (Figure 1).

While the immediate future of travel beyond this summer is still uncertain, we are certain of one enduring truth: Everyone loves to travel.
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This summer, vacations will take place for many “no matter what”

The survey also found that people are worried about macroeconomic factors such as inflation, but not enough to deter almost 70% of travelers from taking a vacation this summer (Figure 2).

Three words describe traveling this summer: whatever.
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Gas prices are high? People will go somewhere closer. Hotel prices are excessive? They will seek an agreement. Consumers may find ways to cut back on spending, but these factors will not derail their holiday plans (Figure 3).

Inflation may keep some travelers closer to home, although it is not expected to significantly disrupt vacation plans.
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Since the survey was conducted in June 2022, travel plans have been set in motion. AAA estimated that 42 million people will travel by car over the July 4th weekend, a new record for car trips for the period, despite the national average gas prices above the $5 mark.

In addition, hotel occupancy, ADR and RevPAR rates exceeded the comparable week in 2019, and TSA checkpoint trips on the Thursday and Friday before the July 4th weekend were up 15 percent compared to 2019.

Guests have more accommodation options than ever before


Travel insights and trends with McKinsey

The lines between accommodation categories are blurring, with travelers looking for hotels, home-shares, all-inclusives and outdoor/glamping options.

While 78 percent of surveyed travelers say they are comfortable staying in a hotel, only 61 percent feel comfortable staying in alternative accommodations. The top five reasons to stay in a hotel are consistency and predictability; security and privacy; convenient location; availability of concierge, lounge, restaurant and/or other amenities; and lower costs. In comparison, travelers may choose alternative accommodation options as they offer more space; household amenities; and authentic or local experiences.

So where do these travelers plan to go? More than half (54%) plan to go to the beach, a popular choice among 25- to 34-year-olds. The next most likely destination (32%) is a city/town, followed by a mountain/hiking trip (24%).

Loyalty heats up

In this environment of higher prices and wider choice, efforts to maintain customer loyalty are intensified. But the survey shows that many travelers, especially the younger generation, don’t think they’re getting enough value from loyalty programs or find the programs too complicated.

Some features of loyalty programs are more important than others: offering discounts, having a convenient place for guests to stay where they want, and making it easy to redeem points are favorites.

ESG is becoming increasingly important

Although 75 percent of travelers surveyed agree that sustainability is important, only half would pay extra for it. But younger travelers are much more willing to pay extra for green initiatives. Such initiatives, which currently resonate best with guests, are the use of environmentally friendly cleaning products; replacement of plastic key cards with alternatives; reduced use of paper such as electronic receipts; and smart devices and monitoring systems to optimize energy consumption.

Five ways hotels could respond to these trends

  1. Promote a “crowded” stay by highlighting local attractions and events. As leisure and business travel recover, we expect an increase in grief-related travel.
  2. Help guests find you when they’re researching their next trip. Hotels can invest in their online and social media presence to connect with potential guests early in their research. This is especially important as hotels face labor shortages and sometimes reduced service levels: communicate transparently to ensure guest expectations are set appropriately before guests enter the property.
  3. In markets with a large supply of alternative accommodation, look to the differentiators. Hotels can communicate what makes them better, especially convenience, consistency and available amenities.
  4. Upgrade loyalty programs. Hotels may need to review their loyalty programs to ensure they meet new needs and help both frequent and infrequent guests get the most out of their programs.
  5. Start green initiatives with clear and consistent guest communications. Hotels can think about how to attract green travelers and build meaningful relationships with them that will lead to long-term loyalty.

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