The following is a thought leadership post from Dan Spiegel, SVP & Managing Director — Coldwell Banker Commercial
Worldwide, the hotel and resort industry peaked at $1.52 trillion in 2019. Following the travel restrictions during the pandemic, the industry is still in recovery mode. Unsurprisingly, the market decreased significantly in 2020 and 2021 – dropping below $1 trillion.
This year, however, hospitality is on the up and up with a market size forecasted to reach $1.21 trillion and the U.S. Travel Foundation is expecting an increase in travel spending for the year compared to 2022. Pent-up demand, decreasing COVID cases, and emerging travel trends are driving much of the activity, renewing investor interest in the sector.
Post-Pandemic, Vacation is the Priority
Vacationers are showing no signs of financial worry, as travel rates are undeterred by the current economic volatility. Research from McKinsey shows that while people are concerned about macroeconomic shifts, it is not enough to stop most from taking their vacation this summer.
In 2022, air traffic hit about 70% of pre-pandemic levels globally, reports Forbes, and for last summer, global hotel occupancy reached an increase of around 5% over the summer of 2019. The U.S. Travel Foundation is forecasting an increase in travel spending for 2023 compared to 2022.
The ongoing strength of the U.S. dollar is also fueling travel, making global destinations more attractive to travelers looking to capitalize on the favorable exchange rate.
Spring break and the 4th of July weekend are expected to be some of the biggest travel periods for the year. USA Today reports that “for the first time since 2019, Americans are also considering traveling internationally for spring break. Last year, TSA checkpoint travel numbers showed a 15% increase for the Thursday and Friday before the Fourth, and this summer, hoteliers are anticipating an even stronger holiday weekend.
Hotels and Resorts Finding Their Footing
In a recent survey, 78% of travelers indicated they are comfortable staying in a hotel, while 61% said they were comfortable staying in alternative accommodation.
Hidden fees, safety concerns, and oversaturation have many travelers turning away from short-term vacation rentals like Airbnb and opting instead to book with a hotel or resort.
Homeowners looking to rent out their homes during Super Bowl LXII in Arizona, for example, were expecting to be flooded with bookings. Instead, The New York Times reported, these rentals sat at 50% occupancy despite two of the world’s largest sporting events descending on the area on the same weekend.
Although demand for hotels may be ticking up, overall construction is slowing due to costs and financing challenges. Per The Wall Street Journal: “There were roughly 612,000 hotel rooms in the active development pipeline at the end of last year, down 2.6% from the year before and 6.1% lower than in 2019” Additionally, about 15.6% fewer rooms were in the planning phase at the end of 2022 compared with a year prior.
Hotel conversions, however, are growing in popularity among big brands like Hilton looking to expand amidst the contracting construction pipeline.
New Trends in Travel
Several emerging travel trends, such as hush trips, are factors contributing to hospitality’s resurgence.
Due to the pandemic, the number of people working from home tripled. This shift toward remote work led to the emergence of a movement called digital nomadism, which is defined as “remote workers who travel to different locations on a regular basis. They use modern technology to work from anywhere in the world.” Hotels and resorts that offer reliable Wi-Fi and have work spaces is key to attracting these nomads or those on “hush trips.”
Outdoorsy vacations are also coming to the forefront for many travelers seeking new adventures and the desire to connect with nature. According to Bisnow, “hospitality offerings that focus on the outdoors appear to be an area of growing interest for investors.”
The younger generation of vacationers are also the most willing to pay more. McKinsey reports that younger travelers are far more willing to pay extra for green initiatives than older respondents, and an Expedia study found that 80% of their survey respondents between 18 and 34 were willing to pay more to upgrade their experience.
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The Metro Boston Group Expands Reach Into Greater Boston Neighborhoods and South Shore Markets
BOSTON (May 17, 2023) – The Metro Boston Group, a leading real estate firm, is proud to announce the expansion of its commercial sales services into the Greater Boston neighborhoods and South Shore markets. This expansion comes in response to recent successes and client demand for a greater presence in these areas. To lead this expansion, Karim Evans has been appointed as commercial sales advisor. With his wealth of experience in investment acquisition, sales, leasing and asset management, Evans is well-suited to support local businesses and help The Metro Boston Group target the highest and best-use potential of its clients. “Our efforts are dedicated to assisting small to mid-size clients who are often overlooked by larger national and regional real estate companies. Traditionally, these are non-institutional owners, investors, family-owned trusts with generational assets, and developers who are searching for the full level of service they deserve,” said Albert Bouchie, broker advisor of The Metro Boston Group at Coldwell Banker Commercial. “Karim's skills and commitment to building thriving local economies align perfectly with our goal of serving Main Street-Down the Street commercial property owners and investors and helping them reach their full potential.”Evans will be responsible for expanding The Metro Boston Group’s brand awareness by leveraging his extensive market knowledge and client base. He is committed to generating long-term capital appreciation for his clients’ investment portfolios and is always available to answer any questions about the commercial real estate market."We are excited to have Karim on board as our commercial sales advisor,” said Bouchie. “His personal interest in supporting local businesses and dedication to customer service make him a valuable asset to our team.” For more information about The Metro Boston Group's commercial sales services, please contact Karim Evans at (857) 763-7771 or firstname.lastname@example.org. For more information about The Metro Boston Group, please visit www.cbcboston.com.About Coldwell Banker Commercial AffiliatesColdwell Banker Commercial Realty, an affiliate of Coldwell Banker Commercial®, provides commercial real estate solutions serving the needs of owners and occupiers in the leasing, acquisition and disposition of all property types. With a collaborative network of independently owned and operated affiliates, the Coldwell Banker Commercial organization comprises almost 200 companies and more than 3,000 professionals throughout the U.S. and internationally. For additional information, visit www.cbcworldwide.com. ###
Perfecting Your Presentation Through Storytelling & Structure
On this episode, we're joined by Deborah Shames, Communication and Presentation Trainer, Keynote Speaker, Author, and CEO of Eloqui. Deborah uses her experience directing over sixty award-winning films to make her business clients more genuine, effective, and successful. It doesn’t matter whether they are delivering a keynote address, speaking to a Board of Directors, or pitching for new business. She co-wrote 3 books on communication and public speaking, including the business best-seller "Own the Room." And because Deborah ran a successful film company in Sausalito, CA for fourteen years, she knows how difficult it is for women to stand out and succeed. Her latest book she wrote is "Out Front: How Women Can Become Engaging, Memorable and Fearless Speakers."
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