Hospitality Industry Trends 2021 – Cloudbeds

By Alex Gaggioli, December 22, 2020

A Wildly Unpredictable Year.

2020 was unmistakably one of the most disruptive years in modern history. The way people live, work, and travel abruptly changed and will not fully recover for many years. 2020’s impact on hospitality trends will extend far beyond 2021 and a lot is set to change. Based on our day-to-day conversations with property owners, managers, and partners, we’re expecting 2021 to continue to look different, but we’re hopeful for a closer return to normalcy. Here are our hospitality industry trends for 2021. 

Travel Begins to Return to Normal in the Second Half of the Year

hospitality trends for 2021

Return to travel will be slow, but it will accelerate in the second half of 2021. While the pandemic continues to impact our industry and the world at large, we see hope on the horizon. With vaccines on their way, we’re expecting travel to return closer to normalcy in the second half of 2021. According to a report from McKinsey & Company, air travel demand back to 2019 levels will likely not take place until 2024, and hotel demand is not predicted to return to pre-COVID-19 levels until 2023.

All types of travel will not return at the same time. We predict that leisure travel will return first, and people will continue to travel in small groups – likely with people they’ve quarantined with. People are itching to get back on the road and in the air. While we have seen an increase in more local trips, we predict that by mid-2021, we’ll see a resurgence in long-distance travel.

As the world begins to open up and travel returns, hospitality businesses will continue to look different, as they continue to modify their operations to suit the new normal. Most of us have experienced constantly changing conditions and tech-based hotel trends are unlikely to change in the next year. Touch-less entry, hotel rooms as working spaces, minimal staff and guest interaction, and modified community spaces are just a few trends that are likely here to stay.

Resilient property owners and managers who are able to work around restrictions will continue to see bookings and welcome guests through their doors.

What Property Owners and Managers Can Do to Prepare:

Travel will continue to look different and updating your property’s standard operating procedures will make sure you’re ready to welcome back guests in full force.

One area we suggest tackling first is your housekeeping team’s procedures. Ensuring that all cleaning procedures are standardized is a key to success for all future travel. Cloudbeds’ Standard Operating Procedures guide offers many tips and templates that you can edit for your unique property. Download it here.

A second area we suggest tackling is your front desk’s standard operating procedures. Check-in, check-out, and day-to-day guest interactions will continue to look different over the next year. Take a fresh look at your standard operating procedures with help from our guide here.

Bonus: check out our eBook on housekeeping standard operating procedures including free templates.

Consumer Booking Habits Change

consumer booking - travel trends 2021

The way consumers want to book travel is changing, and so is the way money is exchanged. With so much uncertainty and poor experiences with booking channels at the beginning of the pandemic, guests are less willing to pay upfront. Travelers will pay for flexibility in an effort to protect their money. Plans could change at a moment’s notice, and people are not willing to put their money in jeopardy.

Online Travel Agencies burned a lot of consumers for canceled reservations, which we believe will push more direct bookings. Property owners will also be more cautious with their cash deposits, holding to spend the money long before a guest arrives.

Shorter booking windows will also carry over well into 2021. Consumers continue to make last-minute booking decisions – from months to days. Local attractions that offer outdoor activities like national parks and other adventures that offer social distancing by nature (pun intended) will continue to flourish.

In a recent CloudTalks, Asa from A-Lodge shared that when the pandemic hit, he exclusively used Airbnb because it attracted a guest who was accustomed to minimal staff interaction. Airbnb attracts a different type of guest and it could potentially work really well for your property.

What Property Owners and Managers Can Do to Prepare:

Evaluate your reservation policies, including cancelation windows, and fees. Take a deeper look at where and how your current guests are booking, and analyze how you can better serve them. Cancellation fees and short cancellation windows will deter guests who are nervous about their plans changing last minute. Also, take a look at how your third-party booking sources are handling your guests’ reservations. Work with OTAs that are offering more flexibility and reinsurance to your shared customers.

OTAs Focus on Their Core Competencies

hotel industry trends 2021

Online travel agencies and other booking channels had a tough year. The UN World Tourism Organization shows a full-year decline between 58-78% of international tourist arrivals. The severe and sudden decline of travel forced even some of the most prosperous companies to cut back and analyze their core competencies.

Airbnb, for example, laid off nearly 25% of their workforce and scaled back on operations that did not directly support their host business, including in transportation, hotels, and luxury residences. Expedia has become more focused on its core OTAs, which included decreasing marketing spend and personnel. This benefits both consumers and property owners because as competition decreased so did marketing costs. With less cannibalization, the OTAs are more focused on certain channels, which drives consumers to fewer websites.

How Property Owners and Managers Can Take Advantage:

Be flexible and test new channels and distribution partners. A well-equipped channel manager can give you the flexibility to test new channels without worrying about more work or overbookings. Check out our eBook on everything (and we mean everything) you need to know about what a channel manager is and how you should use it.

Airbnb’s IPO Changes Short Term Rentals for the Better

travel trends: airbnbs ipo

Airbnb went public on December 10, 2020, and we’re expecting it to change the short term rental market forever. As a public company, Airbnb will increase the standards of their listings which will have repercussions for just about everyone on the platform.

2020 highlighted the need for standard operating procedures. The hotel industry and traditional accommodations must follow endless laws and protocols to operate. And when it comes to a global pandemic, cleaning and safety procedures and standards become of the utmost importance.

As Airbnb solidifies its permanent place in the travel market, a new level of standardization will take place. Inadvertently, this will drive out the smaller players because of the barrier to entry increases. Property management companies and multi-unit hosts will continue to operate with updated procedures and standards. As the standard rises, consumers will benefit and Airbnb will earn their trust.

How Property Owners and Managers Can Take Advantage:

Airbnb has always been laser-focused on their brand. Whereas Booking.com and Expedia spend significant dollars on paid advertising on Google, Airbnb has been able to build a brand that gets 91% direct traffic. 2021 is a good time to look at a hotel’s own brand. Why is the property unique? Are you showing the benefits to your travelers in everything from images to messaging?

Evolving Traveler Demographics and Partnerships

hospitality trends for 2021

Over the course of the year, we’ve talked to thousands of property owners, hoteliers, and managers. One of the most prevalent themes in 2020 turned out to be a change in who was staying with them. International enthusiasts explored nearby treasures, shared rooms, and accommodations transformed into private ones, and people found community in businesses they once looked at as competitors.

Tried and true strategies to attract guests may not be effective, and it forced many people in the hotel industry to get creative. For example, Knik River Lodge in Alaska, which typically attracts as guests non-Alaskan residents, partnered with local radio stations and competitors to create an Alaskan road trip for Alaskans. People in Anchorage were anxious to get away, and a remote cabin village was just an hour away. A win-win.

Or another example, Jesse Keefer owner and operator of Bodega Ridge and Cove who had to completely change his event-centric business. After weddings canceled and their calendar was completely wiped out, they decided to turn their catering kitchen into a restaurant and focus on social media to attract guests who were looking to getaway.

In 2021, hospitality and travel trends will require lodging businesses to remain creative and resilient in the face of ongoing challenges. Properties that can attract guests beyond their target markets and create new experiences will see the best results even as travel returns to normal.

What Property Owners and Managers Can Do to Prepare:

Like most hoteliers and hosts, you’ve probably made significant changes to your distribution strategy already. While air and long-distance travel remain stagnant, domestic travelers are ready to get back on the road. Consider partnering with local businesses or advertising via local channels like radio stations, newspapers, and associations to attract are closer-to-home clientele.

It Could All Change

If there’s one thing we do know, it’s that we don’t know what’s coming next. Different from the start of last year, we can learn to expect the unexpected. The number one hospitality trend for 2021 we know for certain is to take it day by day, week by week, month by month. As the pandemic eases its hold on travel and the world, hospitality professionals will see the dawn of an entirely new era – of travelers excited and willing to travel, and new experiences for properties new and old.

 

Hospitality trends and technology

Cloudbeds provides independent properties and hotel chains with one platform to manage guests, staff, inventory, pricing, and data. Learn more about our product in 2021 and hotel technology trends or meet your local market manager by booking a call here.  

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