It’s a good time to be an
independent property

Cloudbeds is an authority on independent lodging, a segment we’ve powered for over a decade. During this time, we’ve enjoyed a front-row seat to one of the most dynamic and accelerating industries in the world. Today, we’re paying that privilege forward. Welcome to our inaugural annual report, the State of Independent Lodging. 

We’ve aggregated and anonymized a wealth of data from across the globe to deliver key insights on independent lodging businesses, including data from property types and segments often overlooked. In these pages, you’ll find answers to pressing questions like the current state of recovery, booking behavior post-pandemic, and the travel trends most influencing consumer behavior. Our aim in publishing this research is to arm owners, operators, and the industry with clarity as they navigate the ever-changing travel landscape. This report not only sheds light on the state of the hospitality sector but will also give you a deeper understanding of the goals and challenges of independent owners and operators. 

Knowledge is power, and this is just the beginning.

Adam + Rich
Founders, Cloudbeds

Introduction

In 2023, the travel industry is poised to continue its path to recovery and even exceed pre-pandemic levels of performance in some areas. But with numerous headwinds threatening to temper the pace of growth, it won’t always be smooth sailing. 

“People around the world are feeling overwhelmingly more optimistic about traveling in 2023 compared to 2022,” reports Booking.com. “If 2022 was about the triumphant return of travel, 2023 will be about creatively reimagining it amidst the chaos.”
The hospitality market data tells us that more travelers are much more focused on unique experiences in 2023, rather than standard accommodations with typical amenities. But they aren’t looking for trip inspiration in the usual places, and they’re more value-oriented than usual due to uncertainty about the economy. Freed from the shackles of the office, business travelers are extending vacations to work remotely. And they’re happy to stay in a hotel, boutique, or short-term rental – as long as they don’t have to wait in line. 

Given the hotel market conditions, the power dynamics have shifted in recent years toward independent lodging businesses and will continue to do so. Without franchise agreements and rigid brand guidelines to conform to, independent properties are uniquely positioned to benefit from the confluence of macro and micro trends in the tourism industry and provide the distinctive, personalized experiences travelers are seeking. But whether you operate a full-service hotel, boutique, inn, guest house, or vacation rental, it will take foresight, agility, and ingenuity to adopt the hotel industry trends that make sense for your property and market so you can gain a competitive edge. 

With a soft recession on the horizon, discretionary spending on travel may shrink. Independent lodging businesses will have to battle it out for their share of a smaller piece of the pie with large hospitality companies with branded hotels that benefit from global brand awareness and massive hotel marketing power. And hoteliers and hosts of all types and sizes will face continued inflationary pressures and labor shortages. 

How will your property maintain the upper edge? It’s vital to pay close attention to the data and industry trends. In the first report of its kind, Cloudbeds has amassed a trove of data, surveys, trends, and insights cultivated exclusively for independent accommodations. 

At Cloudbeds, it’s our goal to provide the technology and the know-how independent lodging businesses need to compete with hotel brands for more reservations and happier guests. We believe that with the right technology, operating an independent property is not only easier, it’s the wiser choice. After all, amazing hospitality isn’t just the domain of the big brands. In fact, we think it’s best served by independent properties. And we’re here to help.

The Data

Traveler booking behavior and insights

What does the latest booking data tell us about the state of independent lodging? 
As a leading hospitality management technology provider for independent properties, Cloudbeds has a wealth of booking data from ten of thousands of properties. The data in this report draws from a sample of approximately 1,400 properties across 60 countries worldwide, selected to ensure statistically significant distribution across geographic regions and include various property types.

The results are divided into four key regions: North America, Latin America (including Mexico), Europe, and Asia Pacific (including Australia and New Zealand). Properties in the data set comprise hotels, hostels, bed & breakfasts, vacation rentals, motels, and alternative accommodations. As noted within the data, certain property types were excluded from select metrics to avoid skewing the results.

To understand how the pandemic affected booking patterns and what the recent data tell us about 2023 trends, we analyzed four years of data from 2019 through 2022. Here, we share highlights from the analysis of our selected market research.

ADR

Average daily rate (ADR) is the average price guests pay for hotel rooms per day. It is a key driver of hotel profitability. Here we report rate data from hostels separately from other property types (which include hotels, B&Bs, vacation rentals, etc.) as they are priced per bed rather than per guest room. 

Among independent properties, hotel rates actually increased slightly from 2019 to 2020 and continued to grow in 2021 and 2022, exceeding the 2019 ADR by 17%. In the hostel segment, ADR also showed steady growth, although at a more moderate level, with an 8% increase from 2019 to 2022. The timeline graphs below show that hostels are not as affected by seasonality as other property types.

It’s important to note that ADR data reported here has not been adjusted for inflation. According to STR, inflation was so strong in 2022 that, in real terms, ADR was relatively similar to 2019 results and even lower in some months.

Occupancy

Occupancy rate is a term used to indicate the percentage of occupied guest rooms compared to total available rooms in a specific time period. Aggregated occupancy rates are often an indicator of overall market demand. 

Among independent properties, global occupancy rates in 2021 and 2022 have improved steadily year over year since the pandemic, but have not yet reached 2019 levels. With China lifting travel restrictions and opening up again for outbound tourism in 2023, demand is likely to increase, especially for APAC countries where China comprises a significant portion of the inbound travel market.

Booking source

Booking sources are the distribution channels on which travelers choose to make reservations. Every booking channel comes with different costs to the property, so it’s a good idea to pay close attention to distribution allocations and costs and to strive to manage a diverse distribution strategy.

OTA sources include all bookings made through an intermediary in the graphs pictured here. Non-OTA sources (or “direct” bookings) include all bookings made directly with the lodging business, including the property website, phone, walk-in, and email.

Within our global dataset, in 2019, OTA-sourced bookings made up 57% of all reservations, while non-OTA bookings made up 43% of all reservations. During the pandemic, there was a significant shift toward direct bookings as low demand forced OTAs to curtail advertising budgets. With Covid restrictions limiting most international travel to regional and domestic markets during this time, direct channels such as walk-in and phone surged in 2020 and 2021. In 2022, pent-up demand for leisure travel has shifted the balance back in favor of OTAs, reaching 2019 levels again.

Additional Data

Download the full report to see data for the following travel booking behavior and insights:

Booking source by region

Breaking down booking source by region for 2022, we see significant differences across regions.

Booking window

The booking window is the average number of days travelers book trips in advance of the arrival date. Generally, the longer the booking window the better for the property. When lodging businesses have advanced notice of how busy they will be, they can more effectively manage pricing and operational planning.

Length of stay

Length of stay (LOS) is the average number of nights guests stay at a property. Generally, properties strive to attract guests for longer stays in order to boost occupancy and lower operating costs. However, long-stay guests often expect lower rates, which can drive down ADR.

Check-in / Check-out trends

Here we look at arrival and departure patterns. On what days do travelers check in and check out most often? By understanding these patterns, hotels can manage pricing and inventory controls to distribute bookings more evenly throughout the week and flatten out peaks and valleys in occupancy.

The Survey

Goals and challenges for independent properties

In October 2022, Cloudbeds surveyed customers using Cloudbeds Hospitality Platform and asked them to share their plans, challenges, and goals for 2023. The survey respondents comprised 600 independent properties across 80 countries.

The survey results support the takeaways from our booking data and other trend indicators we’ve observed in recent months. In 2022, independent lodging businesses took advantage of the boom in leisure demand to increase room rates and offset climbing costs. In 2023, the focus will shift to increasing occupancy and RevPAR. To further boost profitability, hotel owners and operators plan to reduce costs by generating more direct bookings and improving operational efficiency. At the same time, properties expect to face continued challenges, including higher labor costs and property maintenance.

As owners and operators of independent properties, our survey respondents understand they can’t do it alone. In 2023, more properties will invest in technology, apps, and tools to help create new revenue opportunities, streamline hotel operations, build better websites, manage campaigns, automate services, and improve customer engagement.

Download the full report to see survey results from 600 independent properties across 80 countries:

• Top 3 business goals for 2023 – Independent properties ranked their top business priorities for the coming year.
• What are your biggest challenges currently? – Independent properties rated the top challenges they are currently facing.
• Top 5 technology investments for independent properties – The most popular technologies that independent properties plan to add or upgrade in the next two years