The top 10 hotel industry trends for 2022 and 2023

Hotels around the world in 2022 have been once again welcoming visitors as tourism slowly but steadily resumed. Despite the spread of Omicron putting a dampener on tourism in some destinations during the first half of the year, the outlook for the remainder of 2022 and 2023 is looking bright, which means now is the best time to jump into a hotel management career. Trends in technology, diversity, sustainability and wellness tourism that have shaped the hotel industry this year are expected to continue to play a significant role next year.

The top 10 hotel industry trends of 2022 and 2023

1. Market recovery post-COVID in 2023

Hoteliers can expect a significant recovery in demand and room revenue across the lodging sector in 2023 according to forecasts by CBRE. Pricing is also expected to rise in line with inflation and increased demand, leading to further revenue increases. This matches data from Deloitte’s 2022 ‘European Hotel Industry Survey’, which anticipates that at least half of accommodation operators in Europe can expect to be once again at 2019 performance levels by 2023. Market data on the post-COVID recovery of the Australian hotel industry from consulting firm Horwath HTL also indicates ongoing growth in 2023 and beyond. That’s all great news for hotels and accommodation operators.

2. Hotel direct bookings competing with OTAs

Dissatisfaction among consumers and hotel clients with the services offered by Online Travel Agencies (OTAs) during the pandemic led to renewed growth in hotel direct bookings in 2022. By 2023 hotel direct bookings are expected to surpass bookings via OTAs for the first time in recent years, representing a meaningful shift in booking trends.

For many hotel businesses now recovering after the pandemic, increasing revenue through direct bookings remains an important goal over the next year. To that end, many hotel brands have invested money in:

• Developing their own branded apps and direct booking platforms
• Advertising direct booking campaigns
• Encouraging direct booking via loyalty programs, deals and membership offerings

3. Environmental sustainability as opportunity

Ongoing research into consumer trends among hotel guests show climate change and environmental sustainability continuing to shape consumer choices in 2022 and 2023. Hotels in 2022 see the value adding opportunity of sustainable practices as a guiding principle for new business innovations such as:

• Adopting a consumer-driven ‘essentialist’ design trend. This means scaling back wasteful extras, single use packaging, slippers or unnecessary room items or furniture
• Adoption of net zero targets
• Marketing simplicity, natural destinations and experiential travel to an eco-conscious audience
• Serving local, organic and vegetarian or vegan food and beverage.
• Generating greater business from local tourism for low-carbon staycations
• Increased efficiency and lower costs resulting from sustainable resource management

In addition to environmental awareness, data shows that travellers and millennial tourists in particular are increasingly looking for experiences in nature coupled with sustainable lodgings. Hotel brands with properties in proximity to natural destinations are capitalising on this trend, combining sustainable operations with experience packages such as hiking with local guides.

4. Wellness tourism on the rise

The wellness tourism industry is booming right now, with post-pandemic health conscious consumers increasingly wanting to combine wellness activities with their holidays. According to the ‘Wellness Tourism Market: Global Industry Trends Forecast 2022-2027’, the market is expected to reach a value of US$1,250.27 billion by 2027, exhibiting a CAGR of 7.23% during 2021-2027.

Hotels have been responding to this booming demand in 2022, with many brands including Marriott and Hilton investing in:

• New facilities and amenities
• Health services, treatment products and packages
• Custom designed wellness resorts.

5. Catering for digital working nomads

With a massive uptake of digital meeting platforms during the pandemic, corporate travel for meetings is on the decline and business travel has changed, probably forever. Instead of the corporate traveller jetting around to meetings, the rapid rise of remote workers has created a new form of corporate traveller: the digital working nomad.

Hotels and accommodation operators in 2022 began overhauling their corporate amenities, expanding Wi-Fi, building informal coworking spaces, and offering long term ‘workation’ packages to cater to this new kind of business guest. With hybrid work now becoming the new normal, this trend is set to continue into 2023 and beyond.

6. Personalised guest experiences

Millennials as a tourism consumer group are more focused on experiential and authentic travel experiences, rather than the uniform experiences of luxury desired by the previous generation. This change in consumer expectation has been further fuelled by the rise of Airbnb and the boutique hotel sector which compete with hotels through their unique offerings.

Guests in 2022 and 2023 increasingly prefer unique accommodations offering unforgettable, highly localised and personal experiences. Hotels have been responding to this changing consumer demand, putting in place innovations to personalise their guest experiences including:

• Branded and personalised hotel apps, tracking preferences data and stay histories
• Curated selections of local activities offered to guests depending on their interests
• Personal telephone and communication services where all requests and preferences are tracked
• Unique rooms, architecturally designed spaces and artist designed or themed suites
• Personal notes and gifts
• Guest selection of preferences such as room features, lighting, food and beverages

7. Staff shortages

Enduring staff shortages across the hotel industry worldwide in 2022 call for innovative responses among operators. The shortage brings into focus the need to address worker burnout, mental health, flexibility, improved pay and conditions, and work life balance for staff. Increased investment in training and retention will have a role to play in correcting this imbalance in 2023. This is where innovations such as our Virtual Reality (VR) and Extended Reality (XR) experiences become important players to help support the upskilling of the next generation of hoteliers.

8. Diversified hotel businesses

The past few years has taught hotel operators to be innovative and flexible to continue bringing in revenue during periods of crisis. This has led to creative forms of business diversification, with hotel brands expanding beyond accommodation into areas, such as:

• Leasing out temporary meeting and coworking spaces
• Expanding into residential, real estate and property development
• Opening up gym and wellness facilities for public usage
• Partnering with services and local businesses to offer experience packages
• Blending retail and hospitality in branded hotels
• Introducing corporate and digital nomad subscription models

Although international travel has resumed in 2022 in a big way, diversification is a trend that’s here to stay. Accor, for example, is leading the way in expanding into branded lifestyle residential developments with 35 existing branded residential properties in their portfolio and another 90 in the pipeline for 2023.

9. More technology but still not enough technology for some

The past two years has seen an unprecedented adoption of new technologies by the hotel industry with investment going into a smorgasbord of digital adoptions including AI concierges, smart rooms, contactless self-check in and branded mobile apps.

However, there is currently a gap in digital investment in the hotel industry that seems likely to endure into 2023. Major investors in new technologies tend to be large international brands, while many smaller operators with smaller budgets are left behind, making them dependent on OTAs for their booking systems.

10. Diversity and inclusion is a growing priority

The hotel industry has a diverse workforce, but when it comes to management positions the industry in 2022 is still lagging in terms of equal representation of women and other minorities. One survey shows just 7% of CEO positions of the top global 100 hotels are held by visible BIPOC minorities.

Some progress has been made with some hotel brands setting diversity management targets during 2020-2022.

According to the Castell Project’s “2022 Women in Hospitality Industry Leadership” report women are gaining representation in hotel company leadership roles, holding one leadership spot for every 10.3 men in 2022, which is an improvement from one to 11.2 in 2019. Hotels need to keep on top of their leadership targets to improve this statistic over the next few years.

In addition, hotels in 2022 show a growing awareness of LGBTQI inclusivity as a priority among guests and consumers. Some operators have been investing in more inclusive spaces, inclusivity training for staff, neutral pronouns in language and other practices in order to be able to brand themselves as LGBTQI friendly.

Diversity is more just than an industry trend in 2022, it represents a broader cultural shift that hotels are beginning to recognise they need to take seriously as millennials become the biggest consumer group. For example, women are behind 56% of travel bookings worldwide. As a consumer bloc their choices are influenced by the perception of inequality within hotel brands.

Considering a hotel management career? Find out more about hotel management courses on offer at the Blue Mountains International Hotel Management School, part of Torrens University Australia.