In 2023, the travel and hospitality industry saw a surge in bookings and demand from travelers. However, with the current climate of fluctuating inflation rates and economic uncertainty, travel may look different in 2024. Experts Michael Taylor (senior managing director, travel intelligence) and Andrea Stokes (managing director, hospitality intelligence) share their predictions and forecast the trends that industry leaders should be closely monitoring in 2024 and beyond.
Hotels
In 2023, hotel chains saw increased consumer demand that fueled substantial enough growth to increase hiring and expand lines of business. In fact, last year saw the introduction of 10+ new brands across major hotel chains. If the economy remains stable with no major fluctuations, we may witness a sustained level of business without a decline in hotel demand. According to Stokes, one noteworthy trend to look out for is management companies engaging in mergers, acquisitions, or collaborations, ultimately presenting consumers with even more options to choose from for their upcoming travel plans.
Airlines
For 2024, Taylor anticipates a decline in the airline industry compared to the past two years. He also predicts increased scrutiny directed towards Boeing, prompting greater investment from their team in maintenance and engineering to address potential issues. Taylor notes that, although the JetBlue-Spirit merger was stopped, he foresees Spirit actively seeking another airline for a potential partnership. For his final airline prediction, Taylor posits that the Department of Transportation (DOT) will undertake attention-grabbing initiatives to stand out during the upcoming election, emphasizing its commitment to passengers (even in the face of significant weather-related challenges and delays).
Airline lounges
Airline lounges, once known for their exclusivity, are facing overcrowding, posing a challenge to the serene atmosphere they once provided. Passengers willing to pay extra to escape crowded airports now find themselves confronted with long lines as they wait for a lounge spot to become available. In the coming year, there is a growing need for innovative solutions to restore the exclusive club ambiance within these lounges. Recently, Delta attempted to address the issue by imposing restrictions but faced backlash for their approach. Taylor predicts that in 2024, creative solutions are going to be implemented to reduce airline lounge crowding.
Business Travel
Business travel may be back, but it still hasn’t reached pre-pandemic levels; Stokes predicts that the full recovery of business travel will require another year and that transient business travel is going to take even longer to recover (and may never be the same given the shift to remote work). Despite this, data indicates that employees believe business travel is crucial for the company's bottom line, playing a key role in maintaining client satisfaction and achieving organizational goals.
Group travel, conferences, and conventions made a significant comeback in 2023, which is great news for hotels that rely on this revenue. Stokes foresees a similar trend in 2024, with the potential for growth in conferences, meetings, and events continuing.
Rental Car
Taylor envisions two significant trends in 2024 within the rental car industry: First, some companies will explore the feasibility of self-delivery and self-return options for vehicles, which could enhance overall customer satisfaction. Second, rental car companies may reduce the number of EVs in their fleet (or phase them out entirely). In recent years, many rental car companies introduced electric vehicles (EVs) into their fleets. However, they were not prepared for the challenges that came with extreme weather, which prevented these vehicles from charging in many locations across the U.S. Overcoming these weather-related issues will require significant technological advancements and investments.
Key Takeaway
From demand fluctuations to evolving traveler expectations, 2024 promises to be a year of major shifts in the travel and hospitality industries. Having the right data to drive informed decisions will be key to navigating these changes and maintaining high levels of customer satisfaction.
Listen to the podcast episode to hear Mike and Andrea’s full thoughts and predictions!