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Consumer behavior and pricing

13 September 2022
Travel and tourism have been transformed by the pandemic, according to Simon, Kucher & Partners' Travel Trends Study 2022. Hotels can grow their revenue and profitability by understanding how the pandemic changed consumer behavior in travel and tourism. For example, the overall impression from 4 825 respondents from seven countries is that they all expect a price increase for transportation and accommodation. So how can hotels use this information to set reasonable hotel rates?

Willingness to pay

According to the survey, people expect to pay 25 % more for accommodation this summer than last year. The ADR in the US is up between 15 % and 20 % compared to 2019. However, occupancy is still lower than before the pandemic, but the higher rate compensates for lower occupancy, so RevPAR is higher. The actuals are in line with what the respondents in the survey said.

Consumer behavior is different depending on which country the consumer lives in. Therefore, hotels need to keep track of where the consumer comes from to use the findings in the survey. Without high-quality data in the hotel PMS, the hotel will have no clue how to apply consumer behavior knowledge.
By using the data from the hotel PMS, hotels should be able to define segments based on the reason for travel, feeder market, distribution channel, and other variables. By narrowing down the total market to specific market segments, the chances of acquiring the guest increase since the hotel can easily target potential customers.

A shift in the segment mix

The number of business trips will continue to increase in the next 12 months compared to the previous 12 months. The increase will be significant since it is from a low level. Business travel is far from pre-pandemic levels, and it will take some time to recover, if ever. Google announced a few days ago, "Managers should not approve any social functions, full-team offsite, and employee travel to in-person events with a virtual option." Companies will save on the cost of travel and avoid travel because of climate change which will decrease demand for hotel accommodation. The shift from business travel to leisure travel will continue.


32 percent of the surveyed people, especially the younger generation, are willing to pay more for an environmentally sustainable holiday. Therefore, investments in becoming more sustainable will reach a higher return on investment when hotels can increase rates.
Hospitality industry business intelligence shows that the overall travel trends are favorable for the industry, and people are excited to travel again. However, hotels should be aware that they are watching their money closely and spending wisely. Hence, hotels must balance good deals and value and carefully analyze their data before increasing rates too fast.