Leisure travelers are seeking more experiences, while business travel remains strong, hotel industry leaders shared in a panel discussion about demand trends Wednesday.
Jay Caiafa, COO of the Americas for IHG Hotels & Resorts, Leslie Hale, president and CEO of RLJ Lodging Trust, and John Murray, president and CEO of Sonesta International Hotels Corp., spoke at The Hospitality Show, a conference event hosted by AHLA and Hotel Management. There were approximately 3,500 industry professionals registered for the inaugural conference at the Venetian in Las Vegas.
While leisure demand remains robust, the executives said, these guests’ wants have shifted. They now crave more experience-based travel and are looking to get more for their money. Hoteliers should be wary about what their property or surrounding location can provide, the executives added.
In a later panel discussion, Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority, echoed the idea that experiential travel is becoming increasingly valued, and travelers are willing to spend more on it.
In Las Vegas, the city’s average visitor went from having a gaming budget of about $250 pre-pandemic to one that’s more than $300 now, Hill noted. “The propensity to take the money you have to spend on travel and experience is showing up everywhere.”
Elsewhere in the industry, demand for experiences while traveling has led to a proliferation of hoteliers and management companies expanding their presence in the leisure and lifestyle sectors.
However, Sonesta’s Murray warned that leisure demand will likely begin to plateau. In its recent industry outlook report, PwC also predicted that domestic leisure demand will soften in the remainder of the year, citing inflation as the cause. PwC forecasted that individual and group business travel demand will hold strong in 2023 and likely offset decreased leisure demand.
In their panel titled “The Demand Generation: Asking for Everything,” Caiafa, Hale and Murray said business travel demand remains solid, with small group demand “leading the charge,” according to Hale. Murray noted that recovery in some markets, including San Francisco, Minneapolis and Milwaukee, are lagging behind others.