The summer travel season is in full swing and two of the three major summer holiday weekends have passed. In our recent 4th of July outlook blog, we discussed at a high-level the emerging destination trends and renewed interest in urban travel. To provide further insight, we’ve added a new and deeper dive into the top 50 U.S. destinations by overall demand, to see just how significantly travel trends have changed compared to last summer during the period of May 1 – July 11 across both years.

 

 

 

 

 

 

 

 

New York City has surpassed Orlando as the highest overall demand destination for summer travel this year. The top 7 cities remained the same YoY with some small shifts in their ranking order. Virginia Beach and Washington DC took the places Miami and Las Vegas previously occupied in 2021, within spots 8 and 10, while San Antonio moved from spot 8 to 9. The overall demand for top 10 destinations is up over 3% compared to 2021, which is a slight increase over the overall 1% demand increase we reported in our 4th of July outlook.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Within the top 50 destinations, there has been nearly equal distribution of cities gaining demand YoY (23) as those losing demand (27). Interestingly, both the biggest increase and decrease in demand came from beach destinations within Florida. The most notable trend we are seeing this year is the rebound of major metropolitan destinations, including New York, Boston, and Washington DC. Loosening of restrictions and overall traveler sentiment for urban travel are likely the impetus for this changing trend.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A major trend we’re seeing this summer are increased average room rates. Within the top 50 destinations, the average daily room rate has increased this summer 23% compared to the same period in 2021. The rates are particularly elevated in major urban markets, with the top 10 demand cities averaging a 30% YoY increase. Where prices were previously lowered due to diminished pandemic demand, now they’re increasing as demand rises once again, bringing supply and demand back into revived balance.

As Covid restrictions subsided and travel trends have begun to more closely match historical seasonality, the economic climate is now most likely to play a bigger role in influencing travel decisions. With the accommodation price increases and growing concerns over inflation or a recession, people may begin to look for closer destinations. Additionally, people may begin to shorten vacations and trips; average stay lengths have already dropped over 5% compared to last summer.

As these travelers look for more bang for their buck, there are five markets within the top destinations that have had a YoY decrease in average room rates and could become good value destinations in the coming weeks.

 

 

 

 

 

 

 

 

What does this mean for hoteliers?

Travel has come back in a big way and is approaching record levels, despite some softening in the expected MoM seasonality growth from past years. There are a few things you can do to make sure you are maximizing the current opportunities:

• Be price aware. Are your daily rates in line with the current demand and competitor rates for the region? Make sure you’re not pricing yourself out or setting prices lower than they need to be to hit booking goals. If you are able to maintain lower prices than the market, your hotel might just be the value booking that travelers are seeking out.
• Be flexible. Right now, urban markets are experiencing the highest demand. Outdoor and beach destination demand also continues to remain strong. However, from recent history, we know that trends can change on a dime.
• Be prepared. July is typically the highest demand month of the year. Now is a great time to set yourself up for a successful year and take advantage of current demand, knowing that demand will likely begin to taper in the coming months. While we definitely recommend an always-on approach, increasing investment during periods of high demand will help ensure you are not over-leveraging the unknown. 

 

Koddi can help you stay ahead of the curve when trends shift and strategies need to change. We will continue monitoring these trends and providing you updates via our blog. Looking for personalized assistance? Get in touch with our expert team today.