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  • Writer's pictureDori Stein

Top 8 travel trends that hotels need to act on to capture demand in 2021

The travel and hospitality industry has shown its mettle during 2020 – rising to the challenges that Covid-19 has thrown at it and doing everything it can to survive. It’s not been without its casualties. Now, with the prospect of a vaccine, hotels have to be on the front foot to win whatever demand is out there and secure heads in beds. When the vaccine becomes widely available, we expect the leisure market to return more quickly than business travel which will lag considerably.

There are eight key trends that I believe we will see during 2021.

1. Consumers will be more price-conscious than ever before

The impact of national and regional lockdowns has had a major economic impact on countries around the globe. Countries in the OECD area (Organization for Economic Cooperation and Development) saw a spike in unemployment rates at the impact of the pandemic was felt with rates rising overall to 8% in June. As a result, many travelers have less money, have significantly less job security, and are becoming much more price-conscious.

Never has it been more important for hotels to get their rates spot-on and continuously adjust prices based on customer profile, country of sale, and competitor activity. Hotels need to constantly monitor and flex how their rates are shown across all channels and track their comp set rates – remembering to include vacation rentals as well as hotels.

2. OTAs will become even more dominant

In the race to win bookings, hotels are once again increasing their reliance on online travel agencies (OTAs). Hotel chains will devote more of their marketing budget to increase their visibility through booster and accelerator activity as well as running travel ads. They are also likely to be willing to put more money behind promotions to attract guests from feeder markets where brand awareness may be low.

While forging strong partnerships with OTAs will no doubt be crucial to demand generation, hotels must remain on their guard against non-contracted OTAs undercutting rates.

3. Pay Per Stay advertising will be a huge help to hotels

Fornova’s General Manager of E-Commerce George Noppens and our Director of Global Marketing Michail Tzouvelekis have previously spoken at length about Google’s new Pay Per Stay (PPS) bidding strategy (a.k.a. Commission model) for Hotel Ads. This will be a major tool for hotels as they do all they can to capture demand while minimizing risk during 2021. I strongly recommend that all hotels, whether they are part of a chain of any size or independents, should trial PPS, so they can see how only paying for bookings once guest stays have actually occurred could benefit their cash flow.

4. Hotels will also serve as serviced office space

We have already seen some hotels begin to pivot and explore new ways to use their services and spaces to generate revenue. That is expected to continue throughout 2021. One of the most popular options is repurposing restaurant areas and bedrooms into office space. This approach is more relevant to city-centre hotels that previously relied on business guests and the corporate market.

5. The big chains will get bigger

Without the financial support enjoyed by larger hotel chains, smaller chains and independents have been particularly hard hit this year. In a bid to survive, there will be widespread mergers and consolidation in the market as hotel chains acquire struggling hotels who need access to investment and the reach offered by the big brands. Our clients Hilton and Marriott have already announced that they expect to add around 2,000 hotels to their portfolio.

6. PMS providers will turn to open APIs and greater integration

As traditional Property Management Systems (PMS) - e.g. Oracle’s Opera - transition to next generation cloud-enabled solutions, the providers that are likely to gain a greater market share will be those who embrace an open API (application programing interface) approach. An ‘open’ PMS allows hotels to seamlessly integrate their technology stack - comprising RMS, Rate Shopper, F&B, competitive intelligence tracker, etc. on one platform. Not only do users have just one single login, but it makes monitoring and comparing data feeds much simpler. Fornova’s hotel business intelligence tools integrate with the main PMS providers including Oracle , Mews and apaleo, which was the first provider to launch the ‘API first’ concept developing a PMS with open API at its core.

7. Mobilization will continue to grow

This is a trend that shows little sign of going away anytime soon. Although it’s been around for a while, 2021 could be the year where it falls into two distinct camps - those who have the capability to capitalize on the opportunity and those who get left behind.

With their high-converting apps and effective strategies, it will be OTAs and metasearch engines who are the winners in the mobilization trend. For everyone else, without either the technology or clear plan they will continue to lag behind.

8. Intent data will drive decision making

Google’s launch this month of its dedicated Travel Insights with Google platform to provide the travel and hospitality industry with detailed insights into its travel, hotel and destination search data marks a decisive moment in the rise of intent data. Although the hub is focused on the Asia-Pacific market, for now, the fact that these three tools are free to use will be a significant help to the sector and, as the service is opened up to more regions, hotels should make the most of the access.

In the future, the industry could also be given access to Google’s search data that airlines are using to decide which routes to restart. This will help hotels to identify which feeder markets to target. The new tool collates and provides consumer intent search data to airlines partners from across the industry, regardless of airline.

2021 will be a decisive year for the travel and hospitality industry. Hopes of the vaccine saw share values rally amongst some of Europe’s biggest airlines. If that optimism turns into reality, hotels could have their first real flurry of leisure guests to capture, followed later in the year and into 2022 by business travelers. Hotels must act now if they are to be in prime position to welcome those guests through their doors next year.


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