4 Reasons Travel Brands Will be Flying High in 2016

The travel industry has faced a bumpy road over the past few years, but the ever-improving economy will help travel brands arrive at record room rates, higher occupancy, and much more revenue in 2016. To help travel brands prepare to prosper this year, HotelManagement.com reviewed the four highlights of last year that led the hospitality industry toward the promise of profit today.

1. Occupancy Becomes the Key to Revenue
According to a report from PwC, 2015 saw occupancy emerge as the driving force in hotel revenue. And consumer demand for end-of-the-year bookings rose to its highest level in 35 years. Travel marketing experts attribute this surge of stays to steadily strong and increasing consumer demand, as well as a sufficient supply. In 2016, this demand should rise even higher and is expected to set record rates.

2. The Arrival of Development
Last year, the improving economy and growing demand ushered in a surge of hotel development. Expect this desire for development to continue in 2016. In fact, research shows that U.S. room supply could reach up to 1.8% this year, which would be the first time that the industry has exceeded 1% since 2009.

Even though occupancy levels are predicted to greatly exceed the already-high expectations for the year, the rise in development will eventually cause rates to stabilize. Yet the robust and rising demand, coupled with increasing room rates, should result in a 5.7 % increase in total revenue in 2016.

3. Hotel Brands Explore More Consolidation
Last year, developers started building in areas of the U.S. that had a strong need for supply. Yet they also continued to build in the largest cities, which led to a sense of over-saturation. As this occurred, the industry started to make many more—and much larger—portfolio buys.

The trend toward consolidation is expected to continue this year and expand beyond hotels to OTAs. While this will reduce the number of competitors for travel brands, it will make these online rivals much bigger and stronger than ever. But the benefit of OTA consolidation is that it may limit the growth of emerging competitors like Airbnb and Homeaway.

4. Short Visits Become Big
Along with last year’s rising occupancy rates came an increase in transient travelers, which are guests who only stay for short periods of time. Expect to see more of this transient trend in the coming year, with experts expecting a 2.2% increase in transient bookings and a 3.1% daily rate rise through October 2016.

As you can see, the coming year is forecast to bring more development, more demand, and more revenue than ever before. Use these expert trends to help your travel brand experience great success this year.

Discover the trends arriving in travel marketing. Contact MDG Advertising.

MDG Advertising, a full-service advertising agency with offices in Boca Raton and New York, NY, is one of Florida’s top hospitality marketing companies and branding firms. MDG’s core capabilities include advertising, branding, logo design, creative, infographic development, digital marketing, creative media planning and buying, radio and TV advertising, website design and development, email marketing, mobile marketing, content marketing, social media marketing, and SEO. To stay on top of the latest trends in travel marketing and advertising, contact MDG Advertising.

Written by Michael Del Gigante