Hotel forecasts for 2024 indicate changes and opportunities; after a series of challenges that marked recent years. Among these challenges, the pandemic and the impact of constantly fluctuating interest rates stood out. These factors contributed to the depreciation of hotel assets and the decline in tourism demand.
However, the scenario for 2024 presents signs of transformation of the hotel real estate market. Likewise, trends and projections in traveler behavior, along with changes in technology, are creating a constantly evolving environment that defines the future of hospitality.
FORECASTS OF THE REAL ESTATE HOTEL SECTOR FOR 2024
In recent years, the return on real estate investments has experienced downward pressure. This has occurred, first of all, due to the covid-19 pandemic. And secondly, due to the impact of the rise in interest rates in banks on the value of assets.
In this sense, it is estimated that the investments made between 2018 and 2022 presented a negative return during these five years. However, a stabilization in interest rates and moderate activity is expected to mark the end of the period of asset depreciation.
According to some experts in the hotel real estate sector, we are at a turning point in terms of market transformation. That is, a scenario where there will be more competition for capital, but also more opportunities to transform the hotel real estate sector.
2024 IS THE YEAR OF HOTEL REAL ESTATE RECOVERY
The hotel forecasts for 2024 in terms of the real estate sector. indicate a recovery in investment volumes. To this would also be added a correction in prices. In this order, some experts assume that we are in a phase where prices will be adjusted and investment activity in the hotel sector will accelerate. That’s why hotel investors should be vigilant over the next 18 months. Well, 2024 will be a good year to create good property portfolios.
On the other hand, in the new panorama, the Hotel sector is one of those that is gaining the most strength. According to recent data, the Living segment has achieved 31.4% of the total investment in the first half of 2023. In this way, it exceeds the average of 22.4% registered between 2018 and 2022. This same trend is observed in the hotel sector for next year.
In Spain, in general terms, the hotel stock is very old. Therefore, the loss of value of assets is accelerating. That is why we must invest more and more often to maintain hotel occupancy and asset value.
HOTEL TRENDS AND FORECASTS FOR 2024 RELATED TO THE BEHAVIOR OF TRAVELERS
In a study conducted in July 2023, called Changing Traveler Report, 10,000 people in 12 countries were interviewed. In this survey, questions were asked and the answers were analyzed in relation to several variables. Among the latter, generation, household income, type of accommodation, travel plans and travel companion stand out.
1. THE INTENTION TO TRAVEL MORE IN 2024
As part of the hotel forecasts for 2024, according to the aforementioned study, 91% of those interviewed confessed that they intended to travel, during the next 12 months, at least the same number of times as last year. On the other hand, 57% intend to travel more and only 9% intend to travel less.
India, being the most populated country in the world, is positioned with the most enthusiastic travelers in the world. Additionally, the younger urban commuter who travels and works on vacation is the leading subgroup.
2. INTERNATIONAL TRAVEL PLANNING DOUBLES
The number of travelers planning to travel abroad has doubled compared to previous years. Therefore, within the hotel and tourism forecasts for 2024, international travel is expected to be important.
In this sense, the German market leads the “international travel only” category, with more than 50%. Likewise, the Chinese traveler has risen from 13% to 48% in recent years.
3. RELATIONSHIP BETWEEN INCOME AND INTERNATIONAL TRAVEL
The richest households are the most likely to travel abroad in the next 12 months. Combining this trend with the economic growth of markets like China and India, hotels must be repaired. Well, it is expected that by 2030, for example, China will add 80 million to its middle and upper classes.
In addition, it is estimated that 87% of travelers, in 2023, worldwide are happy to make additional expenses for their accommodation. 21% of Millennials plan to stay in luxury hotels for their next trip.
These hotel forecasts for 2024 demand that the hotel sector prepare to respond to good demand.
BEHAVIOR OF TRAVELERS IN RELATION TO DIGITAL TECHNOLOGIES IN 2024
1. THE ROLE OF DIGITAL PLATFORMS IN HOTEL FORECASTS FOR 2024
It is estimated that the global traveler is 2.5 times more likely to search for hotels through a search engine than through friends or brands. In countries like Thailand, the traveler is 5 times more likely.
Likewise, 36% of Australian travelers look for accommodation using a search engine. These travelers are followed by travelers from the United Kingdom and France. On the other hand, Italians at 32% are more likely to search for a hotel through an OTA or website. This last group is followed by the Spanish and the Chinese with 29% and 28% respectively.
For its part, the use of social networks continues to grow and permeate the travel and hospitality industry. Particularly, its influence is increasing for Generation X travelers.
2. A GROWING SENSITIVITY TOWARDS BAD DIGITAL EXPERIENCES
It is estimated that more than 50% of travelers do not complete an online hotel reservation due to a bad experience. Among these travelers who cancel, 75% of generation Z and Millennials stand out.
Therefore, within the hotel forecasts for 2024, security and the perfect digital experience are priorities. Well, today’s traveler spends a lot of time online and is also exposed to scams. Therefore, a simple and secure booking process should be a fundamental aspect of a hotel website.
OTHER HOTEL FORECASTS FOR 2024
1. THE DEMAND FOR EXPERIENCES AS A PRIORITY
It is estimated that three out of four travelers confess that their demands have changed in the last year. And among the things that today’s traveler wants most is to live a great experience.
Among the markets that most seek memorable experiences, the Indian, Chinese and Indonesian markets stand out. Added to these markets is the subgroup of the young, working traveler who seeks luxury experiences.
Consequently, luxury boutique hotels will be among the most in demand in 2024. And also those that can provide unique and unforgettable experiences.
2. THE HOTEL AS A DREAM DESTINATION
Now hotels are evolving to become special places to spend more time outside the home and office. In this case, the current traveler is looking for this type of accommodation. Well, it is estimated that 50% of travelers surveyed say they want to spend most of their time in accommodation on their next trip.
3. OPTIMISM ABOUT EXTRA EXPENSES
Another aspect that is part of the hotel trends or forecasts for 2024 is optimism towards extra expenses. Well, a large part of travelers are willing to spend additional money on their accommodation.
4. THE DESIRE TO CONNECT WITH THE LOCAL COMMUNITY
It is expected that by 2024, tourists’ desire to connect with local communities will continue to grow. For more than 30% of travelers surveyed globally, this aspect is more important now than last year.
The traveler of 2024 will seek to connect more with culture, gastronomy and people from local communities. This is why accommodation establishments must seek to create deep relationships with their local community. In this way they will be able to offer a meaningful and conscious product.
Forecasts for the hotel sector in 2024 offer an encouraging outlook after years of challenges. The recovery of real estate investments and the correction of prices in the hotel sector indicate a promising future for investors and hoteliers.
Additionally, traveler behavioral trends point toward greater optimism and growing demand for unique experiences. With the importance of connecting with local communities and the preference for digital technologies, the hotel sector is in a constant process of adaptation to offer travelers what they want.