Around the world: the IHM editorial team [George Sell, editor-in-chief; Paul Stevens, writer – Short-term rentals; and Eloise Hanson [Hospitality Editor] offer a review of what to expect from the travel, hospitality, and real estate industries in 2024 in our annual A-Z article.
A for All Inclusive
The new wave of hotels and all-inclusives is firmly rooted in luxury. In recent years, major hotel chains have become an active player in the all-inclusive sector, most notably Hyatt, with its $2. 7 billion acquisition of Apple Leisure Group in 2021. Marriott has since expanded its portfolio from all-inclusive to comes with Marriott Hotels, with additional brands such as W Hotels and Ritz-Carlton joining soon. Accor component Ennismore launched its all-inclusive collection in September 2023 and plans to expand it to 50 hotels over the next 3 years, while Hilton is developing its all-inclusive portfolio in Central America with plans to launch it in the EMEA region. Independent luxury hotels have also turned to all-inclusive. To combat the slow season for the Scottish tourism industry, The Torridon has introduced a 3-day all-inclusive retreat, available from November to March. Combining room rates and meal expenses has benefits for the consumer, who can better budget and manage costs. For staff, however, this requires emphasizing a direct sales strategy to minimize distribution costs, as well as educating staff members on upselling when appropriate. Independent hotels are arguably more talented than hotel chains in those areas, meaning we may see more households launching all-inclusive deals in the near future. Advantage Travel Partnership booking data shows all-inclusive travel remains the most popular boarding option among UK travelers by 2024. All signs point to further expansion in the hotel and all-inclusive hospitality sectors Array Hey.
B is for travel
Business travel has fundamentally changed. The cost of office space has fallen primarily due to the emergence of a hybrid workforce, impacting the need for workers to settle in urban centres. By 2032, cities in Africa and the Middle East are expected to dominate the list of popular destinations for business trips abroad, a fundamental shift from the global monetary centers of London, Paris, Toronto, Dubai, Shanghai, etc. In the market, business travel forecasts for some serviced apartment agents and operators have eased for next year, and those who have traditionally catered to business travelers will want to expand their visitor base. With global business travel spending expected to surpass its pre-pandemic point of $1. 5 trillion in 2024, priorities for the coming year revolve around cargo management. Only one essential trip will be taken, supported by a series of trends that will shape long-term business travel beyond 2024. Sustainability is gaining importance among travel managers. Lodging agents, Situ added, have stepped up their efforts to measure and report ESG issues within their source chains, and SilverDoor has introduced a carbon calculator to allow companies to track their sustainability goals. travel. Technology will therefore play a leading role in the long term, specifically with the influence of AI and its programs in the broader travel and tourism sectors. TravelPerk’s recent $104 million investment is a strong sign that the business travel generation is ready to invest. Hey.
C is for consolidation
2023 has not been a wonderful year for deal negotiation, but there is a genuine sense that 2024 will see an acceleration of M&A and consolidation activity, interest rates offered, and inflation to decline. Late last year, Fortune reported that about 1,200 U. S. personal corporations are expected to run out of money in the coming months, with travel, hospitality and real estate business owners likely promoting rather than taking on more debt through expensive refinances. The short-term rental and serviced apartment segments remain highly fragmented and lagging behind the hotel sector in terms of logo recognition. As a result, logos that are in a hurry to grow and offer a transparent offering to consumers and investors can also capitalize on through shopping competition. that can crecer. su footprint. In the meantime, the acquisition of Mr.
D is for Dave Stephenson
Dave Stephenson may not yet be a familiar figure in the hotel and hospitality industries, but his new role as Airbnb’s first director of advertising will make him one of the most important and influential figures in the sector next year. Stephenson, former chief financial officer of Airbnb and Amazon’s global customer business unit, was promoted this year to lead three key missions for the home-sharing platform: driving foreign expansion; grow Airbnb’s global host network; and lead all commercial and corporate progression activities. As CEO Brian Chesky calls it a “turning point” for Airbnb, there have been rumors that the company would expand further into new offerings, products and verticals [e. g. car rental] to expand into underpenetrated markets, and Stephenson will inevitably play a central role in implementing this vision going forward. The shakeup of Airbnb’s senior team also extends further: Former White House staff leader Ron Klain is the company’s new general counsel, Ellie Mertz replaces Stephenson as Array’s chief financial officer and global head of hosting , Catherine Powell, takes on an advisory role. adding what will give new impetus to the expansion of Airbnb’s scope of action. P. S.
G is for Generative AI
We couldn’t make a list from A to Z without at least mentioning AI, a global market that is expected to grow between twenty-fold and two trillion dollars by 2030 [according to Statista]. Generative AI [a type of AI technology] is already transforming our personal and professional lives with algorithms that allow us to produce all types of content, from text to images, audio and artificial data. Array The effects for travel, hospitality and real estate companies. are just coming to fruition as part of a push to increase potency and stimulate growth. Additionally, it will showcase creativity and expose mediocrity as the need for hyper-targeted offerings skyrockets in the market. At the same time, the increasing speed of adoption of generative AI raises some questions as we delve deeper into the prospects of this technology. AI-generated content still presents ethics, quality control, security and privacy issues, while its intelligence is still at the human level. Regulation is also on the horizon, specifically in Europe, as the European Commission introduces its EU AI law to identify a physically powerful framework and impose strict sanctions on corporations using AI that do not comply with the legislation. P. S.
The hostel market is expected to grow from $6.35 billion in 2023 to $6.64 billion this year. By 2028, the market is forecasted to expand to $8.06 billion at a compound annual growth rate of 4.9 per cent. These numbers are pretty impressive given many hostel businesses have struggled over the past year – Youth Hostels Association for example is selling 30 per cent of its stock in England and Wales, attributing the sale to “pandemic shutdowns, the cost of living crisis and steep inflation”, whilst 11 of its hostels in New Zealand and 19 in Australia were permanently closed between 2021 and 2022. Elsewhere in the market, the A&O Hostels platform is up for sale at a value of €800 million. The portfolio features 40 properties in 25 cities and nine European countries – it could mark one of the largest portfolio sales the hospitality industry has seen in years if the sale completes in 2024, and a huge vote of confidence for the sector. Over in Columbia, IDB Invest has recently provided $5 million financing to Viajero Hostels, a lifestyle platform sponsored by Grupo Pegasus. And a mammoth 775-bed hostel is currently being developed on Dean Street in Soho, London, with a scheduled 2025 opening. The signs would suggest that the hostel market is on the up, especially given the rise of solo travel which will further fuel demand, performance and expansion. EH.
I’m for immersive experiences
Over the past year, IHM’s editorial team has earned invitations to magic mushroom retreats, murder mystery weekends, tantric spa experiences, and more. We wondered when the time would come to explore the full sensitivity of immersive retreats, and I’m lucky enough to be researching this emerging trend. Google Trends shows that, in February 2019, the term “immersive travel with constant experience” peaked in early October 2020. “Immersive fast travel” gained popularity in early November 2021, and “immersive travel with constant experience” “consistent” has become the newest popular term, peaking in mid-2021. February 2023. Gen Z and Millennial travelers have led the charge when it comes to consistently immersive experiences: According to the Report According to American Express Travel’s 2023 global travel trends, 79% of Gen Z and millennial respondents were looking to “live like a local” in the destination they were visiting. and 84% would rather go on a dream vacation than buy a new luxury item. 47% of Gen Z and Millennials have also planned an entire vacation around an express restaurant, and 45% have planned a vacation around a food festival. One of the most lucrative sectors where immersive and consistent experiences are evolving at a dizzying pace is wellness. The Global Wellness Institute estimates that through 2027, the wellness economy will make up 6. 6% of global GDP, or $8. 5 trillion. The top leaders in smart wellness expansion projected through 2027 are wellness real estate [17. 4 percent annually] followed by wellness tourism [16. 6 percent annually]. The global wellness tourism sector is also projected to grow at a compound annual expansion rate [CAGR] of 12. 42% between 2023 and 2030. Rising fitness and wellness awareness among travelers will inspire hotel providers to introduce a wider diversity of experiences: some activities. More left frame than others. My only recommendation would be to not mix psychedelics with homicide mystery retreats. Hey.
J is for joint ventures
K is for KPIs
Benchmarking KPIs have moved from RevPAR [profit consistent with available space] to TRevPAR [total profit consistent with available space] or even GOPPAM [gross result or consistent with available meter]. Largely driven by increased demand for compatible residential facilities and other hybrid accommodation concepts, the provision of new offerings in terms of profitability per room is having a significant effect on traditional profitability models and KPIs. Transforming underutilized spaces is a preferred direction for some supporters, with the addition of coworking spaces, pop-up shops, activity studios, and more. Flexible living features are also increasing, with short- and long-term visitors housed under one roof. As a result, asset control systems will want to evolve to provide greater support and manage diverse profit streams. New regulatory pressures to measure and report ESG knowledge are causing some headaches. Lately there is no agreement on the KPIs that consistent actors deserve to monitor, or the 0 carbon/net carbon relief frameworks that deserve to be followed. Organizations like the Sustainable Hospitality Alliance, Energy & Environment Alliance, Considerate Group, and many others offer useful ESG resources and educational systems for homeowners and concerned professionals. Hey.
L is for work
For the letter ‘L’, we have the homonym Labour, in reference to both the UK political party as well as the workforce. 2024 marks a big year for global elections. The UK General Election is expected to take place in the second half of this year, with November floated as the most likely month. The latest YouGov voting intention poll [at the time of writing] shows Labour and Conservatives receiving 47 per cent and 20 per cent share respectively. Should Labour come to power in 2025, its manifesto highlights some policies which will be of benefit to the hospitality sector, including the provision and availability of childcare, as well as a planned review of business taxes to include the industry. On the flip side, a ban on zero-hour contracts would be problematic for many employers. Regarding the workforce, figures from the Office for National Statistics show there were 112,000 vacancies in hospitality at the end of 2023, down from 147,000 at the same time in 2022. Current vacancies remain far higher than pre-pandemic levels, when there were 89,000. UKHospitality is campaigning for a reform of the Apprenticeship Levy, such as freeing up funds to be used for non-apprenticeship training and a modular approach for learners who can build towards an apprenticeship. By offering employers further support to enhance their skills and development offering, it may encourage more bodies to enter the industry and fill much-needed roles. EH.
Maslow Capital has effectively provided Yari Investments with a progressive loan of £18. 1 million for the structure of a cohabitation allowance in Feltham, south-west London. Rachel Gordon, Head of Transaction Execution at Maslow Capital, said: “This assignment exemplifies Maslow Capital’s commitment to helping the progress of cutting-edge, high-quality housing solutions in the UK. The use of modular structure techniques in this task not only allows for a faster and more effective structure, but also allows our borrower to achieve more environmentally friendly progress. . We are pleased to help utilize those cutting-edge strategies and they will play a key role in the future. GS.
N is for NUMA
Amid a challenging economic environment and fragmented property management landscape where operators are being forced to lay off staff or cut down on units, NUMA stands out for its aggressive expansion strategy. In the past year alone, the Berlin-based hospitality platform, which focuses on hotel and commercial properties in Europe’s major cities, has achieved some noteworthy milestones, including surpassing €1.5 billion in real estate assets under management [5,200+ units] and raising $59 million in growth equity capital through a Series C funding round. NUMA asserts its USP vocally – that it can attract tourists and business travellers alike while traditional hotel chains struggle to adapt to new consumer behaviours and short-term rental platforms face tightening city regulations across the continent. The company’s purchase of Dutch competitor YAYS in November is a sign of things to come too in 2024. Leveraging the investment in its tech stack and focus on enhancing the travel experience, NUMA is strengthening its reputation as a dominant player in Europe and positioning itself for expansion into attractive core markets such as Amsterdam and Paris. PS.
O is for Olympics
The hosts will await the Paris 2024 Olympic and Paralympic Games with as much anticipation as the sports enthusiasts who are lucky enough to purchase tickets. As an official component of the Games, Airbnb is preparing to host up to one million potential climbers in the French capital and other territories hosting the Games, while the Paris Tourist Office expects around 16 million climbers to do so. stopover in the Paris region on those dates. of the Olympic and Paralympic Games. Indeed, accommodation demand from July to September will be almost unprecedented and will place significant pressure on the transportation, housing and hospitality markets as supplies struggle to keep up, prompting Airbnb CEO Brian Chesky to plead to Parisians to welcome the stopover organizers at the Games. Despite this fervor, the sporting spectacle [and Airbnb sponsorship] is at odds with the French government’s attempt to regulate short-term rental operations in the country’s cities and align their costs with those of other accommodation providers. . Anne Hidalgo, mayor of Paris since 2014, announced her goal of organizing a referendum in 2020 on the activities of Airbnb and other platforms in the capital as part of her post-Covid recovery strategy, and her position has not weakened since. . P. S.
P is for Population
Population growth and decline have significant effects on the real estate and hospitality/travel industries. In the UK, which faces a severe shortage of hard work, the population could reach almost 74 million by 2036, with net migration driving the rise, figures show. The Office for National Statistics [ONS] forecasts that the population will increase by 6. 6 million people [9. 9 per cent] between 2021 and 2036. This includes net migration of 6. 1 million people and around 500,000 more births What deaths. Increasing net migration can help alleviate the recruitment challenge, which has been severely exacerbated by the loss of EU staff after Brexit. ONS figures imply there may be a million more elderly people aged 85 or over in the UK by 2036. This will require a huge increase in production in the care home sector, which is already undersupplied. more than 600,000 units. according to CBRE. Andrew Surgenor, senior director of operational real estate at CBRE, said: “There is a clear desire to magnify the range and quality of housing available for this population group. Developers can solve this challenge by extending occupancy periods, i. e. in terms of affordable rent and occupancy, thus opening up the possibility of a more varied and available offer.
In other parts of the world, population expansion (and the consequent burgeoning middle class) means that large numbers of people are traveling for the first time. The middle class is the fastest-growing primary segment of India’s population, both in percentage and absolute terms. Overall, it grew by 6. 3% per year between 1995 and 2021. It now accounts for 31% of the population and is expected to grow 38% through 2031 and 60% through 2047. More than a billion Indians will make up the middle class. as India celebrates 100 years of independence in 2047. GS.
Q is for fast
In an era of instant gratification, driven by the immediate speed of technological advancement and the convenience of online shopping, consumer demands and desires have undergone a transformative shift. The rise of e-commerce giants like Amazon has played a critical role in shaping customer expectations, reaching beyond the realm of retail and influencing the way Americans think about the speed and power of Array. They have become an integral component of the overall e-commerce experience. As a result, service providers have adapted and optimized their processes to meet conversion expectations. The domino effect is a landscape where users expect immediate booking procedures, quick responses to queries, instant check-ins, and hassle-free reporting such as contactless payments. The immediate and moving nature of the fashion world is also well illustrated by the meteoric rise of TikTok. Short videos have become a difficult tool for ambitiousArray and marketers are now taking advantage of the engaging nature of short videos to showcase destination highlights and hotel amenities as well as a percentage of user-generated content. user in a visually attractive format. Just to see how much our daily lives are speeding up, this entire segment was written through ChatGPT. Hey.
S is for Saudi Arabia
T is for taxes
It is said that nothing in this world is certain unless death and taxes are one of the hot topics of verbal exchange and tourism in 2024. Nowhere will this be more prevalent than in Europe, where destinations such as Venice, Paris, Amsterdam, Valencia, Barcelona, Madrid, Olhao, Faro and Figueira de Foz are preparing to introduce new tourist taxes this year. While the law would likely range between regional and municipal taxes, cities are contemplating the opportunity to crack down on noisy and anti-social behavior, fund municipal innovations and services, and discourage mass tourism, while charging visitors a small fee for the duration of their stay. Meanwhile, Her Majesty’s Department of Finance and Customs in the U. K. is tightening its grip on tax evasion by requiring platforms like Airbnb to collect and percentage the main points of hosts who make at least 30 transactions a year from online side activities such as short-term rentals.
The hype around web3 seems to have disappeared from public discourse, however its impact on the hospitality and living sectors should not be overlooked. I’d argue that virtual or augmented reality experiences are the most popular applications of web3 currently, providing operators the opportunity to showcase properties, plan meetings and events and more. Many brands have also entered the metaverse which has supported sales and marketing strategies as well as recruitment. I won’t pretend that I know a huge deal about blockchain technology which powers the web3 model. I understand it will help businesses to securely store and manage data without the need for third-parties, which given the reliance on external partners to carry out bookings and transactions, could only be of benefit to the hospitality and living sectors. Applications include automated contracts for tenants, secure identity checks, and personalised loyalty programs. Blockchain technology could effectively reduce fees paid to third-parties, and when paired with AI could provide analysis of customer data to inform offers and rewards. EH.
X is for X
Since Twitter was bought by Elon Musk [CEO of Tesla and SpaceX] in October 2022 and rebranded as X last April, the platform has rarely been out of the news – as much for Musk’s high-profile antics as the bugs and outages on the site itself. Musk’s arrival promises to take X in a new direction, broadening out from its social networking and journalistic functions into his vision for an “everything” app, where users could eventually communicate, shop, consume entertainment and “live” all on one app. Interestingly, Musk originally created X.com in 1999 to become an all-in-one financial platform, which would later go on to rebrand as PayPal. The billionaire businessman is nothing short of ambitious and it would be no surprise to see X venture into the travel and hospitality space if it can attract new demographics to the third-biggest social media network worldwide. His forthright opinions on the app, however, have caused widespread controversy. Online travel agencies Airbnb and Expedia suspended their advertising on X after Musk was accused of antisemitism for a critical tweet about Jewish communities, while non-profit group Media Matters alleged that its adverts were appearing alongside pro-Nazi content and hate speech. Apple, Uber, Microsoft and Coca-Cola all pulled their ads too, leaving X with an uncertain future despite its overarching ambitions. PS.
Y is for the Y combiner
2023 has been a brutal year for generational corporations in the travel, hospitality, and real estate industries, for a number of reasons. Overhiring, a lack of protection against economic shocks and market volatility, and a desire to improve tech power are just a few of the reasons attributed to the announced wave of start-up layoffs over the past year. Given this, it is desirable that access to Y Combinator, the Silicon Valley technology startup accelerator, is the most competitive in history with 44,000 programs won this year, according to Bloomberg. On the other hand, Y Combinator’s summer cohort acceptance was less than 1%, the lowest in the incubator’s history. As Y Combinator CEO Garry Tan explains, job cuts at big tech corporations have “freed up” other people to work at large new corporations and “small techs” can still thrive in a turbulent economy. Although efficiencies can be achieved and inventions such as AI will be adopted, marketers will be looking for the next industry-defining solution. PD.