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Hotel Reception Check-inThe international travel landscape in 2023 is witnessing a phenomenon of unparalleled magnitude: an astonishing rise in hotel room rates. A recent study from Mabrian, a leading travel intelligence provider, reveals a jaw-dropping 64.03% increase in hotel prices in North America this August compared to the pre-pandemic era 2019. Europe and Asia are not left behind, registering a 16.75% and 48.5% surge, respectively.

Such unprecedented spikes beg pressing questions: Is this a fleeting post-pandemic trend or the inception of a new norm? How does this surge impact the traveller’s perception of value, and what innovations can be harnessed to tackle this challenge?

We engaged thought leaders across the travel supply spectrum to unravel this conundrum. Their insights provide clarity and chart a path for the industry to navigate this evolving landscape.

A young man and a woman came to the travel agency.

A young man and a woman came to the travel agency. They want to go on a trip during their holidays. The girl agent offers them different countries. She shows it in the booklet.

Christian Sabbagh of Travelsoft, a trailblazer in the Software-as-a-Service (SaaS) domain, believes this could be a boon for the agile and innovative. With Travelsoft at the helm of cutting-edge platforms like Traffics, Orchestra, and Travel Compositor, Sabbagh opines, “By adopting strategic approaches, travel agencies and intermediaries can still offer competitive prices. The rising demand opens doors for suppliers to integrate groundbreaking features like dynamic pricing or loyalty rewards, ensuring users get value for every dollar spent.”

However, BEONx, renowned hotel revenue management consultants, caution that this golden phase might be ephemeral. Alex Barros, their Chief Marketing & Innovation Officer, emphasized the importance of perceived value. He remarked, “It’s not just the sticker price but the perceived value that matters. If guests don’t perceive a hike in service commensurate to the price they’re paying, it could be detrimental to the brand. Using technology to augment other profit avenues, be it in food & beverage or city tours, could be the key.”

Differentiation should be at the core of hoteliers’ strategies, asserts Gareth Matthews, Chief Marketing Officer at Didatravel, a global travel distribution magnate. “In this high-demand phase, travelers seek value that justifies the steep prices. Hotels need to up their game, delivering unparalleled experiences and impeccable service. A sub-par experience at a premium price can lead to adverse reviews, undermining brand value.”

While industry juggernauts deliberate on balancing profitability and value, Emilie Dumont of Digitrips offers a grounded perspective. As the captain steering the ship of the multifaceted travel platform, MisterFly, Dumont is all too aware of the vast segment of budget travellers. She asserts, “Not every traveller is ready or willing to pay the elevated prices. Many still hunt for discounts and deals. To ensure sustained occupancy, the industry must devise ways to offer competitive rates. Our latest innovation, the ‘Best Price Tracker,’ is designed to ensure travellers benefit if rates drop post-booking, ensuring value at every step.”

As the dust of the pandemic settles, revealing a transformed travel terrain, the industry stands at a crossroads. It is now up to its leaders, armed with insights, technology, and innovation, to chart a path that marries profitability with unparalleled guest experiences. Only time will reveal the ultimate trajectory, but one thing is clear: change is the only constant, and adaptability will be the key to thriving in this brave new world.




Written by: Michelle Warner