TORONTO — According to a poll by GlobalData, 47 per cent of consumers agree that price is the most important factor when selecting accommodation. In light of the COVID-19 pandemic, people are excited to travel again but are looking to travel on a budget.
“Budget-hotel operators will be well positioned to benefit from an increase in bargain-hunting travellers looking for the cheapest accommodation possible. With many countries still only permitting outbound travel to a handful of countries and domestic holidays booming in the short term, accommodation prices have risen,” says Gus Gardner, associate travel and tourism analyst at GlobalData. “Research conducted by consumer group revealed that U.K. breaks were 35-per-cent more expensive this year than last year. Therefore, travellers will be looking for a bargain among a sea of inflated rates.”
Moreover, 87 per cent of global respondents expressed they’re concerned about personal finances during the pandemic.
“The pandemic has placed a considerable strain on traveller’s finances. Despite this, travel demand is still high, and many are looking to escape, in desperate need for a change of scenery,” says Gardner. “Travellers are more likely to trade extras offered at mid- to upper-scale hotels for a more basic ‘pay-what-you-need’ service standard.”
Because traveller sentiment is changing, many upscale hotels might be impacted due to a limited demand for prestigious atmospheres.
“The financial squeeze from the pandemic will likely push travellers to budget travel options, forgoing loyalty benefits in the process. To counteract the shift towards budget alternatives, mid- to upper-scale hotels should focus their efforts on price promotions. Offering additional discounts for loyalty-program members, freebies or free upgrades could entice those looking to make their stay more comfortable despite a depleted travel budget,” says Gardner. “As travel begins to return, post-pandemic travellers are likely to have reduced funds, and budget hotels will benefit. Price promotions and incentives could be a crucial strategy for mid- to upper-scale hotels to counteract this trend, however, travellers are more likely to be influenced by price in the initial travel recovery period.”