Post-Covid Recovery of International Hotel Bookings Slows Down according to Latest Quarterly HotelHub Index
Wednesday, January 11th, 2023
The recovery of international hotel bookings to pre-pandemic levels slowed down during the last quarter of 2022 in both the US and Europe according to Hotel Hub, the leading hotel technology solution provider for TMCs and their corporate customers.
The latest HotelHub Index for Q4 2022 showed that international hotel bookings from the US decreased steadily over the quarter from 16% of total volumes at the end of Q3 to 13.5% in December 2022. This figure is still a long way short of the 27% of hotel bookings for international travel from the US in December 2019. International bookings from European markets also dipped during Q4, bucking the trend for the previous two quarters, which had shown a steady increase. At the end of Q3 2022, European international bookings were just one per cent below 2019 levels for the same period, but this fell to 3.5% by the end of December 2022.
However, overall global hotel transactions, both domestic and international, made via the HotelHub agency platform and self-booking tool in Q4 2022 continued to surpass pre-pandemic levels significantly. Average global volumes over the quarter were 25% higher compared with the same quarter in 2019. In Europe specifically volumes were on average 11% higher.
The proportion of hotel bookings made online via an OBT connected to HotelHub remained high throughout the quarter, compared with pre-pandemic booking patterns. In the US, 77% of bookings were made online (versus 16% in Q4 2019) and in Europe 65% of transactions were via an OBT (almost double the amount in Q4 2019).
Advanced booking lead times remained consistent across the quarter at around 14 or 15 days, which is on a par with pre-Covid lead times in Q4 2019. However, this pattern contrasts sharply with Q4 2021 when lead times contracted to 10 or 11 days, potentially due to the uncertainty caused by emergence of the Omicron variant.
Average daily rates continued to fluctuate across the quarter. In fact, in several key cities, rates had fallen by the end of the year, compared with the end of Q3. London fell from US$276 to US$265 in October, but rose again to US$272 in December; Paris rose by 5% in October, but fell again by 13% at the end of the year; rates in Rome fell overall by 20% during Q4 v Q3; Seattle fell from
US$248 in September 2022 to US$179 in Dec 2022; and Singapore was down from US$251 in September to US$232 in December. However, although New York rates dipped by 5% in Oct/Nov, they ended the year 12% up on the previous quarter at US$462. In most cities the dip meant that average rates are anything between 5% and 20% less than average rates in 2019 pre pandemic. The one city that saw a rise was New York, where rates have risen by up to 20% above the average rate in Q4 2019.
Eric Meierhans, Chief Commercial Officer, HotelHub commented: “The fact that the volume of international hotel bookings from both the US and Europe has dipped over the final quarter of the year is not particularly surprising, given that business travel’s post-Covid recovery has been impacted by so many parallel geopolitical and economic crises. Global inflation, the cost-of-living crisis, rising energy costs, not to mention climate change are all affecting business travel budgets and decisions about the purpose and validity of a business trip, especially an international trip.
“The fluctuation in average hotel rates is also a sign of the volatility in the market in recent months. We do expect rates to increase however over the first half of 2023 due to the impact of inflation, as well as hotels facing increased costs because of staff resourcing challenges, higher wages and energy bills,” explained Meierhans. “The continued significantly high reliance by corporates on the use of OBTs connected to HotelHub to make bookings indicates that TMC staff shortages and servicing issues are still driving this behaviour,”
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