This week in stats demonstrated how the travel sector -- from hotels & hospitality, to destination marketing -- remains economically prosperous and ever-expanding.
How Technology Is Changing Travel Management
When asked about their current responsibilities, the study showed travel managers are pulled in many different directions. The majority of travel managers cited procurement-related activities (e.g., evaluating and negotiating with preferred travel service providers and obtaining and managing contracts with their providers) among their daily tasks. Travel managers also are frequently responsible for activities related to managing internal and external stakeholder relationships, developing and monitoring programs and policies, as well as other areas such as evaluating technology solutions and applying business analytics.
“New software and services are rapidly changing the way companies manage all procurement categories, and travel is no exception,” Greg Webb, president of Sabre Travel Network, said in a statement. “Strategically-minded travel managers are achieving superior results by using more sophisticated technology and hiring more tech-savvy team members. We see this shift in the research and among our clients.”
Hotels to Reach Highest Occupancy Since 1984 in 2015
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Hotel room rate gains are expected to accelerate in 2015 as the industry reaches its highest occupancy level since 1984, according to a new lodging forecast by PwC US.
Increased momentum of group demand growth during the third quarter of 2014 is expected to continue in the fourth quarter, and into 2015. Lodging operators are reporting solid momentum in group pace for 2015. The strong outlook for group demand, coupled with continued strong transient travel activity and a positive economic environment is expected to drive a solid 8.2 percent increase in RevPAR this year. In 2015, supply growth is expected to accelerate, resulting in moderating growth in occupancy. Still, industry-wide occupancy levels are expected to reach 64.9 percent, the highest since 1984, providing hotel operators with leverage to drive more aggressive pricing.
Based on this analysis and recent demand trends, PwC expects lodging demand in 2014 to increase 4.3 percent, which combined with still-restrained supply growth of 0.9 percent, is anticipated to boost occupancy levels to 64.2 percent. PwC's outlook expects accelerating supply growth of 1.4 percent in 2015, as construction of new hotels gathers momentum (up approximately 40 percent in the third quarter, compared to the same quarter last year). Occupancy levels in the lower-priced chain scale segments are expected to approach or exceed prior peak levels, as price-driven compression from higher-priced hotels drives demand to lower priced hotels.
How Destination Marketing Drives Economic Growth
Destinations that market themselves experience significantly greater employment and economic growth beyond the visitor economy, according to new research by the Destination & Travel Foundation, conducted by Oxford Economics. The Foundation has released a chart summarizing its findings (click to enlarge):
Through a statistical analysis of more than 200 cities over more than 20 years, case studies, interviews and a literature review, the key findings reveal the broad economic benefits reaped by US destinations who spent an estimated $2 billion on promotion and marketing to encourage leisure and convention travel.
The visitor economy was found to drive broader economic growth through four primary channels:
- Destination promotion supports development of transportation infrastructure, providing greater accessibility and supply logistics that are important in attracting investment to other sectors.
- Destination promotion builds awareness, familiarity, and relationships in commercial networks that are critical in attracting investment. Similarly, destination promotion raises the destination profile among potential new residents, supporting skilled workforce growth that is critical to economic development.
- By securing meetings, conventions and trade shows for local facilities, destination marketing organizations (DMOs) create valuable exposure among business decision makers and opportunities to deepen connections with attendees.
- Destination promotion supports amenities and a quality of life that are integral to attracting investment in other sectors in the form of human capital, corporate relocations and expansion.
Key jobs data from the study:
- A 10 percent increase in a destination's visitor-related employment (relative to the US average) causes a 1.5 percent rise in broader employment through catalytic channels.
- Since 1998, hospitality and tourism employment has expanded nearly 10 percent, while aggregate employment in all other traded clusters shrank 1 percent.
The research also demonstrates that across the U.S., economic trends have supported above average growth in the visitor economy. As income levels rise, consumers are dedicating a greater share of spending to travel and tourism.