As 2022 draws to an end, we can all agree that it has been, once more, a roller-coaster ride for the hospitality industry. However, there is no time to reflect on this year as everyone is already looking ahead to 2023 and predicting which trends will impact our industry. We have summarized eight dominant trends and three springs of innovation we can’t ignore. And, traditionally, some inspiring ideas for you for this Christmas season!
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1. Exchange rates affecting travel and tourism
As of December 2022, the U.S. dollar is at a favorable exchange rate against many other currencies, making international travel more affordable for US residents. For example, it has given Americans more purchasing power in Europe than at any time since the early 1980s, as the dollar and euro have almost reached parity. As a result, savvy travelers are choosing where to travel based on the most advantageous exchange rate. Due to the current international context, this trend will likely become stronger next year.
2. Travel spending should increase next year
The willingness to pay for vacation products is expected to increase. A survey conducted by Booking.com stated that “close to half (49%) admit that they plan to be more indulgent in their spending habits while on vacation to make up for the lack of travel during the last couple of years, while 43% plan to spend lavishly to ensure they maximize their trip and every experience is worth it”. In a study conducted by Expedia.com, many people (43%) said “their travel budget will be larger this year than last.”
3. The line between work and travel will become more blurred
The number of digital nomads will increase, especially as some companies such as Spotify have implemented “working from anywhere in the world" policies. However, for some individuals, full-on digital nomadism is too extreme and a more nuanced variation is emerging: “hush” trips. This solution is more temporary compared to the usual length of a digital nomad’s stay and typically lasts less than a month. However, travelers can still spend more time discovering a destination while working when required. The hospitality industry is also expected to witness more bleisure travels, a mix of business & leisure travel where a typical employee travels for business reasons from Monday to Thursday, and then extends their trip for a mini-vacation, often with their spouse or family in tow.
4. Eco-friendly travel is no longer niche
Whether it is under the appellation of sustainable travel, soft travel or eco-travel, more and more travelers are sensitive to the ecological impact of their vacations. Indeed, the YouGov Travel and Tourism Practice found that 44% of US consumers try to make purchases (including travel) from socially and environmentally conscious companies. This trend is also supported by Booking.com and Expedia.com studies. Furthermore, a new type of ecological travel is also on the rise,regenerative travel, aiming at offering trips that have net-positive impacts, bringing sustainability to another level.
5. Digitalization will enhance travel experiences
The digitalization of tourism services will keep rising during 2023 creating more immersive experiences for travelers. Features like the possibility to virtually explore destinations during the booking process will become available. Example of future enhanced travel experience is also supported by entertainment companies, such as Walt Disney Co., which is willing to create a real-world theme park ride that incorporates a parallel 3D virtual-world experience.
6. Traveling by train is here to stay
Travelers increasingly enjoy traveling by train as it is usually more peaceful than the crowded airports and soaring flight costs that many encountered during the pandemic. Moreover, many train routes are being reinstated giving the opportunity to facilitate travel by train. Europe seems to be leading this trend with new overnight trains recently launched. While the primary purpose of taking the train is usually to move from point A to point B, companies are also offering services to make the train a destination in itself, by offering, for example, culinary tourism activities.
7. Destinations that will be trendy in 2023
Forbes listed the 23 best destinations for 2023. When it comes to cultural city gateway, as cities can gain or lose attraction overtime, Expedia.com named the top five cultural cities to visit for next year: Edinburgh, Lisbon, Tokyo, Dublin and New York.
8. Travelers go local - less alcohol and more local food
Travelers now are willing to drink more zero-proof cocktails, (cocktails without alcohol), but still enjoy the fancy look and taste of a regular cocktail. Moreover, they also wish to have the opportunity to eat “Zero-kilometer food“, as “Guests are increasingly looking to have a connection to the land where produce is sourced, and the demand to visit farms or have an ‘agrication’ experience has grown exponentially.” — Michael Young, resort manager at Timbers Kauai at Hokuala in Hawaii.
We suggest you take a close look at these trends to ensure your business is aligned with the changes taking place in 2023!
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Some global changes and trends can be painful for hospitality players, but they also bring opportunities to accelerate the adoption of new technologies and meet ever-changing customer needs.
Digital normal
Going digital looks like an "easy" innovation. Hotels are replacing their legacy systems with new solutions to improve operational efficiency, drive automation, and allow employees to focus on what adds value instead of routine and time-consuming tasks. Undoubtedly, this allows companies to move toward a paperless future and contribute to sustainability, the driving force behind global consumption. Furthermore, business leaders have high hopes for the impact of digital transformation, expecting international transaction and consumer data to improve their operations. NFTs (non-fungible tokens – digital assets with a unique value) are also making their way into the hotel sector. Marriott International has been one of the first hotels to start playing this game. Moreover, some hotels already offer the possibility to book a room using NFTs, the so called 'NFT room packages', and this service is expected to become more popular in the future.
AI is paving the way
The AI (artificial intelligence) technologies are making a huge leap forward. We are already seeing significant breakthroughs, and there are more to come. In the global hospitality sector, these innovations can solve many problems, including staff shortages and the introduction of automation and self-service in customer service, which will be speedy, cost-efficient and accurate. Using robots in customer service is not "futuristic," it's already our era. Smart hotels with a combination of artificial intelligence, AR, VR and connectivity are expected to personalize customer service and make them more loyal and returning guests. Leveraging digital twins and the power of the metaverse may be a more impactful move than one might assume.
Sustainable everything
This is the main direction of hospitality in 2023 by all dominant trends. It will drive major investments, and the hospitality industry is expected to develop and adopt more sustainable solutions in all its activities. Global hotel chains are introducing different programs and initiatives. Furthermore, they also are collecting data on their environmental impact to calculate their carbon footprint. When 4/5 of travelers choose sustainability as an important factor, it is not surprising that this impacts their purchasing choices. As a result, it has become vital for hotels to switch to environmentally-friendly processes and services – and ensure that these initiatives are visible to their customers.
Thus, as mentioned, trains have become trendy, and train bragging is on the rise. Apps, such as Trainline offering“a one-stop-shop for train and coach travel”, seem to have become more popular and offer an easy way to plan a low carbon emission trip. Should you wish to know how transport and mobility are evolving in the hospitality industry, have a look at our monthly digest on the topic. If you are interested in innovation in sustainability, you should look for everything with “zero”: zero-proof cocktails, zero-kilometer food, zero-waste dining, net-zero food system, zero-touch in service automation…
Generally speaking, experts highlight that using green hydrogen in transportation, eating beans and utilizing bamboo for building affordable homes are critical innovative approaches to making progress on the UN SDGs.
We have talked a lot about sustainability in terms of reducing ecological impact, but let’s not forget that companies also need to be financially sustainable. The current shrinkflation negatively affects hoteliers, pushing them to find new ways of keeping the business financially sustainable, such as by downsizing the “offer” while keeping the price tags unchanged.
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Must read, follow, listen, watch to further explore these hospitality trends
- Want to see the most unexpected travel trends of 2023? Take a look at this report. Interested in business events trends? Nine of them are explained here – including the transition from event planners to designers of time. On top of that, McKinsey experts offer a number of specialist insights into the future – “The next normal” – on the future of space, entertainment, food, wellness, shopping, car buying, fashion and more.
- The Financial Times has done a fantastic job suggesting the best books of the year on economics, environment, food and drink, science , travel, business, health and well-being.
- Climate change is a big topic. You can easily access a variety of information at the UN Climate Change Global innovation HUB
- On cold winter evenings you can rewatch "Home Alone" or "Die Hard" to get you in the Christmas/New Year's mood, or you can explore something new by checking out the best TV series of 2022 or listening to the best albums of the passing year.
- Indeed, OpenAI chat is everywhere. But why? Listen to a new episode on “Can ChatGPT make this podcast?” to learn more.
We will continue to keep our finger on the pulse of trends and changes in our world. We wish you success in 2023! We will continue to inspire you to pursue positive shifts, innovations and more sustainability, both in life and in business.
Research Assistant at EHL Hospitality Business School
