The rise of social media and the digitisation of the physical world have prompted consumers to spend more and more money on experiences – with travel being a primary beneficiary of that increased outlay but is the industry doing enough?
"Last year we saw a big increase in terms of traveller spend, 24 per cent up on where we were in 2019. Yes, clearly inflationary pressure is going to be part of that, but a lot of that is travellers wanting to spend more on their holiday, more on their trip, and it's not just going further afield, it's not just staying for longer, but it's also about the increased level of luxury when they do want to travel," Alastair Crossley, global head of travel solutions at AXA Partners told delegates at the Resort and Residential Hospitality Forum in Athens.
In parts of Europe, Asia and the US the number of hotels with an average nightly rate of $1000 is on the increase. Inflation has pushed up the price but in the years since the pandemic it seems people are willing to pay it. Part of this is necessity but it also reflects a change in attitude. Travel spending is now seen a core part of the annual budget for many individuals and families.
How long hotels can increase prices for without improving the offering through capex remains to be seen and it’s not just down to the hotels either, the whole tourism infrastructure of destinations needs to be better thought out.
New cities and resorts are being created out of nothing in places like Saudi Arabia putting more pressure on the traditional favourites of Spain, Greece and Portugal.
“Do we have the right level of service offering for those travellers - they want more luxury now, they want to be off the beaten track, they want to be enjoying their travel, they want to spend more money. And do we have the right infrastructure to be able to support that in the volumes that they're likely to move in?” Crossley added.