From the glance in the crystal ball
"The art of prophecy ist difficult, especially with respect to the future." This true, very wise, but unfortunately not helpful quote is sometimes credited to Mark Twain, sometimes to cabaret artist Karl Valentin. And still we try to look into the future to plan ahead.
In a dynamic-complex environment, in which globalisation and digitalisation contribute to the fast change of the overall situation, this is impossible for the individual. At best, we can decipher patterns for trends. The only certain thing: After Corona the world will not be the way it was before. We dare to take a look into the crystal ball and discover possible developments for the year 2021 and the following years for the hotel industry.
Seminars, conventions and congresses.
With the availability of vaccines, conventions should be possible again in the third quarter of 2021, under special conditions. This directly and indirectly invigorates the hotel industry. The experience of digital possibilities for the discourse between humans has come to its limits and shows us, that the personal and direct conversation on location is not replaceable. Of course some things are easier to realise in a digital space, resulting in a market with decreased volume. But refrain from this form of conversation and exchange entirely is not a thing of reality.
Business travel will decrease.
Decreasing significantly, also after Corona, will be the sector of business travel. Next to the existing and the new, improved digital options for dialog, the immense time- and cost-factor speaks against the privileges and necessary travels of the past. But not only the question of efficiency, also the topic of sustainability that many companies have pledged their efforts towards, stands in the room. Especially with short-distance travel and high credibility in the public view this argument stings. Business travel will most likely contribute less to the revenue of hotels.
City tourism only recovers slowly.
Due to global restrictions (quarantine regulations, proof of test or vaccination) to international travel and the connected insecurities, but also due to a decrease in private spending budgets attributed to an expected collapse of the economy, this economic sector mostly remains in the years prior. Especially former leaders of the business sector, like travelers from China or USA will decrease in the next to to three years. Here we see light at the end of the tunnel earliest in 2024. Maybe even record highs, like we had in 2019 and before. The only glimpse of hope contributing to the support of the sector likely remains the domestic travel.
Holiday hotels: Blessing in disguise.
While distant travels are slowed down due to regulations, the holiday hotel industry showed an interesting effect in 2020: hotels were mainly frequented by national guests or such from neighbouring countries who didn't have to fly in. Since their budget was already allocated to holidays they spent it somewhere else instead. This behaviour might resurface in 2021, maybe even stringer, depending on the regulatory situations. Because after all the lockdowns and the feeling of being locked-in, people are gravitating towards other places to experience their freedom anew. For distant travelers this will probably only resurface in 2022 soonest, though.
Flexibility is key.
As bad the politically decided measurements may be, however hidden the short- and long-term effects may seem: They also have their positive aspects. Many people only really discovered their underlying needs truly: the freedom to travel, the wish to meet other people, the urge to experience new cultures, they all are a part of it. Seen from the other side, the tourism industry as a whole and the hotel industry, especially, count towards the most customer oriented and flexible industries overall. Already in 2020, hotels in Dubai and non-risk areas in Spain advertised for so-called "digital nomads", freelancers who can work anywhere as long as they have access to their computer. Hotels that offer apartment-concepts in the future, should experience upwind. These chances are often only revealed through crises. Clever hoteliers are quick to act to use the newly found opportunities for themselves.
Not at least by the robust adaptability of the sector, the hotel real estate remains without alternative for investors in the middle- to long-term. Especially when, for example, office real estate, among others, will stagnate in the long term due to increased usage of home-office.