After a positive 2023, the hospitality sector remains buoyant looking at 2024 and beyond. According to Statista, revenue in the hotels market was projected to reach $410 billion in 2023, with an annual growth rate (CAGR 2023-2027) of 4.2% resulting in a projected market volume of $483 billion by 2027.

In global comparison, most revenue will be generated in the United States, standing at US$106 billion in 2023.

Additionally, Amadeus Demand360+^™ data shows there was a 2% increase in hotel Average Daily Rates (ADR) globally in Q1 2024 versus Q1 2023, further demonstrating the stability and health of the industry.

Against this backdrop, hoteliers are looking to invest in technology to differentiate products, offer personalized service and drive revenue.

Plans for digital media campaigns to drive bookings.

Investment in strategic digital media campaigns was a priority for all hoteliers, with ambitions to fill need periods and target profitable audiences. Effective solutions in this area allow stakeholders to monitor campaigns for availability and rate parity, ensuring a property has the most bookable rate.

Responding to the Travel Technology Investment Trends survey, the average hotelier revealed annual spend per property on digital advertising and media was $74,337. The figure stood at $46,251 for single properties, $79,470 for brands and $81,490 for groups or management companies, suggesting larger businesses have more to spend on such tools.

A third of hoteliers (34%) said they spend between $50,001 to $100,000 annually on digital advertising to attract guests to their properties, while a further 21% said they spend above $100,000 annually. All hoteliers said they have a budget for digital advertising – only 22% said they would spend under $25,000 to promote their businesses.

Hotelier average annual spend on digital advertising:

%

Spend under $25,000

%

Spend between $50,001 to $100,000

%

Spend above $100,000 annually

“Effectively managed digital media campaigns pay dividends for hoteliers.”

Scott Falconer

EVP, Media Solutions, Hospitality
Amadeus

Travel Technology Investment Trends researchers asked hoteliers what would be most valuable when creating media campaigns, with the ability to target new segments of guests (41%) cited most often. This attribute was particularly prioritized by brands and properties, cited by 50% and 44%, respectively.

This was closely followed by finding ways to improve current advertising engagement (40%), while knowledge of where guests are currently searching and booking was also considered to be important (39%), coupled with understanding flight data as an indicator of potential travelers to the region (38%).

When thinking about group business, hoteliers prioritized finding ways to strengthen their customer relationships (45%), improve their prospecting of new and repeat business (41%) and their ability to plan and execute group events more effectively (40%).

As part of the group business sales process, hoteliers sought solutions to improve response times to request for proposals (RFPs) with more competitive pricing to maximize price point (44%), as well as improve overall competitive intelligence for responding to inquiries (39%). They are also keen to increase their ability to fill in small group gaps as they emerge (33%).

Areas considered to be most valuable when creating hospitality media campaigns:

%

Targeting new
guest segments

%

Improve current
advertising engagement

%

Knowledge of where guests search and book

%

Understanding
flight data

“RFPs for events and annual room contracts can be laborious to respond to for hoteliers, but they undoubtedly bring in significant revenue.”

Iain Saxton

SVP, On-Property Solutions, Hospitality
Amadeus

Following a significant decline in reservations in 2020 due to the pandemic, effective campaigns helped Hotel Haven Riviera Cancun recover as the resort sought to increase bookings and grow revenue as regulations shifted and individuals were eager to resume traveling.

The hotel crafted a compelling communication strategy to inform guests that they were open for business during the pandemic, implementing remarketing campaigns to deliver relevant and timely information to a target audience that was eager to travel. The strategy included offering attractive promotions during specific periods, with clear and consistent messaging in both English and Spanish. The hotel also collaborated with Amadeus to optimize a display campaign, switching to a new platform that boosted both performance and results.

Following the addition of Amadeus’ Digital Media solution, direct bookings grew by 153% in 2022 when compared to 2021, while display media booking rate increased by 386% and the social media booking rate increased by 258%.

After the resort launched a new website in 2022, revenue grew by an additional 53% and the volume of reservations increased by 41%. In the first quarter of 2023, the hotel saw an increase in direct booking revenue of 105% over 2022.

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Hoteliers keen to drive effective distribution.

Taking advantage of the best distribution solutions can maximize both profit and market reach for hoteliers – important when bookings can arrive from numerous sources.

When it comes to handling these bookings, efficiency (36%), having too many channels to manage (29%) and finding ways of reaching new guest audiences (26%) were the three biggest challenges facing hoteliers in terms of distribution.

Over half of the hoteliers surveyed noted that it was the consolidation of data and sales insights (53%) that was a key driver in using an indirect distribution strategy. Interestingly, 42% felt that indirect channels would also help to improve their sustainability credentials.

At the same time, every one of the hoteliers responding to the survey said they were keen to broaden and improve the services they offer to guests.

Effective management of distribution channels is vital to the sale of hotel rooms, allowing hoteliers to extract the maximum value from working with various agents worldwide.

Channel management ensures accurate, up-to-date information is automatically displayed on all networks to minimize the risk of overbooking, while allowing for increased visibility of room inventory.

Effective merchandising not only drives revenue for hoteliers, but it can also allow for the creation of the personalized, end-to-end experiences guests increasingly expect.

If we can meet all the needs of a guest in a single location, this builds brand loyalty, improves service and creates simple, effective trips for travelers.”

Jose Canelos

VP of Reservation Solutions, Hotel IT
Amadeus

Which merchandising options would you like to offer your guests?

%

Offer experiential stays

%

Car hire

%

Travel insurance

%

Cart abandonment offers

%

Location-based special offers

Demand to expand merchandising options was recorded elsewhere in the Travel Technology Investment Trends research for 2024. For example, more than half of the Online Travel Agencies questioned for the survey cited enhanced abilities to ‘create real-time packages based on traveler need’ as important to their businesses this year when asked how technology could help with selling products. This was the top innovation Online Travel Agencies sought from technology providers.

Deep diving on business intelligence.

Business intelligence (BI) was a key area of focus with hoteliers of all sizes, many of which are seeking a competitive edge by leveraging analytics. Effective tools can turn data into actionable insights for revenue growth and operational efficiency, while also allowing executives to make confident decisions based on reliable intelligence.

The highest value insights from BI are currently counted as:

%

Historical hotel performance data (occupancy, RevPAR and ADR)

%

Future trends

%

Google search trends

%

Competitive set insights on occupancy and rates

%

Air searches by market

Looking ahead, respondents were keen to have more information on Google search trends (34%), corporate and group travel insights (34%) and to increase their knowledge of the nationality and country of origin of their guests (30%).

However, hoteliers surveyed revealed only 21% of group travel teams and 23% of distribution teams use BI regularly. Similarly, only 35% of Chief Financial Officers and 36% of marketing teams say they are using BI data tools regularly. Improving the number of people in the organization that can turn to data for insights should improve performance and decision-making.

In hotel groups or management companies, it was surprising to see only 31% of Chief Executives refer to BI on a regular basis to understand their performance, with 4% saying that no one in the organization currently uses BI.

It is widely understood that BI is a critical part of the strategic decision-making process for hoteliers, with widespread benefits across the business.

Detailed information leads to improved efficiency and increased revenue.

At Amadeus, we are able to bring together more than a dozen data sets in a single location, offering sophisticated rate benchmarking, booking window insights, and industry-wide data with unrivaled integrity.”

Katie Moro

VP, Data Partnerships, Hospitality
Amadeus

The value of effective business intelligence is illustrated by Amadeus’ partner El Conquistador Resort.

As the property became independent, its new owners realized they had to establish a completely new CRS, building a new integration with the property’s PMS, and a compelling digital media strategy to help drive revenue.

Leveraging the insights provided by Amadeus’ business intelligence solutions, in combination with digital media and web solutions, the property was able to establish a strategy to attract the right guests to help drive more direct business, bring in ancillary revenue, and ensure the hotel was able to maintain the level of business to which it had been accustomed. The new buyers trusted that Amadeus’ full suite of reservations solutions would be able to cover every facet of acquiring new business, both from existing and prospective guests. By using the iHotelier® booking engine – the best in the market – they were able to reach a level of direct bookings never seen before.

In just three short years operating as an independent property and more effective targeting as a result of better data, El Conquistador has gone from a 22% direct booking rate in their first year operating independently to now managing a 46% direct booking rate. The resort has been able to bring its ADR back to 2019 levels and has managed to grow every channel year over year by an average of 28%. This includes a 65% growth in brand.com bookings and revenue YoY, paired with a 16% drop in OTA reliance.

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Strong potential for AI to diversify offers.

Virtually all hoteliers (98%) recognize that AI has the potential to bring significant benefits to their businesses. This is a technology that could transform the hotel industry at every level, from planning, marketing and customer acquisition to operations, guest experience and amenities. Hoteliers can use AI-powered tools to drive efficiency gains in everything from post-sale service to data analytics and customer retention.

Today, Travel Technology Investment Trends respondents are looking for AI to help them identify and offer upsell opportunities to travelers at all stages of the booking process (49%). They are also hoping it will enable them to personalize experiences for guests (46%), effectively manage data within the organization to drive efficiencies (44%) and deliver the ability to automatically generate content for websites (43%). Finally, the ability to understand insights about loyal customers and offer them targeted options (41%) and marketing materials (34%) were also important features for those surveyed.

Looking at technology areas that are priorities for the hospitality industry over the one- and five-year horizons, AI appears to be an area with the biggest importance in both the short-and long-term. Generative Artificial Intelligence (Generative AI), such as chatbots, was considered the most important technology in the next year by 37% of respondents, making them the most cited option in this timeframe.

AI and machine learning, such as customer predictive intelligence, were also considered the most important technology for hospitality in the next 5 years by 43% of those surveyed.

AI tools can help hotels to do everything from creating more efficient guest management procedures to adjusting marketing and media campaign strategies based on demand and other factors.

Instead of focusing on mundane and repetitive tasks, hoteliers can dedicate their time, energy and resources to more significant tasks to provide exceptional customer experiences.”

Scott Falconer

EVP, Media Solutions, Hospitality
Amadeus

The technologies expected to make the biggest impact in the short-term are:

Next 12 months

%

Artificial intelligence
(e.g. chatbots) and machine learning

%

Digital payments

%

Data analytics

%

Cloud computing

%

Self-service technology

The technologies expected to make the biggest impact in the long-term are:

More than 12 months

%

Machine learning

%

Extended reality

%

Artificial intelligence
(e.g. chatbots)

%

Digital payments

%

Robotic process automation

Excitement around AI is part of a wider ambition among hoteliers to drive effective distribution across channels and diversify offers to travelers. Smarter retailing has been an aspiration in the hospitality industry for several years and a new range of technologies, alongside AI, are being developed that will enhance the ability to create a more memorable experience for guests.

When activated effectively through the use of technology, personalization can lead to increased satisfaction, loyalty and differentiation, helping hotels stand out in a crowded marketplace where guests increasingly expect tailored experiences.

This was reflected by the survey results, which revealed 92% of hoteliers recognize that personalization is important in elevating guest experiences. Only 2% felt it was unimportant. Some 85% of respondents feel that personalization could help them to deliver more than 5% growth in incremental revenue, while 42% of hoteliers believe it will enhance their offering and better meet guest expectations in the face of higher average daily rates (ADR).

Moreover, 26% of respondents are planning to use BI to increase their personalization options over the next 12 months.

Which of the following merchandising options would you like to offer your guests?

Total

Property

A brand

A group or management company

Specific room attributes

%

Upselling of room types and value-add amenities

%

Personalized onsite experiences

%

Personalized offers for returning guests

%

Last minute promotions on rooms

%

Experiential stays

%

Car hire

%

Travel insurance

%

Cart abandonment offers

%

Location-based special offers

%

Local attraction booking

%

New technology offerings.

Finally, in an encouraging sign, many hotels currently deploy, or are planning to deploy, new technology solutions in the day-to-day operation of properties. Most commonly, hotel organizations use operational tools, such as operations and maintenance software (73%), booking engines (73%), and sales and catering software (72%). On the other hand, just 61% currently use business intelligence reporting, although 26% plan to start using it in the next year, while an additional 9% plan to implement it beyond the next year.