Industry Update
Opinion Article19 December 2021

Omicron v/s Travel – Holiday Trends from United States to Help the Industry Stay Ahead

By Alan Young, Chief Strategist at Hospitality Net

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If we were to ask you what word described 2020 and 2021, the term “unprecedented” might come to mind. Over the last 24 months, after all, we’ve been berated with mention of the “unprecedented times” and “the new normal” that followed in wake of the COVID-19 pandemic after it first made headlines in early 2020.

But for hoteliers and travel professionals, another term might better encapsulate the shared experience of the pandemic-era: volatile. Like any other industry that offers consumers an experience as a service, Hospitality is especially vulnerable to the impact of world events. In the case of COVID-19, hotels and airlines weren’t simply at the mercy of fluctuating traveler demand, but rather, at the mercy of stay-at-home orders and bans on non-essential travel. In many ways, hospitality encountered a stalemate unlike anything it had ever experienced – an industry that otherwise never stops, came to a sudden, grinding halt.

Now, as the hospitality industry (and the world at large) shifts into a period of tentative recovery, we find ourselves taking a collective sigh of relief – but not without noticing another potential threat on the horizon. Over the last few months, experts worldwide have voiced their concerns regarding the emerging COVID-19 variants. Most recently, the Omicron variant has been making headlines after being first reported by South Africa on November 24th. New data suggests the variant was also found in the Netherlands from samples taken between November 19 and 23, meaning it was likely in Europe before it was in Africa.

While there is still much to learn about the Omicron variant, headlines have been awash with mention of its highly transmissible nature, as well as questions pertaining to vaccine efficacy in the face of this new threat. What does this mean for our long-awaited return to normal? Could this variant derail the road to recovery that hard-hit industries, like hospitality, are finally on? Could borders once again close on the heels of further lockdown measures? Moreover, If historical trends have been circumvented by the COVID-19 pandemic, how can hotels and airlines keep their finger on the pulse of booking demands and anticipate the impact of this latest variant on travel demand?

What Does the Omicron Variant Mean for Holiday Travel?

Fortunately, the technology required to derive travel demand insights at a hyper-local and city level does exist – taking shape as RateGain’s SaaS solution powered by AI called Demand.AI, that empowers hoteliers and travel professionals to identify a demand index for cities ranked from 0 to 100. Using this new platform, we were able to derive essential predictions surrounding the emergence of the Omicron variant.

This index illustrates how demand is evolving over 75 days, and also reveals what type of demand would be coming into the city, the popular booking patterns, and how it would affect hotel and vacation rental bookings. The easy-to-use platform also allows hotels to track demand for each locality within the city, using a map-view or a table view to compare which locality in each city will see higher demand.

Perhaps the most important takeaway is that even though Omicron appears to have created a “small blip” in travel demand immediately, the future demand does not appear to be affected across many regions.

When we look to major cities and travel destinations like New York, we see that even amidst a gradual rise in cases and reporting regarding the Omicron variant, the Demand Index shows strong, stable demand through early next year. Specifically, if we look at late November in New York, the demand index was at 71.71 (out of 100), and now, if we fast forward to the beginning of January, we see a demand index of 71.54. With this data, we can determine that the Omicron variant has had little to no impact on holiday demand.

In many cases, regions that have not detected any Omicron cases yet, such as Las Vegas, see prospective travelers still waiting for more information on the variant; however, an increase in demand is expected across the next 90 days. 

However, when we look at select cities in the US, specifically those which have reported cases of the Omicron variant, there does appear to be a short-term demand decrease after the announcement of Omicron. In Savannah, Georgia, this trend reveals itself, but January and February seem to have a steady increase in demand due to the holiday season. For hoteliers and travel professionals, this is good news. While we can expect slight fluctuations in demand as news regarding the new variant continues to emerge, it seems unlikely that travel demand will come to a standstill as it did earlier this year, pending state-specific response measures.

The Right Way to Attract Future Demand

Where is travel demand coming from? What impacts fluctuations in that demand? It is precisely this line of questioning (and associated data) which should inform the way(s) in which hotels and travel brands allocate their marketing dollars both now and in the future. Using billions of data points on user searches, transactions, and price points across hotels and airlines, car rentals, vacation rentals, as well as other forward-looking demand indicators such as new COVID-19 variants, active COVID cases, vaccination numbers, lockdowns/restrictions news, etc. RateGain’s Demand.AI opens up a world of data-backed, actionable insights. Understandably, at a time when historical context and trends are often made irrelevant by world events, it’s more important than ever before for hoteliers to leverage intuitive forecasting data to optimize strategy and protect their bottom line.

Hoteliers, in this new normal, predicting future demand is more complex than it ever has been – so why not give yourself the tool(s) needed to gain clarity? RateGain’s Demand.AI platform uses forward-looking and real-time indicators to transform the hospitality forecasting process to predict occupancy, bookings better and see peak demand periods. The future doesn’t have to be a mystery – connecting to the power of AI will reveal real-time demand insights that will help any travel-related businesses recover from the pandemic and find long-term success.

Alan Young

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    About RateGain

    RateGain is a global provider of SaaS solutions for the hospitality and travel industry, offering travel and hospitality solutions that unlock new revenue every day. We are one of the largest aggregators of data points globally for the hospitality and travel industry (Source: Phocuswright Report). For more information, visit www.rategain.com.

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