Photo: Depositphotos

While many are quick to point out that the last few years in travel and hospitality were difficult and impossible to predict, a crystal ball wasn’t required to foresee our industry’s resilience. Hospitality is a 24/7/365 job in the face of ever-changing demands. How many workplaces are there where the customer sleeps on site?

The unknowns of 2023 loom large. Market zig zags. Military threats. Global inflation. These potential storms might cause major reactions through our industry. However, one thing we know to expect this year in the travel industry is a shift in power dynamics. Here’s a few critical shifts we expect to see:

The no-chore (and fee-free) guest experience

Nobody likes to pay for a gym they don't use on their trip. And we sure don’t go on vacation only to be stuck doing laundry and cleaning toilets before checking out of a short-term rental. This year we expect to say goodbye to junk fees and household chores. As a result, consumers will have the ability to accurately compare lodging options.

The Biden administration is expected to move forward on abolishing resort fees, which make base rates confusing and sits poorly with customers. Now that Airbnb is instituting Total Pricing (and limiting checkout tasks), hotels and vacations rentals will be forced to compete with one another because now the consumer can easily compare rates and make better decisions. The line between traditional accommodations and vacation rentals continues to blur, and this ultimately puts more power back in the hands of the consumer.

Cash is queen and will drive changes

Consumers still want to travel, but they worry about the economy. Sky-high prices and dwindling personal savings create a situation where hotel guests want to pay as little upfront as possible and as late as possible. This year people will book more cautiously. More hoteliers will flip that to their advantage by pushing travelers toward direct bookings. Hoteliers will continue what they started during the pandemic: sweetening direct booking with flexible rates, no cancellation fees, and perks like upgrades or complimentary amenities. In a cash-strapped world, payment options that require a one-night deposit versus the full payment upfront will help hotels win over more direct business.

Customers are getting savvy. They want their cash to sit on their own balance sheet, not someone else’s, especially during this kind of financial climate. Hoteliers are learning to meet travelers where they are right now. 2023 will stand out as a year when guest experience gets more personal. This will pay off in 2024 and beyond in the form of more guest loyalty and more direct bookings.

MICE makes a comeback

We spent most of last year talking about “revenge” travel. That pent-up consumer demand might taper off this year but another segment is roaring back: MICE. Last year meetings and conferences resurfaced as organizers dipped their toes in the water to see if it was warm.

Big events easily take a year-plus to coordinate. Right now those plans are coming to fruition. We’re seeing an extraordinary number of MICE travelers on the books – and that number might grow significantly since China recently opened its borders for international flights. November 2022 was the first month MICE travel exceeded pre-pandemic volume. In fact today’s MICE outlook shows 2023 beating 2019 altogether for travel volume.

However, size matters here. While corporate meetings rule this segment, we expect to see swings in the opposite direction of the “bigger is better” mentality. Smaller gatherings will be better for everyone, which will impact the location and destination of groups and meetings as well. Not just because we’re worried about transmission of new variants, RSV, or the flu, but because after three years there’s a general desire to establish meaningful connection when we do choose to travel. In a remote world where we're working from home, getting together will become even more important.

Turf wars

Every industry has its gatekeepers, and hospitality has been beholden to Google for quite some time. This year, it looks like that will change. The Digital Markets Act, which was passed into law and goes into effect in May of this year, is an EU regulation meant to prevent companies with large marketplaces (labeled as “gatekeepers”) from monopolistic behaviors. We expect this to have quick repercussions around the globe, and not just for other tech giants. Hospitality will also be affected when the Act forces Google to draw a harder line between its activities: search advertising vs. online travel site.

Google now controls 91.42% share of the global search engine market, so OTAs and other travel booking sites (including other rate comparison sites like Trivago, Kayak and TripAdvisor) spend billions of dollars every year with Google to drive traffic to their sites. While Google has always maintained that they’re in the business of selling ads, their development of Google Hotel Ads created what is essentially a metasearch engine incorporated into its search tool.

With the DMA outright banning gatekeepers’ ranking of their own services ahead of rivals, the placement of Google Hotel Ads prominently throughout travel searches may be affected by this new regulation. Although OTAs have been reducing their reliance on search advertising by shifting budget to brand marketing, they hope this shift in EU power dynamics will weaken Google’s upperhand, thereby bringing more balance. Independent hoteliers also stand to benefit as Google explores more avenues from this shift in OTA marketing spend.

Uncertainty is a given in 2023, like every year. But we expect to see some big swings that return power to the individual travelers and hoteliers everywhere. Status quo is bound to see a shakeup, and as a company that’s been working to shake up legacy tech for the last decade, we’re excited to see it.

About Cloudbeds

Cloudbeds provides the platform that powers hospitality, driving streamlined operations, increasing reservations and revenue, and enabling memorable guest experiences for lodging businesses of all sizes and types across the globe. The award-winning Cloudbeds Hospitality Platform seamlessly combines solutions for front desk, revenue, distribution, guest acquisition and guest engagement in a single unified system, enhanced by a marketplace of third-party integrations. Cloudbeds was named No. 1 PMS and No. 1 Hotel Management System by Hotel Tech Report in 2022 and recognized by Deloitte's Technology Fast 500 in 2021. For more information, visit www.cloudbeds.com.