Worldwide: IHM’s editorial team [George Sell, editor-in-chief; Paul Stevens, editor – short-term rentals; and Eloise Hanson [editor – hospitality] provide a glimpse into what to expect for the travel, hospitality and real estate sectors in 2024 in our annual A-Z article.
A is for All-inclusive
The new wave of hotels and all-inclusives is firmly rooted in luxury. In recent years, major hotel chains have become an active player in the all-inclusive sector, most notably Hyatt, with its $2. 7 billion acquisition of Apple Leisure Group in 2021. Marriott has since expanded its portfolio from all-inclusive to comes with Marriott Hotels, with additional brands such as W Hotels and Ritz-Carlton joining soon. Accor component Ennismore launched its all-inclusive collection in September 2023 and plans to expand it to 50 hotels over the next 3 years, while Hilton is developing its all-inclusive portfolio in Central America with plans to launch it in the EMEA region. Independent luxury hotels have also turned to all-inclusive. To combat the slow season for the Scottish tourism industry, The Torridon has introduced a 3-day all-inclusive retreat, available from November to March. Combining room rates and meal expenses has benefits for the consumer, who can better budget and manage costs. For staff, however, this requires emphasizing a direct sales strategy to minimize distribution costs, as well as educating staff members on upselling when appropriate. Independent hotels are arguably more talented than hotel chains in those areas, meaning we may see more households launching all-inclusive deals in the near future. Advantage Travel Partnership booking data shows all-inclusive travel remains the most popular boarding option among UK travelers by 2024. All signs point to further expansion in the hotel and all-inclusive hospitality sectors Array Hey.
B is for travel
Business travel has fundamentally changed. The cost of office space has fallen primarily due to the emergence of a hybrid workforce, impacting the need for workers to settle in urban centres. By 2032, cities in Africa and the Middle East are expected to dominate the list of popular destinations for business trips abroad, a fundamental shift from the global monetary centers of London, Paris, Toronto, Dubai, Shanghai, etc. In the market, business travel forecasts for some serviced apartment agents and operators have eased for next year, and those who have traditionally catered to business travelers will want to expand their visitor base. With global business travel spending expected to surpass its pre-pandemic point of $1. 5 trillion in 2024, priorities for the coming year revolve around cargo management. Only one essential trip will be taken, supported by a series of trends that will shape long-term business travel beyond 2024. Sustainability is gaining importance among travel managers. Lodging agents, Situ added, have stepped up their efforts to measure and report ESG issues within their source chains, and SilverDoor has introduced a carbon calculator to allow companies to track their sustainability goals. travel. Technology will therefore play a leading role in the long term, specifically with the influence of AI and its programs in the broader travel and tourism sectors. TravelPerk’s recent $104 million investment is a strong sign that the business travel generation is ready to invest. Hey.
C is for consolidation
2023 wasn’t a vintage year for dealmaking but there is a real sense that 2024 will see a ramping up of merger and acquisition [M&A] activity and consolidation, provided that interest rates and inflation fall. By the end of last year, Fortune reported that around 1,200 private US companies are anticipated to run out of money in the coming months, and travel, hospitality and real estate business owners could look to sell rather than take on higher debt burdens through costly refinancing deals. The short-term rental and serviced apartment segments remain highly fragmented and behind the hotel sector in terms of brand recognition, therefore brands that are in a hurry to grow and provide a clear offering to consumers and investors could capitalise by snapping up competitors that can expand their footprint. Meanwhile, Hyatt’s acquisition of Mr & Mrs Smith plus the unveiling of its new Homes & Hideaways vacation rental platform exemplify the continued blurring of lines between asset classes. Expect to see more transactions from private equity firms in software and holiday parks, while credit cards and fintechs are also muscling into travel. PS.
D is for Dave Stephenson
Dave Stephenson may not yet be a familiar figure in the hotel and hospitality industries, but his new role as Airbnb’s first director of advertising will make him one of the most important and influential figures in the sector next year. Stephenson, former chief financial officer of Airbnb and Amazon’s global customer business unit, was promoted this year to lead three key missions for the home-sharing platform: driving foreign expansion; grow Airbnb’s global host network; and lead all commercial and corporate progression activities. As CEO Brian Chesky calls it a “turning point” for Airbnb, there have been rumors that the company would expand further into new offerings, products and verticals [e. g. car rental] to expand into underpenetrated markets, and Stephenson will inevitably play a central role in implementing this vision going forward. The shakeup of Airbnb’s senior team also extends further: Former White House chief of staff Ron Klain is the company’s new general counsel, Ellie Mertz replaces Stephenson as Array’s chief financial officer and global head of hosting , Catherine Powell, takes on an advisory role. adding what will give new impetus to the expansion of Airbnb’s scope of action. P. S.
G stands for Generative AI
We couldn’t make a list from A to Z without at least mentioning AI, a global market that is expected to grow between twenty-fold and two trillion dollars by 2030 [according to Statista]. Generative AI [a type of AI technology] is already transforming our personal and professional lives with algorithms that allow us to produce all types of content, from text to images, audio and artificial data. Array The effects for travel, hospitality and real estate companies. are just coming to fruition as part of a push to increase potency and stimulate growth. Additionally, it will showcase creativity and expose mediocrity as the need for hyper-targeted offerings skyrockets in the market. At the same time, the increasing speed of adoption of generative AI raises some questions as we delve deeper into the prospects of this technology. AI-generated content still presents ethics, quality control, security and privacy issues, while its intelligence is still at the human level. Regulation is also on the horizon, specifically in Europe, as the European Commission introduces its EU AI law to identify a physically powerful framework and impose strict sanctions on corporations using AI that do not comply with the legislation. P. S.
The hostel market is expected to grow from $6.35 billion in 2023 to $6.64 billion this year. By 2028, the market is forecasted to expand to $8.06 billion at a compound annual growth rate of 4.9 per cent. These numbers are pretty impressive given many hostel businesses have struggled over the past year – Youth Hostels Association for example is selling 30 per cent of its stock in England and Wales, attributing the sale to “pandemic shutdowns, the cost of living crisis and steep inflation”, whilst 11 of its hostels in New Zealand and 19 in Australia were permanently closed between 2021 and 2022. Elsewhere in the market, the A&O Hostels platform is up for sale at a value of €800 million. The portfolio features 40 properties in 25 cities and nine European countries – it could mark one of the largest portfolio sales the hospitality industry has seen in years if the sale completes in 2024, and a huge vote of confidence for the sector. Over in Columbia, IDB Invest has recently provided $5 million financing to Viajero Hostels, a lifestyle platform sponsored by Grupo Pegasus. And a mammoth 775-bed hostel is currently being developed on Dean Street in Soho, London, with a scheduled 2025 opening. The signs would suggest that the hostel market is on the up, especially given the rise of solo travel which will further fuel demand, performance and expansion. EH.
I’m all for immersive experiences.
Over the past year, IHM’s editorial team has earned invitations to magic mushroom retreats, murder mystery weekends, tantric spa experiences, and more. We wondered when the time would come to explore the full sensitivity of immersive retreats, and I’m lucky enough to be researching this emerging trend. Google Trends shows that as of February 2019, the term “immersive travel with constant experience” peaked in early October 2020. “Immersive fast travel” gained popularity in early November 2021, and “immersive travel with constant experience ” has become the newest popular term, peaking in mid-2021. February 2023. Gen Z and Millennial travelers have led the charge when it comes to consistently immersive experiences: According to American Express Travel’s 2023 Global Travel Trends Report, 79% of Millennials surveyed Z and millennials were looking to “live like a local” in the destination they were visiting. and 84% would rather go on a dream vacation than buy a new luxury item. 47% of Gen Z and Millennials have also planned an entire vacation around an express restaurant, and 45% have planned a vacation around a food festival. One of the most lucrative sectors where immersive and consistent experiences are evolving at a dizzying pace is wellness. The Global Wellness Institute estimates that through 2027, the wellness economy will make up 6. 6% of global GDP, or $8. 5 trillion. The top leaders in smart wellness expansion projected through 2027 are wellness real estate [17. 4 percent annually] followed by wellness tourism [16. 6 percent annually]. The global wellness tourism sector is also projected to expand at a compound annual growth rate [CAGR] of 12. 42% between 2023 and 2030. The growing awareness of fitness and wellness among travelers will inspire health care providers. hotels to introduce a wider diversity of experiences: some activities. More left frame than others. My only recommendation would be to not mix psychedelics with homicide mystery retreats. Hey.
J is for Joint ventures
K is for KPIs
Benchmarking KPIs have moved from RevPAR [profit consistent with available space] to TRevPAR [total profit consistent with available space] or GOPPAM [gross or consistent with profit source compatible with available meter]. For consistent residential installations and other hybrid hosting concepts, offering new offerings on the bulk of room revenue is having a significant effect on classic profit models and KPIs. Plus coworking spaces, pop-up shops, activity studios, and more. Flexible living features are also multiplying, with short- and long-term visitors staying under one roof. As a result, asset control systems will want to evolve towards greater help and management of various profit streams. New regulatory pressures to measure and disclose ESG knowledge are causing some headaches. Lately there is no agreement on which KPIs or consistent indicators deserve to be monitored, or which net carbon/carbon relief frameworks to follow. Organizations such as the Sustainable Hospitality Alliance, Energy
L is for work
For the letter ‘L’, we have the homonym Labour, in reference to both the UK political party as well as the workforce. 2024 marks a big year for global elections. The UK General Election is expected to take place in the second half of this year, with November floated as the most likely month. The latest YouGov voting intention poll [at the time of writing] shows Labour and Conservatives receiving 47 per cent and 20 per cent share respectively. Should Labour come to power in 2025, its manifesto highlights some policies which will be of benefit to the hospitality sector, including the provision and availability of childcare, as well as a planned review of business taxes to include the industry. On the flip side, a ban on zero-hour contracts would be problematic for many employers. Regarding the workforce, figures from the Office for National Statistics show there were 112,000 vacancies in hospitality at the end of 2023, down from 147,000 at the same time in 2022. Current vacancies remain far higher than pre-pandemic levels, when there were 89,000. UKHospitality is campaigning for a reform of the Apprenticeship Levy, such as freeing up funds to be used for non-apprenticeship training and a modular approach for learners who can build towards an apprenticeship. By offering employers further support to enhance their skills and development offering, it may encourage more bodies to enter the industry and fill much-needed roles. EH.
Maslow Capital has effectively provided Yari Investments with an £18. 1m progressive loan for the structure of a co-living allocation in Feltham, south-west London. Rachel Gordon, Head of Transaction Execution at Maslow Capital, said: “This allocation exemplifies Maslow Capital’s strategic commitment to helping progress high-quality, cutting-edge housing solutions in the UK. The use of modular structure techniques In this task it not only allows for a faster and more effective structure, but also allows our borrower to achieve more environmentally friendly progress. We are happy to help use those cutting-edge strategies and they will play a key role in the future. GS .
N is for NUMA
In a challenging economic environment and a fragmented asset control landscape where operators are forced to lay off staff or reduce units, NUMA stands out for its competitive expansion strategy. In the last year alone, the Berlin-based hotel platform, which focuses on hotels and retail housing in major European cities, has achieved notable milestones, adding more than €1. 5 billion in assets under control [more than 5,200 units] and raising $59. million dollars in expansion equity through a Series C investment round. NUMA loudly declares its USP: it can attract tourists and businessmen as classic hotel chains struggle to adapt to new customer habits and platforms Short-term rentals face increasingly strict urban regulations across the continent. The company’s acquisition of Dutch competitor YAYS in November is a sign of things to come in 2024 as well. By leveraging investment in its technology and focusing on improving the experience, NUMA is strengthening its reputation as a dominant player in Europe and positioning itself to expansion into attractive key markets such as Amsterdam and Paris. P. S.
Or it’s for the Olympics
The hosts will await the Paris 2024 Olympic and Paralympic Games with as much anticipation as the sports enthusiasts themselves who are lucky enough to purchase tickets. As an official component of the Games, Airbnb is preparing to host up to one million potential climbers in the French capital and other territories hosting the Games, while the Paris Tourist Office expects around 16 million climbers to do so. stopover in the Paris region on those dates. of the Olympic and Paralympic Games. Indeed, accommodation demand from July to September will be almost unprecedented and will place significant pressure on the transportation, housing and hospitality markets as supplies struggle to keep up, prompting Airbnb CEO Brian Chesky to plead to Parisians to welcome the stopover organizers at the Games. Despite this fervor, the sporting spectacle [and Airbnb sponsorship] is at odds with the French government’s attempt to regulate short-term rental operations in the country’s cities and align their costs with those of other accommodation providers. . Anne Hidalgo, mayor of Paris since 2014, announced her goal of organizing a referendum on the activities of Airbnb and other platforms in the capital in 2020 as part of her post-Covid recovery strategy, and her position has not weakened since then. . P. S.
P is for population
Rising and falling populations have significant impacts on the real estate and hospitality / travel sectors. In the UK, which is facing an acute shortage of labour, the population could reach nearly 74 million by 2036 with net migration fuelling the rise, figures suggest. The Office for National Statistics [ONS] projects that the population will increase by 6.6 million people [9.9 per cent] between 2021 and 2036. This includes a net migration of 6.1 million people and about 500,000 more births than deaths. The rise in net migration could help top ease the recruitment issue which was severely exacerbated by a loss of EU workers post-Brexit. The ONS numbers say there could be an additional one million people aged 85 and over in the UK by 2036. This is going to necessitate a series rise in output for the senior living sector, which is already has an undersupply of more than 600,000 units, according to CBRE. Andrew Surgenor, senior director, operational real estate at CBRE, said: “It’s evident that there is a need to amplify the choice and quality of housing available to this cohort of the population. Developers can address this with increased tenures, including rental and affordable tenure, unlocking potential for a more diverse, accessible offering.”
In other parts of the world, demographic expansion (and the resulting burgeoning middle class) means large numbers of people are traveling for the first time. The middle class is the fastest developing primary segment of India’s population, both in percentage and absolute terms. Overall, it grew by 6. 3% per year between 1995 and 2021. It now represents 31% of the population and is expected to grow 38% until 2031 and 60% until 2047. More than a billion Indians will make up the middle class. when India celebrates one hundred years of independence in 2047. GS.
Q is for fast
In an age of instant gratification, fuelled by the rapid pace of technological advancements and the convenience of online shopping, travellers’ demands and needs have undergone a transformative shift. The rise of e-commerce giants such as Amazon has played a pivotal role in shaping consumer expectations, extending beyond the realm of retail and influencing the way individuals approach travel; speed and efficiency are now integral components of the overall traveller experience. As a result, travel service providers have adapted and streamlined processes to meet these evolving expectations. The knock-on effect is a landscape where travellers come to expect quick booking procedures, rapid responses to queries, instant check-ins, and hassle-free experiences such as contactless payments. The fast-paced nature of the modern world is also well captured in the meteoric rise of TikTok. Bite-sized videos have become a powerful tool for aspirational travel, and marketers are now leveraging the engaging nature of short-form videos to showcase destination highlights and hotel amenities, as well as share user-generated content in a visually compelling format. Simply to prove a case in point as to how quick our daily lives are becoming, this entire section was written by ChatGPT. EH.
S is for Saudi Arabia
T is for taxes
It is said that nothing in this world is certain unless death and taxes are one of the hot topics of verbal exchange and tourism in 2024. Nowhere will this be more prevalent than in Europe, where destinations such as Venice, Paris, Amsterdam, Valencia, Barcelona, Madrid, Olhao, Faro and Figueira de Foz are preparing to introduce new tourist taxes this year. While the law would likely range between regional and municipal taxes, cities are contemplating the opportunity to crack down on noisy and anti-social behavior, fund municipal innovations and services, and discourage mass tourism, while charging visitors a small fee for the duration of their stay. Meanwhile, Her Majesty’s Department of Finance and Customs in the U. K. is tightening its grip on tax evasion by requiring platforms like Airbnb to collect and percentage the main points of hosts who make at least 30 transactions a year from online side activities such as short-term rentals.
The hype around web3 seems to have disappeared from public discourse, however its impact on the hospitality and living sectors should not be overlooked. I’d argue that virtual or augmented reality experiences are the most popular applications of web3 currently, providing operators the opportunity to showcase properties, plan meetings and events and more. Many brands have also entered the metaverse which has supported sales and marketing strategies as well as recruitment. I won’t pretend that I know a huge deal about blockchain technology which powers the web3 model. I understand it will help businesses to securely store and manage data without the need for third-parties, which given the reliance on external partners to carry out bookings and transactions, could only be of benefit to the hospitality and living sectors. Applications include automated contracts for tenants, secure identity checks, and personalised loyalty programs. Blockchain technology could effectively reduce fees paid to third-parties, and when paired with AI could provide analysis of customer data to inform offers and rewards. EH.
X is for X
Since Twitter was bought by Elon Musk [CEO of Tesla and SpaceX] in October 2022 and rebranded as X last April, the platform has rarely been out of the news – as much for Musk’s high-profile antics as the bugs and outages on the site itself. Musk’s arrival promises to take X in a new direction, broadening out from its social networking and journalistic functions into his vision for an “everything” app, where users could eventually communicate, shop, consume entertainment and “live” all on one app. Interestingly, Musk originally created X.com in 1999 to become an all-in-one financial platform, which would later go on to rebrand as PayPal. The billionaire businessman is nothing short of ambitious and it would be no surprise to see X venture into the travel and hospitality space if it can attract new demographics to the third-biggest social media network worldwide. His forthright opinions on the app, however, have caused widespread controversy. Online travel agencies Airbnb and Expedia suspended their advertising on X after Musk was accused of antisemitism for a critical tweet about Jewish communities, while non-profit group Media Matters alleged that its adverts were appearing alongside pro-Nazi content and hate speech. Apple, Uber, Microsoft and Coca-Cola all pulled their ads too, leaving X with an uncertain future despite its overarching ambitions. PS.
Y is for Y Combinator
2023 has been a brutal year for tech corporations in the travel, hospitality, and real estate industries, for a number of reasons. Overhiring, a lack of protection against shocks to the economy and market volatility, and a desire to improve technological power are just some of the reasons attributed to the announced wave of start-up layoffs over the past year. Given this, it is desirable that access to Y Combinator, the Silicon Valley technology startup accelerator, is the most competitive in history with 44,000 programs won this year, according to Bloomberg. On the other hand, Y Combinator’s summer cohort acceptance was less than 1%, the lowest in the incubator’s history. As Y Combinator CEO Garry Tan explains, job cuts at big tech corporations have “freed up” other people to work at large new corporations and “small techs” can still thrive in a turbulent economy. Although efficiencies can be achieved and inventions such as AI will be adopted, marketers will be looking for the next industry-defining solution. PD.