Precarious predictions for the global economy
Precarious predictions for the global economy
05 JANUARY 2015 7:22 AM
It took a little bit of goading, but four hotel industry experts finally supplied their take on how the global macroeconomic environment will look for hotels in 2020.
The hotel industry environment of 2020 will no doubt change during the next five years, but in some ways it will also stay the same, according to sources.
The predictions for 2020 were varied among the four experts to whom Hotel News Now posed the question: “What will the macroeconomic environment look like for hotels in 2020?”
Their responses ranged from the belief that disruptors such as sharing economy companies will continue to, well, disrupt the industry, to a significant increase in the amount of global tourism.
Listed below are the thoughts HNN’s cadre of sources had on the subject. Feel free to chime in with your own thoughts in the comments section below.
  • The hotel business has always been an industry that has seen a lot of change. That’s still going to be the case five years from now.
  • The millennial traveler will continue to send shockwaves across the industry, and the hotels of five years from now will all feel like independents, even if they’re branded. “When someone is traveling to Nashville, they want to feel like they’re in Nashville,” he said. “When they’re going to L.A., they want to feel like they’re in L.A.”
  • Disruptors will continue to be a big factor in the industry during the next five years.
  • Without saying what the overall economic condition might be, Merkel said the industry appears poised to continue to be in a good position in 2020.
  • International travel will be a big influence in 2020, Hartwich said. Developing nations will continue to develop, and outbound travel from these countries will continue to catch up to the United States.
  • It’s unclear what will happen with China. Some believe the country is on the verge of a real estate bubble that is about to pop. If that happens, it will have a major impact on international travel numbers in 2020.
  • He said it will be interesting to see what happens to Airbnb and other sharing economy companies during the next five years. “By then, we will have a great viewpoint on what that company means for the hotel industry, and I don’t think right now that anybody knows,” he said.
  • Echoing Merkel’s comments, Hartwich said there likely will be a proliferation of experiential hotels. “If you have a unique hotel with unique offerings, you can exercise pricing power,” he said. “With an average Courtyard, it’s harder to push rate too far from the competition.”
  • Millennials will be a key demographic in 2020. In the Americas, the Latin American traveler will be driving a lot of demand for hotels, Freitag said.
  • There will be many more “transparent travelers” in 2020. That is, those travelers who are willing to give up information about themselves in order to make travel easier. “TSA and Global Entry are the first signs of that,” he said.
  • Long-haul aircraft will continue to improve, and airlines will focus more on point-to-point markets, such as Southwest Airlines does with its model. The hub-and-spoke system will not be as big of a focus.
  • Using the term “downturn” to describe the hotel industry in 2020 might be a tad too strong, he said. “If there are no demand shocks, it’s going to be a soft landing,” he said.
  • Asia will continue to gather momentum, while there will be “pockets” of strength in Africa. Europe and America will be “cruising along” while Germany will be a “powerhouse.”

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