Professional Comment

Travel Spending Is On The Rise: How Can Hospitality Leaders Prepare?

By Eelco Van Collenburg, Executive Creative Director at Valtech (

According to the U.S. Travel Association, travel spending is expected to increase by 48% in 2023, compared to the 2020 pandemic-era low. And so far, this is proving to be true. Despite the ongoing cost of living crisis, Barclays reported a 66% increase in travel spending in January compared to the year before. So – be it a post-pandemic boom, sturdy recovery or simply changing spending habits – hospitality leaders need to prepare to cope with this surge in demand.

From airlines to hotels, customers today expect a unique yet easy experience when travelling and making bookings. To make this possible, the hospitality and travel sector will need to focus on digitalisation so they can deliver an online experience that compliments the physical one, before they reach their destination.

Personalising the experience
The way in which hospitality staff anticipate customer needs when interacting with them in-person varies, depending on the individual. So, why should this be any different online? Recognising this can generate an experience that feels tailor-made, with much more effective results.

Personalisation is an increasingly prevalent method in the hospitality sector to attract and retain customers. Not only can personalised customer engagement drive website traffic, but it can positively impact brand sentiment and loyalty with 65% of consumers agreeing.

Some hospitality brands have already seen success in adopting these practices. Luxury hotel chain Mandarin Oriental had the foresight to begin working on its website during the pandemic, predicting a rise in travel spending as restrictions were lifted.

By creating a more personalised digital experience, the brand recorded an increase in the average revenue per booking by more than 40%.

In order to prepare for this surge in spending, integrating a personalisation system is more important than ever. With this in place, hospitality brands can create a unified and unique experience across both physical and digital properties.

Is AI the future for travel?

Hospitality brands need to examine how their digital presence can fully maximise customer engagement. Recently, we’ve heard a lot about the use of AI and machine learning as a route for improving digital capabilities. AI-powered virtual assistants enable real-time customer support across websites, mobile apps, and social media, increasing client satisfaction with timely employee responses and assistance. AI-powered recommendation systems can also leverage customers’ search history, preferences, and activities supercharging personalisation efforts.

By giving sales teams access to these technologies – which can track consumer habits, behaviours, and preferences to produce targeted offers and promotions – hospitality brands can maximise engagement, whilst boosting satisfaction, loyalty, and overall revenue.

Of course, the turbulent economy has made some hospitality brands tentative to invest in expensive new technology. However, the outlook for the next year suggests an immediacy to act now when transforming their tech stack for better customer engagement. Mandarin Oriental had the foresight to invest in their online presence in the middle of the pandemic, which paid-off, creating a more engaging experience to greet the post-pandemic travel surge. Those who have already invested have seen an increase in engagement and booking value, not only preparing for the predicted surge, but maximising its potential.

Mobile-first travel

Most will agree that great hospitality revolves around meeting guests’ where they are. In the digital age, this is often on mobile. Up to 44% of online travel sales are made via mobile phones. So, in order to become more accessible, brands should focus on becoming ‘mobile-first’. Designing their website around mobile users makes the experience as easy as possible, removing the likelihood of provoking frustration from poorly formatted websites.

In the same way booking habits have changed, payment habits are also transforming. Digital payments and Buy Now Pay Later schemes are increasingly the norm, and a recent study carried out by McKinsey found that 15% of digital wallet users leave the house without a physical bank card. To avoid alienating customers, hospitality brands would benefit from encompassing mobile payment methods, to create a more streamlined system for customers booking travel and accommodation this year.

In the current economic landscape, hospitality brands must ensure that their customer experience is up to scratch to ensure that travellers feel as though they are spending their money in the right place. And frictionless experiences that meet customer expectations and demand will achieve this. By investing in digital capabilities, the hospitality sector can go from strength-to-strength.