It’s time for business and international intentions to support overall travel after domestic (especially leisure) trips buoyed the sector for much of last year, according to Marcus & Millichap’s 2023 Hospitality National Investment Forecast.
More than three-fourths of travel managers interviewed in a recent survey anticipated their companies will increase business trips this year.
Inbound international tourism is positioned to elevate even further in 2023, highlighted by easing travel restrictions from China and Japan and national leisure travel should crest after hitting its third-highest total on record.
“Generally higher airfare, fuel costs, and room rates weigh on the travel budgets of many households, while reopening international destinations may draw away some more affluent travelers,” according to the report, as consumers battle inflation and face near-term economic uncertainty.
Consider that as of November 2022, the personal savings rate was 2.4% — near a historical low.
A Drive Toward Cost-Effective Vacation Markets
Larger gateway metros, including New York City, Washington, D.C., Seattle-Tacoma, Los Angeles, and San Francisco, should drive travel this year as they were hardest hit in recent years and also are central to many businesses.
Marcus & Millichap suggest that more “cost-effective” vacations could come to smaller leisure destinations, such as Charleston, Napa Valley, Northeast Savannah, and Sedona.
Hotel developer confidence is up as construction activity accelerates for 2023. Deliveries for this year are expected to exceed the long-term average by more than 23,000 rooms, with completions most pronounced in larger markets, such as Dallas-Fort Worth, New York City, Las Vegas, Phoenix, and Atlanta, according to the report.
If a march back to the office ever truly sets in, Marcus & Millichap suggests that could boost business travel, including greater attendance at conventions and trade shows.