The US market in 2023 – industry and traveller trends

During Click. 2023 in Miami,  Booking.com leaders and travel industry professionals shared their 2022 insights, and their 2023 predictions for the US market. Here we unpack some of the highlights.

Domestic tourism in the US is back 

2022 was Booking Holdings biggest ever year, delivering almost 900m room nights across its platforms – a 6% increase over 2019 (our previous biggest year).

In the US specifically, the increase was 30%. While partly driven by the strength of other US brands within the Booking Holdings portfolio, this also reflects the impact of investment Booking.com has been making in the region – from brand marketing to product development. In fact, our research has shown that top-of-mind awareness for Booking.com in the US was up 50% in the second half of 2022 compared with the year before.

Combine that with recent investments in ads during the Big Game and the Oscars and that brand awareness is likely to grow even further in the coming year.

This increased brand awareness brings new audiences and greater demand, helping your property reach more people than ever. Offering US State Rates can help you tap into this demand, as well as making the most of sponsored ads to target additional occupancy needs.

Inbound tourism is also recovering

Jamie Lane, Chief Economist at AirDNA – referencing data around the short-term rental market – noted that other areas showed a lag in terms of recovery behind the US. He said that while the US was ‘fully recovered’ in terms of demand by April 2021, other regions including Europe didn’t follow until a year later, and some regions including Asia and Oceania have yet to reach pre-2019 levels.

But as demand in these regions returns, it seems to be bringing with it greater demand for US destinations. 

Our own data shows that this recovery is already translating into bookings. In particular, Q4 saw a strong increase in US travel from Europe, with Europe to US travel bookings more than doubling year on year. Some places (such as the UK and Germany) saw bookings to the US increase more than 150%.

Currently, the top six inbound sources for the US are: the UK, Germany, Canada, France, Brazil and Mexico.

Inbound tourists tend to stay longer and spend more – our research showing as much as 90% more – than domestic travellers, so this recovery indicates strong times ahead as international travel recovers. You can make the most of this trend by using Country Rates to attract more of these high-value travellers.

Our data also shows that guests travelling abroad favour accommodation with breakfast included, so adding a breakfast-included rate could help you attract more international guests in a simple, cost-effective way. You can also use our Genius programme’s free breakfast offer to capture more interest and help your property stand out.

Average daily rates are up

Average daily rates are up, in many cases significantly.

Jan D. Freitag, National Director of Hospitality Analytics at CoStar Group, shared data on hotel average daily rate (ADR) increases in different regions, noting that Northern Africa has seen the biggest increase, with prices at 173% compared with 2019. North America was at 118%, roughly equal with Europe at 122%.

Of course, much of this increase has been driven by inflation and increased costs, but as we discovered earlier, demand hasn’t fallen even in spite of these price increases. This goes counter to most expectations around price elasticity of demand, and could make for some interesting dynamics once the inflationary pressures start to ease.

Flexibility still matters

Even as markets are ‘recovered’, the flexibility that was available during the pandemic continues to be paramount for many travellers.

The good news is that offering flexibility doesn’t have to be at your own cost. In fact, we saw that cancellations were down by more than 25% last year compared with 2019.

There’s also growing flexibility in how people look for options, with our data showing that just over 45% of room nights were booked via our app in Q1 this year. Offering Mobile Rates can be a good way of capturing this demand.

The macroeconomic landscape is unclear – but there are reasons to be optimistic 

Many of the speakers highlighted talking points from the wider macroeconomic and geopolitical landscape. There’s inflation, the risk of recession, difficult labour markets and banking collapses that could have repercussions.

But one consistent point across the speakers was that, while it’s impossible to know exactly what the future holds, the data seems to suggest that the US travel and hospitality industry is well placed to remain consistent.

After all, if the past few years show anything, it’s that we’re a resilient industry.