Summer travel predictions for urban + non-urban operators
Luke Bujarski, co-founder of Extenteam, examines the latest labour market data and takes lessons from previous years of the pandemic to project travel trends and implications for rental operators in urban and non-urban markets.
This article reflects on the core findings from Extenteam’s recently published State of the U.S. Accommodations Workforce Report 2022 Predictions & Guidance.
Covid, Omicron and beyond
The American public has grown quite weary of how Covid has been managed up to now. The more extreme measures, e.g. wide-scale school and business closures, are likely to be off the table going forward.
Vaccination rates are high, and Omicron is milder pathogenically compared to previous variants. Certain virologists and epidemiologists have also ascertained that viruses tend to grow milder as they evolve from variant to variant.
2022 is also an election year.
Political stakeholders will be looking to find swift resolutions to the economic and social impacts that Covid has left in its wake. For example, federal, state and local efforts are now turning towards at-home testing as a core strategy in reducing infection rates.
Government stimulus also has a role to play.
Any further top-down efforts to reduce Covid infections will be unpopular with the democratic base, as financial support for small businesses and consumers [stimulus checks] have already been distributed.
All of this suggests that Covid will have less of a direct impact on the summer travel season.
What will change is who, how, and where people travel to.
Urban operators should prepare for an influx
Travel to red states and their municipal counterparts such as Austin, Miami, Nashville, and others will continue to gain momentum. Travel patterns typically follow migration patterns; these cities have experienced the biggest population gains before, during, and very likely in the years following the pandemic.
One should also not discount the big iconic cities, i.e. New York, Los Angeles, and Chicago. These are economic powerhouses and massive population centers. Those that fled or missed out during the pandemic could be looking to re-establish personal and professional ties going forward.
For the past two years, the main narrative has been “urban exodus”. Urban operators could see an influx of travel as the Covid effect wanes.
Cities remain at the heart of the American economy and culture; people are longing for museums, dining, shopping, and overall urban living. Urban operators should prepare accordingly.
The latest workforce data show a much more pronounced employment deficit and slower employment recovery in urban areas.
For example, Washington DC had 48 per cent fewer accommodations workers in November of 2021 compared to the same time in 2019 [pre-pandemic]. Nationally, the workforce deficit sat at 15 per cent.
Operators should expect wages in urban areas to go up. Competition for tourism dollars could also make it harder for operators to pass those costs on to the consumer.
The shift towards city travel will be significant and palpable, but more of a river rather than flash flood.
Travel to non-urban destinations will remain vibrant through 2022.
Americans are learning how to live with Covid; travel is fundamental to the American way of life. Furthermore, spring and summer will be busy for both urban and non-urban operators, as flu and Covid season wanes during the warmer months.
Beach and sun destinations might see certain shifts in travel demographics as demand starts to make its way back into the cities.
Those digital nomads that were looking for respite and isolation will begin to turn their eyes back to work and their professional networks in the big cities.
Non-urban operators could start to see a more familiar look to their guest base, i.e. retirees and families e.g. ageing millennials with children.
Pandemic winners and losers
The pandemic has impacted individuals in unique ways. Many have lost loved ones while others lost their economic livelihood. The economy certainly looks different. All signs point to a widening gap between rich and poor.
Price inflation is outpacing wage inflation. Those hit hardest economically are those working in lower-paying sectors. For others, particularly desk workers, the pandemic has been a financial windfall.
As a result, we predict a dovetail effect with budget travel picking up at a slower rate compared to mid- to high-end luxury travel.
These same economic forces will keep job quit rates and wage inflation high for rental operators. Wages in the accommodation subsector jumped by 20 per cent in December 2021 compared to the previous year. This is nearly four times the rate of the broader service sector.
All in all, the pandemic has changed the face of the accommodations industry. Operators will need to adapt to a new consumer base, as well as new workforce in 2022.
Luke Bujarski is the co-founder at Extenteam, a premier outsourcer for the property management professionals operating short-term rentals, vacation homes, multifamily communities and boutique hotels. Prior to Extenteam, he was research director for Skift and Phocuswright. He is also the co-founder at Chrystal Clinic, a local Chicago-based mind-body health centre offering traditional Chinese medicine, yoga, massage therapy and other modalities that promote natural healing.
This story was originally posted on 19 January 2022 on ShortTermRentalz.com
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