Marcus & Millichap also anticipates an increase in inbound international travel.
It’s time for business and international intentions to support travel in general after domestic travel propelled the sector for much of last year, according to Marcus & Millichap’s 2023 Domestic Hospitality Investment Forecast.
More than three quarters of travel managers interviewed in a recent survey anticipated that their companies will increase business travel this year.
International inbound tourism is set to rise further in 2023, highlighted by the easing of travel restrictions from China and Japan, and domestic leisure travel should peak after reaching its third-highest total on record.
“In general, higher airfares, fuel costs and room rates are weighing on the travel budgets of many households, while the reopening of international destinations may attract 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%, close to an all-time low.
A push towards profitable holiday markets
The largest gateway metropolitan areas, including New York City, Washington, D.C., Seattle-Tacoma, Los Angeles and San Francisco, should boost travel this year, as they have been hit the hardest in recent years and are also critical. for many companies.
Marcus & Millichap suggest that the most “cost-effective” vacations could come to smaller leisure destinations, such as Charleston, Napa Valley, Northeast Savannah and Sedona.
Hotel developer confidence is rising as construction activity accelerates to 2023. Deliveries for this year are expected to exceed the long-term average by more than 23,000 rooms, with completions steeper in larger markets such as Dallas-Fort Worth, New York City, Las Vegas, Phoenix and Atlanta, according to the report.
Marcus & Millichap suggests that if a march back to the office ever really starts, it could boost business travel, including increased attendance at conventions and trade shows.