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What We’re Expecting In 2023

Thankfully, we didn’t start 2020, 2021, or 2022 with any predictions for the year. The past three years have presented more unexpected situations than our pre-2020 selves would have thought fathomable. But this year? We’re making predictions.

1. Google Analytics 4

We’ve shared GA4 articles, social media posts, and newsletters, and have been talking to our clients nonstop about this transition. We know we might sound like a broken record, but we think this deserves attention. In fact, we set up most of our clients on GA4 by July 2022 – a full 12 months before the transition date. That way, we’ll have a full year of data before GA4 becomes the only Google Analytics in July 2023.

So what is the prediction?

Could it be that the switchover deadline gets postponed to allow more time for product improvements and adoption? There has after all been some dissatisfaction with elements of GA4.

We wouldn’t put money on it, but we still expect a whole host of changes to continue coming from Google in the run-up to July and thereafter. It seems as though the vast majority of people just aren’t ready to say goodbye to Universal Analytics and migrate all processes to GA4. Many ecommerce platforms like Shopify and booking engines like Windsurfer haven’t released their updates for GA4 yet.

Our advice remains the same, if you’re not ready for GA4, send us an email, and we’ll sort it ASAP. If you are ready, stay on the lookout, as we expect more analytics adjustments will be needed this year.

2. The Significance of Phone Revenue

In 2022, many of our clients recorded an increase in phone calls. If we take a look at an example search, “hilton phone number” we can see the increase in search volume in 2022 versus the past five years.

Search trends for hilton phone number on mobile devices

Search trends for hilton phone number on desktop

Society has become more digitally minded; however, one side effect of that is reduced patience. We want things now. And when we want things now, submitting a form, or sending an email and waiting for a response often doesn’t suffice. So many people will pick up the trusty phone. There’s also the issue of trust and the fact that speaking to a person can instill more confidence. After a few years of travel being not-so-straightforward during the pandemic, some people need the confidence boost of having some kind of human interaction before making a booking.

For several properties, a significant proportion of bookings are made through the phone. If a person engages with a media campaign and then makes a booking through the phone without some kind of call-tracking software or NAVIS, it is impossible to understand the true ROAS of the media campaign. If you don’t have call tracking set up on your website, or from your ad campaigns, we highly recommend it (and we can of course help you with the implementation). Many of our clients use NAVIS, which has been instrumental in understanding the revenue that comes through phone calls.

3. TikTok Advertising

TikTok has dominated the social media space for several years now, but when it comes to advertising, it’s still a long way off Meta. However, we expect that to change this year.

We know that the primary demographic of TikTok is not the primary demographic of many hotels and resorts, especially in the luxury space that most of our clients sit in. However, Skift reported that 34% of travellers were influenced by TikTok in 2022. Over a fifth of Wallop’s digital marketing clients have TikTok advertising in their 2023 plans and we expect that to grow.

Meta and Google as advertising platforms are becoming more expensive, limiting their targeting options, and reducing customer and technical support and let’s not forget that the US Justice Department are suing Google. So we expect to see more people moving media budgets to alternative platforms like TikTok in 2023.

4. Recession

We can’t talk about 2023 and not address the global financial situation. Many countries saw record inflation, various tech giants have seen layoffs, and the housing market is appearing to slow in several locations.

Markets will continue to be turbulent and we have to expect that our industry will not be immune from the consequences. As discussed in our 2022 year-in-review article, many properties saw a decline in numbers vs 2021, especially towards the end of the year. For properties with a lower Average Daily Rate (ADR), their target market may already be impacted. For those with a higher ADR, the slowdown is likely attributed to their target market being more cautious due to concerns about their future financial stability.

That being said, this decline has so far been minimal. Canada, which saw a much slower recovery since the pandemic began than the United States, had a particularly strong November according to STR, with increases in occupancy, ADR, and RevPAR versus 2019.

So, what is the bottom line? So far, it seems the fear of what could come is stronger than what is actually happening in the industry. While we do expect a turbulent year financially, the pandemic did show us that when tough times hit, travel remains, It is a privilege to be able to travel, and we expect those who can will continue to prioritize travel no matter what happens in the markets.

The projections for the year support this prediction. STR President Amanda Hite recently said, “Gains are slowing, however, with inflation rising at a faster rate than ADR. Demand continues to trend at record levels with continued strength in the leisure segment as well as a substantial return in group business”.

5. Staffing

As we navigate this recession, staffing is only getting more complex. If occupancy or inquiries slow, and hiring gets deprioritized, this could have implications further down the line when demand increases again.

Everyone in the industry knows this too well. Three years post-pandemic and hiring is still a key challenge. Eight months ago an OTA Insight poll found that 64% of hoteliers said that hiring and retention was their biggest challenge. More so than market conditions, pricing strategies, or tech and backend operations. Six months ago, the same poll uncovered that 57% believed hiring was their biggest challenge.

This aligns with data from the U.S. Bureau of Labor Statistics, showing that employment rates have grown and suggesting the challenge of hiring has lessened. However, the number of open jobs in hospitality has doubled, or in some cases tripled, since 2019.

Unfortunately, we expect there to be some tough conversations to determine the viability of keeping or retaining staff if occupancy and ADR fall as a result of any further market turbulence.

Finally, some other notable mentions for 2023:

– First-party data has to become integral to any digital strategy: not limited to hotels and resorts, but any business.
– Corporate travel has been growing steadily and another OTA Insight poll concluded that the majority of people are predicting corporate travel to return to pre-pandemic levels this summer and fall.
– International travel has grown substantially over the past couple of years and we expect that to continue in 2023. Whether we can still call this “revenge travel” or whether people are just wanting to travel internationally is irrelevant. Planning for an increase in international guests is a must.

Got any expectations for 2023 that we’ve missed? We’d love to hear them.