The travel economy is increasingly disconnected from broader economic conditions, operating as “almost a separate component than the overall general economy,” according to Glenn Haussman, host of No Vacancy and veteran hospitality industry analyst.
Shifting Consumer Priorities
Haussman argues that a fundamental shift in American consumer behavior is driving this decoupling. “Since the great recession in 2008-2009, that kind of moved us more from focusing on materialism and things into experiences. And I think right now we’re really starting to see that blossom,” he says.
This prioritization of experiences over possessions appears particularly pronounced in travel decisions. “Americans feel that it’s a right to travel,” Haussman observes, noting that consumers are increasingly choosing experiences over material purchases. “They’d rather go to a concert in another city” than “buy that $20 cheap thing from a foreign country that doesn’t really mean anything.”
Technology-Enabled Profitability
Hotels are adapting their business models to capitalize on this shift, Haussman says. Rather than focusing solely on room rates, operators are “moving into utilizing technology into being able to get closer to that customer, and be able to create experiences and pricing behind those experiences.”
This approach represents a significant evolution in hotel economics. “Instead of focusing on how much they’re charging per room,” Haussman explains, operators are emphasizing “profitability per customer or per group, rather than a revenue per available room kind of metrics.”
Market Uncertainty vs. Travel Demand
While acknowledging broader economic uncertainties, including political factors, Haussman’s outlook has become increasingly optimistic. “A few months ago, I was extremely concerned about the hospitality economy because of the uncertainty there. However, over the last few months of talking to people, I realized that maybe I was being a little too pessimistic.”
The rise of digital nomads and changing work patterns are further supporting this resilience, suggesting structural changes in how Americans view and prioritize travel spending.
Solutions and Industry Response
Haussman suggests hoteliers are adapting their strategies to this new reality. “Hoteliers are smart to be able to leverage that, and they’re moving in a direction that is going to help them be more profitable,” he says.
The key, according to Haussman, lies in understanding and capitalizing on the experience economy through technology integration and personalized service offerings. As the industry continues to evolve, this focus on experiences over traditional metrics may become increasingly central to hospitality success.
