Hotel Industry Trends to Look Out for in 2023 and Beyond 

February 20, 2023

Following an incredibly challenging period of unprecedented, pandemic-inflicted hardships, the hotel industry is making promising strides toward recovery. According to the American Hotel & Lodging Association’s 2023 State of the Hotel Industry Report, this resilient industry is projected to surpass pre-pandemic levels of demand, nominal room revenue and state and local tax revenue this year, while moving closer to other key 2019 performance metrics. However, with economic concerns such as inflation and borrowing costs, and operational challenges such as staffing shortages rising to the forefront as top concerns for hoteliers, the industry may not achieve full recovery for several more years. 

Despite these pesky headwinds, the future is looking brighter for hotels when it comes to meetings and conventions, with hotel properties across the globe enthusiastically welcoming back event groups eager to meet face-to-face. 

To dive a little deeper into the state of the hotel industry in 2023, TSNN had a chance to sit down with Michael Dominguez, president and CEO of Associated Luxury Hotels International (AHLI), a member-based, global sales organization for independent hotels and independent hotel brands in the luxury meetings, incentives, conventions and exhibitions space, to get his thoughts about the biggest hotel trends we can expect to see this year and beyond. 

What are the biggest hotel industry trends you’re seeing in 2023?

There is a perfect collision in our industry of the need for so many to get together face to face after the past two years, with the reality of inflation being evident in all areas of our lives, including travel and specifically labor as well as food and beverage. Navigating through the need for budget alignments, many of which have not really been changed since 2019, has become a consistent conversation with our planner community. It really is a question of recession or no recession? Slowdown and or decline? How long and how deep?   

In many cases, we have seen an overcorrection in virtual and hybrid opportunities with 2023 meetings specifically, in the fact that groups are doing very little, or none at all. With a pent-up need to bring teams together to build on corporate cultural adhesion, the fatigue of a completely virtual environment is causing this overcorrection. Add to the decision process the increased cost environment, and in many cases, this may not be a feasible option until budgets reset for 2024. 

Also, there remains a very compressed environment for meeting space, specifically in North American resort communities. This compression is now bled out to early 2024 and we are experiencing many “new” meetings that are being sourced for 2023. 

How will these trends impact business events, and what should event planners keep in mind?

We are seeing planners looking at cost savings in a variety of ways. The American Express M&E Report for 2023 showed a focus on savings from off-site activities and/or events as a change that has significant budget impact without a critical impact on the experiential objectives of the meeting. It is important for planners to begin searches for 2024 and 2025 to at least get their meetings and needs on their hotel partner’s radar.            

Which of these trends do you see sticking around for a while and why?

The economic considerations will be around for some time. Although the rate of growth is slowing down, there is nothing in the forecast for rates to move backwards, and it is almost impossible for that to happen due to increased costs. Inflation in the service sector will stick, as much of the inflation is permanent due to increased wages that will be permanent. Compression will continue to be the issue at least over the next 24 months, as there is no real relief in sight with new supply to the meetings market.

In relation to this, what trends are you seeing in planner behavior when it comes to how they’re approaching the different aspects of a typical meeting or conference? 

In many cases, we are seeing a strong consideration of keeping off-site events and dinners on-property, as it is a savings [in relation] to transportation and utilizing different aspects of a hotel/resort. We have seen many unique spaces, indoor and outdoor spaces, on location being used. We’re also seeing a heavy reception-style approach to at least one night of dinners. These themed opportunities can enhance rather than take away from the experience. 

Are there any trends that you see coming down the pipeline soon and how do you think they’ll impact the hotel industry and by extension, corporate events?

The maturity around hotel debt in a rate environment that has increased five times will continue to put pressure on hotel performance for hotel operators. The ability to flex in certain cost areas will continue to have a great deal of scrutiny. On that same note, with a 32% increase in basic building materials since 2019, and again, an increased rate environment, new projects will be viewed with an extremely critical eye. 

There are some risks with a global realignment in regard to trading partners, economies and the drumbeat of a more nationalized approach to countries versus the global mindset we had seen for the last decade. What this means to global travel and meetings is yet to be completely understood. 

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Partner Voices
Less than six months ago, Lisa Messina joined the Las Vegas Convention and Visitors Authority (LVCVA) as the first-ever chief sales officer after leading the sales team at Caesars Entertainment. A 12-year Las Vegas resident, Messina is a graduate of Cornell University’s School of Hotel Administration and serves on MPI International’s board of directors. TSNN had a chance to catch up with this dynamic leader and talk to her about her vision for the new role, current shifts in the trade show industry, creating more diversity and equity within the organization, and advice to future female leaders. Lisa Messina, Chief Sales Officer, LVCVA With Las Vegas becoming The Greatest Arena on EarthTM, what are some of the things you’re most excited about in your role? Our team was at The Big Game’s handoff ceremony earlier this month, and I couldn’t help but think, “We’re going to crush it next year!”  These high-profile events and venues not only drive excitement, but also provide unmatched opportunities for event planners. Allegiant Stadium hosts events from 10 to 65,000 people and offers on-field experiences. Formula 1 Grand Prix will take place in Las Vegas in November, after the year-one F1 race, the four-story paddock building will be available for buyouts and will also offer daily ride-along experiences that will be available for groups. And, of course, the MSG Sphere officially announced that it will open in September, ahead of schedule, with a U2 residency. It’s going to be the most technologically advanced venue as far as lighting, sound, feel, and even scent, and it will be available for buyouts and next-level sponsorships inside and outside. There’s no ceiling to what you can do when you’re doing events in Las Vegas.  Allegiant Stadium As the trade show and convention business returns to the pre-pandemic levels, what shifts are you noticing and how do you think they will impact the industry going forward? Our trade show organizers are very focused on driving customer experience. Most of our organizers are reporting stronger exhibitor numbers and increased numbers of new exhibitors, with trade shows proving to be almost or above 2019 levels. Now our organizers are really doubling down on driving attendance and focusing on the data to provide that individualized, customized experience to help attendees meet their goals and get the best value. Some companies continue to be cautiously optimistic with their organizational spend when it comes to sending attendees, but I think it will continue to improve. As the U.S. Travel Association makes more progress on the U.S. visa situation, we also expect a growing influx of international attendees. What are some innovative ways the LVCVA helps trade show and convention organizers deliver the most value for their events? We focus on customer experience in the same way that trade show organizers are thinking about it. We got rave reviews with the West Hall Expansion of the Las Vegas Convention Center (LVCC), so over the next two years, we will be renovating the North and the Central halls, which will include not just the same look and feel, but also the digital experiences that can be leveraged for branding and sponsorship opportunities.  Vegas Loop, the underground transportation system designed by The Boring Company, is also a way we have enhanced the customer experience. Vegas Loop at the LVCC has transported more than 900,000 convention attendees across the campus since its 2021 launch. Last summer, Resorts World and The Boring Company opened the first resort stop at the Resorts World Las Vegas , with plans to expand throughout the resort corridor, including downtown Las Vegas, Allegiant Stadium and Harry Reid International Airport. The LVCVA also purchased the Las Vegas Monorail in 2020, the 3.9-mile-long elevated transportation system that connects eight resorts directly to the convention center campus. This is the only rail system in the world that integrates fares directly into show badges and registration. For trade show organizers, these transportation options mean saving time, money and effort when it comes to moving groups from the hotels to LVCC and around the city. Also, the more we can focus on building the infrastructure around the convention center, the more it supports the customer experience and ultimately supports our trade show organizers. Scheduled to debut in Q4, Fontainebleau Las Vegas will offer 3,700 hotel rooms and 550,000 square feet of meeting and convention space next to LVCC.  What are some of the plans for advancing DEI (diversity, equity and inclusion) within your organization? We’re currently partnering with instead of working with a leading consulting firm, to lay the foundation and create a solid DEI plan and be the leader when it comes to DEI initiatives. The heart of that journey with the consulting firm is also talking to our customers about their strategic approaches to DEI and driving innovation in this space.  What are your favorite ways to recharge? My husband and I have an RV and we’re outdoorsy people. So, while we have over 150,000 world-class hotel rooms and renowned restaurants right outside our doorstep, one of my favorite things to do is get out to Red Rock Canyon, the Valley of Fire, and Lake Mead. Five of the top national parks are within a three-hour drive from Las Vegas, so there’s a lot you can do. We love balancing the energy of Las Vegas with nature, and we’re noticing that a lot of attendees add activities off the Strip when they come here.  Valley of Fire What advice would you give to women following leadership paths in destination marketing? I think it’s about being laser-focused on what you want to accomplish; building a team around you that lifts you and helps you achieve your goals; and being humble and realizing that you do it as a group. No one gets this done alone. Thankfully, there are a lot of women in leadership in this organization, in our customers’ organizations, and in this city that we can be really proud of. We’re a formidable force that is making things happen.   This interview has been edited and condensed. This article is exclusively sponsored by the Las Vegas Convention & Visitors Authority. For more information, visit HERE.