Lifestyle hotels fuel demand as global occupancy nears pre-COVID levels

23 May 2023 – Growing demand for one of the most successful traveller offerings in recent years – lifestyle hotels – has fuelled the accommodation comeback as global occupancy rates in Q1-2023 neared pre-COVID levels, according to FCM Consulting’s latest Global Trends Report.

Innovative insights showed global hotel occupancy for the first quarter of the year was at 60.46 per cent, only four percentage points below the levels of 2019.

“Our clients are wanting unique travel experiences on their corporate trips, different to the norm and something that’s unique and special to the destination. Because of this, Lifestyle hotels have boomed in popularity,” said Keeley Alton, General Manager of Corporate Brands.

“Lifestyle hotels have features and amenities such as green initiatives, modern technology, more health and wellbeing choices, and art/culture designs that are specific to the region they are located in. Examples include Lyf Collingwood in Melbourne, or New York’s Hoxton.  

Q1-2023 saw all six regions surpass Q4-2022 Average Room Rates by 4-26 per cent. New

Zealand/Australia saw their rates increase 12 per cent. Meanwhile Asia went up 26 per cent, Middle East rising by 22 per cent, Europe up 19 per cent, Latin America increasing by 12 per cent,  and North America rising four per cent.

“Seeing all regions increase is actually quite different to the Q4-2022 quarter, where New Zealand/Australia and North America were the only two regions to have surpassed 2019 levels,” Alton said.

“The Q1-2023 Average Room Rate versus Q1-2022 was up four per cent as season-high demand pushed rates up by $17USD per night when compared to Q4-2022.

“The biggest rises came in Auckland and Wellington that saw increases of 27 per cent and 25 per cent respectively – with our Aussie counterparts behind with Melbourne (up 17 per cent) and Sydney (up 16 per cent).

“This shows that the demand for true value in flights and accommodation remains and the corporate traveller is willing to shop differently based on price and the value of service offering – opening up significant supplier changes in corporate travel programs across the globe.”