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Consumer Trends: 2025

📚 Dan Frommer shares a 107-slide presentation on the new consumer economy, including the success of TikTok Shop, the reality of Dry January, and Gen. Z's beauty brand loyalty. Data from a survey of over 3,000 US consumers, in collaboration with Coefficient Capital and Toluna, are highlighted. New Consumer memberships offer in-depth analysis via newsletters and podcasts, with free account signup or paid subscriptions at $200/year and $20/month.
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Increase guest engagement with advanced marketing technology

💸 On Dec 11, 2024, it was emphasized that integrating a CRM, loyalty, and feedback tools is vital for enhancing guest experience. Hotels must engage with guests across various platforms like social media, email, and apps to ensure consistent and personalized experiences. Testing different marketing, pricing, and loyalty strategies is recommended to boost guest engagement. Employing modern technology and focusing on personalization are crucial for staying competitive and increasing guest satisfaction. Full insights at Shiji.
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IATA projects 2025 airline revenues to exceed $1 trillion

✈ In 2025, passenger numbers are set to hit 5.2 billion, marking a 6.7% increase from 2024. Airline industry revenue is anticipated to surpass $1 trillion for the first time, growing 4.4% year over year. The IATA report from December 11, 2024, highlights the airline industry's strategic significance, contributing nearly 1% to the global economy. With $940 billion in costs, the industry's expected net profit margin is slim at 3.6%, averaging a profit of only $7 per passenger.
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Google’s search dominance in travel faces new challenges

📈 eMarketer forecasts Google's U.S. search ad market share will drop below 50% by 2025. TikTok challenges Google in travel advertising, even amid a potential U.S. ban. OpenAI's SearchGPT, providing real-time updates and planning to include ads, may shift travel discovery queries away from Google, affecting its travel ad network starting next year, according to Thomas Reiner of Altimeter Capital.
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Extreme weather already changing travel plans

🌀 Nearly 29% of global travelers avoided destinations due to extreme weather concerns in the past year, reveals a report by WTM Global and Tourism Economics. Gen Z (18-34) is particularly cautious, with 43% dodging such areas. Thailand is expected to lose 55 days of sunshine, while Canada might gain 23 days. The changes are attributed to human-induced climate change, expected to increase the frequency of extreme weather events. (Published on Dec 11, 2024)
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Hotels expand beyond traditional room sales

🏨 On Dec 11, 2024, hotels are innovating their booking systems with personalized interactive tools like 3D maps, increasing profits and reducing dependence on travel agencies. Wyndham uses cloud tech for early check-ins, adding thousands in revenue per property. IHG upsells room features, boosting their earnings. Marriott adopts dynamic pricing for various services, aspiring to be a "travel retailer.
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The soft power of quiet luxury

📍 In 2024, affluent travelers are shifting from ostentatious luxury to seeking understated luxury that prioritizes personalization and emotional connections. Post-luxury travelers choose authentic experiences over status symbols, with owner-operated hotels gaining popularity for their unique identity and genuine sense of place. Full details on Skift (subscription required).
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The future of hotel PMS

🏨 Hospitality Show in San Antonio on Dec 10, 2024, highlighted hoteliers' shift towards advanced property management systems. Key benefits include: streamlined operations, elimination of data silos, reduced maintenance costs through cloud-based platforms, time savings from automation and guest-facing tools for tasks like kiosk check-ins, and the transformation of guest data into actionable insights for personalization and revenue enhancement.
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STR: Second-highest Thanksgiving week demand on record

📈 On Dec 10, 2024, a report highlighted the impact of Thanksgiving's shift from the third to fourth week of November, with an 8.8% RevPAR increase over the two weeks. Thanksgiving week saw the second highest demand since 2021, with 50% occupancy, surpassing last year's 49.4%, and a 2.8% year-on-year room demand hike. Record-breaking nominal ADR and RevPAR were noted for the holiday. Upscale hotels had the highest occupancy at 58.9%, with upper midscale following at 57.6%, resulting in a 4.3% and 5% RevPAR growth for these categories, respectively.
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When pricing gets personal

💸 On Dec 10, 2024, surveillance pricing was detailed as setting personalized flight costs using data like browsing habits, location, and income. For instance, using a MacBook might result in higher flight prices than a cheaper PC. Expedia and other platforms use AI, such as PROS WTP, to predict and optimize for the highest price a customer is willing to pay. Key factors affecting prices include repeated searches, indicative of urgency; income-based pricing, with higher fares for those in wealthier postcodes; and preference-based offers, where searching for luxury hotels could prompt pricier travel package offers.
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