Five Major Trends in Strategic Layout of the Hotel Industry in 2023

As 2023 began, the hotel industry was full of confidence. The American Hotel & Lodging Association (AHLA) releasedthe "2023 State of the Hotel Industry Report"showing that in multiple operational areas such as occupancy nights and room revenue, industry data is rebounding to 2019 levels, with full-year forecasts expected to surpass that benchmark. Even the labor issues that have long plagued the industry are expected to turn around in 2023—hotel employment is projected to exceed 2 million for the first time since 2019.

However, since the pandemic outbreak, the face of the hotel industry has undergone profound changes: guest demographics, consumption habits, and expectations are no longer what they once were; business travel remains constrained; booking patterns have shifted; and hotels must also contend with the impact of emerging digital tools like ChatGPT. To navigate this complex landscape, the following five trends deserve close attention from hotel managers in 2023.

Trend One: Digitalization is on the rise, but personalized service remains indispensable

During the pandemic, the use of artificial intelligence, chatbots, and other digital tools was strongly accelerated, with a global shift toward streaming communication, contactless services, and virtual experiences. These technologies became key means for hotels to fill staffing gaps and complete basic tasks—an AHLA survey from February 2023 showed thatnearly 80% of U.S. hotels reported labor shortages。

However, amid the wave of digitalization, a fundamental element of the hotel industry—the human touch—can easily be overlooked. As AHLA President and CEO Chip Rogers put it: "At the core of travel is human connection... Therefore, we want to provide travelers with a better personalized experience."

Based on this, hotels need to determine the best strategic uses of human interaction under resource constraints. One approach is to distinguish between "enhancement" and "experience": Rogers explained that "things that can be done in a simple, digital way and that meet guests' basic needs will tend toward digital solutions," such as streamlining pain points like the check-in process.

Wyndham Hotels & Resorts has already implemented mobile check-in across all its properties and offers mobile payment options at 5,500 hotels in North America. Later this year, the company will also introduce AI technology on mobile devices, allowing guests to make common requests without calling the front desk, such as asking about pool hours.

Rogers added that personalized service holds greater value in creating and enhancing authentic guest experiences: "A concierge who truly knows the surrounding neighborhood—knows a restaurant's signature dishes, the best times to visit, the best seats—these are things current digital services can't match."

In February 2023,Kimpton Hotels & Restaurantslaunched the "Stay Human Concierges" service, complementing the same-named experience package launched last December. As part of the Stay Human package, guests can work with the hotel's designated in-house concierge to select items from an experience menu (covering options such as perfume-making classes, Muay Thai classes, etc.) to create a unique stay experience.

Trend Two: Blending business and leisure drives innovation in space design

Whether called "bleisure," "flexcation," or another term, the trend of combining business and leisure travel shows no signs of fading. This trend not only affects bookings and guest behavior but also prompts hotels to reimagine and redesign spaces to better support this balance.

Minneapolis-based BKV Group is one of the design firms helping hotels adapt to the bleisure market. Its Director of Interior Design, Joan Sizemore, says the transformation can begin in the lobby: instead of clusters of lounge sofas, there might be group tables for working and collaborating.

Business centers, which had been shrinking due to the proliferation of portable devices, are now experiencing a "second spring" under the bleisure trend, albeit in a different form. Sizemore explained: "Guests may bring a spouse or partner, who might spend the whole day relaxing in the lounge area. Now, we provide small offices or phone-booth-style areas where they can take video calls with a nice background."

Outdoor spaces are also being considered. Sizemore noted: "During the pandemic, people got used to working outdoors. Before the pandemic, I'm not sure how many people regularly worked outside, but this habit has persisted, and people are now more comfortable in outdoor environments." To this end, BKV Group's landscape team can create spaces with concealed workstations and group tables, even by the pool.

Rogers believes that the key to meeting in-hotel work needs lies in robust and widespread Wi-Fi networks, to handle the "enormous demand" on hotel Wi-Fi infrastructure.

Hotel brands are also experimenting with innovations in room configurations. Jeff Voris, Senior Vice President of Global Design Strategies at Marriott International, says Marriott is testing a room where furniture can physically transform at the push of a button. "This means metaphorically expanding the room's footprint while practically enhancing its multifunctionality as a place for sleeping, working, relaxing, and socializing," Voris said. "This allows the room to seamlessly accommodate multiple travel purposes, including extended family vacations that combine work and leisure."

Trend Three: EV charging stations take root in hotels

According to the 2023 State of the Hotel Industry Report, interest in sustainability in AHLA polling has more than doubled since the pandemic outbreak, with 11% of customers now ranking eco-friendly practices among their top three factors when choosing a hotel. However, implementing sustainable measures is challenging because funding often falls on hotel owners and management companies, or hotels lack the personnel and expertise needed for operation and maintenance.

Installing EV charging stations at hotels is one way to attract environmentally conscious guests. In 2022, Hilton Hotelsadded an "EV charging available" filter to its search options. Hilton noted in a January 2023 report: "The EV charging filter alone droveover 30% of users to complete bookings"。”

Partnerships between hotels and charging station manufacturers are also becoming increasingly common, with the latter bearing some or all of the burden of installation, operation, maintenance, and driver support. Last year,EOS Linx and Choice Hotels Internationalreached an agreement to install EOS charging stations at properties in Atlanta, Chattanooga, Tennessee, and Nashville.

Georgia-based EV charging network Stay-N-Charge has partnered with about 40 hotels nationwide to install chargers through two financing avenues, according to founder and CEO Tony Booth. Hotels can either purchase chargers directly from Stay-N-Charge and share a portion of revenue, or lease the equipment with an annual fee. Booth said: "I tell hotels, this is like choosing between capital expenditure or operating expenditure."

Business is growing rapidly. Booth said: "Sales in just the first three months of this year have already surpassed all of last year. It's crazy." Currently, hotels with charging stations are limited, which brings additional bookings to early movers, but the advantage won't last. "If a new hotel in your area has EV charging, you'll get some incremental room nights... Obviously, installing now benefits everyone," Booth said, "but as more hotels join, this advantage will gradually disappear."

Additional funding may come from theInfrastructure Investment and Jobs Actpassed in November 2021. The National Electric Vehicle Infrastructure Formula Program within the act includes $5 billion to help install EV charging infrastructure. Additionally, with applications opening in March,grant funds from the Charging and Fueling Infrastructure Discretionary Grant Programhave also begun to flow. Booth said: "We see enormous potential for hotels to leverage these funds and become a vital part of the charging ecosystem."

Trend Four: Corporate negotiated rates return to the negotiating table after pandemic pause

Before the pandemic, corporate negotiated rates were typically reviewed and renegotiated annually, based on historical data from the previous year. COVID-19 interrupted this process at many hotels, with business travel nearly halting, leaving many corporate rates unchanged since 2020.

As business travel steadily recovers, hotels and travel managers have begun renegotiating these rates. Tammy Routh, Senior Vice President of Global Sales at Marriott International, said: "We've been operating on old rates for the past two years; 2023 is the first year we return to the traditional RFP process."

Renegotiations are also influenced by new factors: having shifted to leisure revenue streams during the pandemic, hotels may no longer view business travel as attractive or profitable. Routh noted that hotels with little prior leisure business have discovered this shift enables revenue diversification. "Our hotels... are trying to determine the new normal mix of business because they may have previously relied entirely on business travel, and now they might achieve a more balanced mix." Nevertheless, "we still need business travel."

Routh said that for travel managers and corporations, the rate negotiations conducted in 2022 for 2023 were "one of the toughest RFP seasons either side has experienced." Clients struggled to predict travel volumes, while hotels found it difficult to determine optimal rates a year ahead in a changing environment. Therefore, she said, there has been increased discussion within the industry about adopting dynamic supply-and-demand pricing similar to leisure pricing, rather than locking in a single rate for an entire year.

Trend Five: In-room dining declines, third-party delivery rises

While many areas of hotel operations report and forecast optimism, food and beverage services stilllag behind 2019 levels. The AHLA 2023 report cites reasons including inflation and protein market procurement issues, which "remain tight due to high feed costs, fluctuating demand, and low inventories."

Also impacting F&B recovery is the prevalence of delivery services. AHLA's Rogers said: "During the pandemic, Americans became extremely accustomed to food being delivered to their doors, and this habit has permeated the hotel industry." He noted that some hotels still offer in-room dining, but the number has significantly decreased.

Rogers believes this isn't necessarily a bad thing, especially for hotels that don't view F&B as a core business. If food delivery services meet demand and customers are satisfied, "I don't think they'll return to the era of 24-hour in-room dining."

Related partnerships include: Grubhub in 2021took over in-room dining at Resorts World Las Vegas; Marriott partnered with Uber Eats, allowing guests toearn 6 Marriott Bonvoy points per dollar spentduring stays at Marriott properties; DoorDash partnered with Wyndham to provide on-demand food delivery to thousands of hotels; and Hyatt Hotels partnered with Gopuff in August 2021 to deliver beverages, snacks, and other essentials.

Rogers concluded: "The use of numerous food delivery services—I think this is a permanent change."