Hotels eye leisure and ‘bleisure’ as business travel recovery weakens

HOTELS globally are refocusing on leisure and “bleisure” – a blend of business and leisure travel – as corporate travel demand continues to lag.

Some groups are even going as far as expanding their resort portfolios and adapting their offerings for business travellers who extend their stay.

Chris Hartley, chief executive of the Global Hotel Alliance (GHA), said that business travel demand may never return to its pre-Covid peak. GHA comprises over 800 hotels across more than 40 independent hotel brands.

This year, global business travel is “still only at around 80 per cent” of 2019 levels compared to leisure travel, which is “off the charts” versus 2019, he noted.

“Business travel is still lagging, and there’s a generally accepted consensus now that 2019 was the peak (for) business travel,” he explained. “There will never be business travel volumes and meetings volumes like we had in 2019.”

While the lobbies of luxury hotels used to be filled with business travellers in Armani suits and Hermes ties, these days shorts and baseball caps are a more common sight, noted Hartley.

One reason for the slower pickup in business travel is remote work and meetings, enabled by technology. With these alternatives, “travel is getting a very bad rep” due to sustainability concerns.

In the context of corporate responsibility and governance, companies are also reassessing whether to spend on employee travel, he added.

Hartley said that US e-commerce giant Amazon had slashed its entire annual travel budget during the pandemic, from some US$1 billion previously. “So which exec is going to go into that boardroom and say: ‘Why don’t we go back to spending US$1 billion on business travel again?’”

Several other hospitality players also flagged the lagging business recovery.

Accor’s recent global business travel survey found that global year-end travel spend declined by 24 per cent in 2023, compared to 2019. 

“While this marks a 10 per cent improvement over the figures from 2022, it is evident that business travel demand has not yet fully rebounded to the robust levels witnessed in 2019,” said Garth Simmons, chief executive officer for Accor’s premium, midscale and economy division in Asia.

In Asia, some key destinations, including Singapore, are witnessing strong business demand, but it underperforms against 2019 in meetings and events, primarily because events are now smaller, he added.

Asia’s shift from global conventions to smaller regional meetings reflects a continued cautious approach to business travel and a preference for more “purposeful” journeys, Simmons said.

For Hyatt, business travel in the region is recovering, but is not yet at pre-pandemic levels, said Carina Chorengel, senior vice-president for commercial, Asia-Pacific.

Noting that regional markets only fully reopened in 2023, and flight volumes still lag pre-Covid levels, she said: “It may take some time to see how it stabilises in the region, with many airlines having indicated a return to pre-pandemic capacity only by the end of 2024.”

Meanwhile, leisure demand continues to lead Marriott International’s recovery in the third quarter, driving more than half of the region’s room revenue mix, said Ramesh Daryanani, vice-president of global sales, loyalty operations and partnerships for Asia-Pacific (excluding China). 

In contrast, for Hilton and IHG, business-related bookings have matched or surpassed pre-pandemic levels.

But all industry players agreed that the nature of business travel is shifting, with one common trend being the rise of “bleisure”, where business and leisure trips are combined.

Best of both worlds

“Corporate travellers who opt for bleisure may be more likely to attend meetings, conferences, or events that take place at hotels where they can enjoy some personal downtime after their work commitments, increasing the appeal of those properties that have leisure services, experiences and facilities,” said Hyatt’s Chorengel.

In October, Hyatt introduced a collection of over 30 hotels globally offering well-being programmes, such as retreats with cultural wellness traditions and mindfulness workshops, to cater to guests and customers for meetings and events. It plans to expand the collection in 2024.

This may also mean longer stays. Chorengel noted that guests now tend to stay three to four nights, up from one to two previously. Anecdotally, this trend has been “led by business guests extending their trips to enjoy leisure downtime”.

Ascott’s managing director for brand and marketing Tan Bee Leng said that while corporate trips occur less frequently, employees are encouraged to stay longer to maximise productivity and minimise travel.

Hilton said that the blurring of business and leisure travel strengthens both segments simultaneously.

Transient business travellers to Singapore for the hotel group stayed an average of more than 4.2 days in 2023; this was up 15 per cent from 2019, Hilton’s Apac president Alan Watts said.

Hotel operators accordingly increased focus on extended-stay products incorporating more creature comforts.

Marriott Executive Apartments offer “premium long-stay accommodations with home-like amenities”, said Daryanani, while rooms in the group’s Element Hotels brand include kitchens and spa-inspired bathrooms.

Accor has also opened standalone hotels as “Living” extensions of brands such as Novotel and Pullman, which cater to the extended-stay segment. Rooms and suites at these properties typically adopt an apartment-style layout, with spacious living areas, workspaces and high-speed Internet, said Simmons. 

At Novotel Living Singapore Orchard, for example, selected rooms have Herman Miller chairs and electric height-adjustable tables, as well as fully equipped kitchens and in-room laundry facilities. It recently launched one such hotel in Hanoi, and will open another in Bangkok by end-2023.

Ascott’s Oakwood brand, which aims to provide business and bleisure travellers with “the comforts of home, and beyond”, will launch refreshed experiences and in-room amenities next January.

Leisure still in the lead?

Hotel groups are also expanding and enhancing their leisure offerings, banking on continued strong demand.

Of the 16,800 rooms across 123 hotels IHG signed globally in Q3, over a quarter were in its luxury and lifestyle segment.

The segment now represents 14 per cent of its more than 6,200 operating hotels, and 22 per cent of its more than 1,900 hotels under development – the latter being almost double what it was five years ago, said CEO Elie Maalouf. 

Some brands are also boosting resort offerings to capture leisure demand, noted GHA’s Hartley.

Ascott’s Tan said that the group sees opportunities to grow its portfolio in the area. It recently signed a management agreement for Anmira Resort & Spa Hoi An.

Hyatt aims to tap the growing wellness trend at its existing properties. The Grand Hyatt Singapore, for instance, will house an “integrated wellness hub” when it reopens next year after renovations are completed.