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Key insights on domestic travel trends to help boost hotel revenue

The timing of reopening Australia's international border remains unknown for the foreseeable future, and Australians are enjoying their own backyard with domestic travel surging. With international travel predicted to underperform pre-COVID levels in Australia till some point in 2023, it makes sense that hotels are focused on the local traveller. 

While Aussie's are known for taking off across the globe, the domestic travel urge isn't something new. Most of the growth in travel across the last decade has been domestic - with more than 90% of trips taken by Australians right here in Oz. Being stuck at home in lockdowns has ramped up the enthusiasm for an escape, with a KPMG survey finding most Australian respondents were planning on booking a holiday this year.

With international holidays out of the question, Skyscanner found that tropical destinations like Thailand and Bali or foreign locales like Venice and Las Vegas have been replaced by the likes of Hamilton Island, Hobart and Broome. 

Thanks to an upsurge in remote working and flexible working policies, Australians are also increasingly able to take their work on the road, creating a new category KPMG calls the 'working holiday'.

A couple of other notable trends KPMG research uncovered:

  • Australians who would have previously jetted abroad in their younger years to travel and explore before settling down are now being forced to have these adventures on home soil. 
  • Much of "the growth in domestic travel will be shorter, more frequent and more affordable holidays", so it is likely these trips will be taken by road. "The profile of road trippers in 2021 may include more young professionals, older families, cruise enthusiasts and backpackers who would otherwise be overseas."

But it's not just Australian hotels that need to prepare for an upsurge in domestic tourism. Hong Kong is hopeful residents will explore their own city after their "Hello Hong Kong – Holiday at Home" campaign and South Korea is encouraging domestic travel by allowing pairs or small groups to travel in programs for specific age groups. 

So what can the Australian hotel sector do to maintain a premium experience for domestic travellers who are used to the five-star experience abroad? 

Focus on sustainability

The closing of the border, the shutdown in travel and the many lockdowns over the past 18 months have given Australians a moment of reflection to reassess life decisions, including the impact they want to have on the environment when they travel. 

Booking.com's Future of Travel Report showed that COVID-19 has increased our awareness of responsible choices - 41% of Aussie travellers want to travel more sustainably, and 62% expect more sustainable travel options.

Tourism Australia managing director Phillipa Harrison said, "Demand for sustainable tourism practices is increasing as more and more people acknowledge travel as a positive force for good".

What does this look like? Tourism Australia predicts it will take many forms, from supporting local businesses by shopping at local wineries, bakeries or butchers to getting involved at the grassroots level by choosing tours and experiences like planting trees to re-establish koala habitat post-bushfires. 

So whether you choose new ways to reduce, reuse and recycle, partner with local businesses to provide local produce on your menus, or work on offering sustainable experiences to your guests, consider how you can up your sustainability credentials to attract this new breed of domestic traveller. 

A premium accommodation and in-room experience

After being stuck within four walls for so long, well-heeled travellers want to escape the stress of the pandemic with friends and family. These travellers are prepared to pay the high price tag for a luxury or exclusive experience as long as it fits their premium tastes.

News Corp's senior travel editors say, "The prestige market is strong, with travellers who would normally spend their money overseas branching out into domestic experiences with premier operators. This satisfies their wanderlust while also ensuring the high level of service they expect." 

A study conducted by the Premium Travel Lab found that premium travellers have several unique needs and characteristics your hotel can tap into:

  • They primarily look for information online and place high importance on the brand of the hotel
  • They seek the best hotel location, biggest rooms and high-quality services for their trips (in that order).
  • They are adopters of new technologies and disruptive business models (see more on digital below).

A 5-star food and beverage operation

The premium domestic traveller is looking for insight into the unique culture and a taste of its local charm when it comes to their holiday destination. Not only this, but they are looking to escape their everyday lives and do something a little different that feels authentically Australian. Whether it be tasting local produce at the hotel restaurant, experiencing farm life in the country, searching a windswept seaside destination for the best fish and chips during their stay or enjoying an indulgent cup of coffee as they enjoy the view - the new domestic traveller is looking for an experience to linger over. 

According to Hotel Management, we will be seeing “greater levels of experimentation and demand for more exotic blends” when it comes to hotel coffee consumption. It’s not surprising that Australians’ sophisticated relationship with coffee is now reflected in hotels, where guests are looking to enjoy multiple coffee occasions, from in-room to front of house to at a conference. Also noted was that hotels are adopting more contactless and touchless solutions for their guests since the pandemic (more on technology to watch below). 

Scott Gingerich, senior vice president of restaurants and bars, Kimpton Hotels & Restaurants (60 hotels and 80 restaurants, bars and lounges), has shared some other key trends in hotel food and beverage coming out of the US:

  • "Restaurants will be challenged to create ambience, warm and memorable outdoor spaces with a welcoming ambience that are also socially distant and safe."
  • "Many people are learning more about what goes into certain dishes with the rise of cooking at home, and expect the same level of freshness and transparency from the restaurants they dine at, as well".
  • "We saw a rise in interest in elevated cocktails at our properties, as guests were looking for specialty drinks they might not be able to make as easily at home."

Going digital

As we've already mentioned, getting savvy with tech is key to attracting Australian travellers. KPMG has found "the use of digital booking tools, social media and influencers, and availability and access to technology at tourist locations will be critical to making the most of the expected domestic travel blitz."

While digitalisation was on the cards pre-COVID, the pandemic has shifted many technologies from 'nice-to-haves' to vital 'must-haves'. Not only is digital providing a seamless user experience for guests, but contactless tech, QR codes and tracing software, and smart and virtual experiences are all boosting traveller confidence and ensuring safe travel.

Want to find out how Lavazza can help you attract more domestic travellers? Check out our 360 offer here.

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