Revenge travel filled up Michigan hotels. How long will pent up demand last?

This year travel and hospitality tried to find its footing as “revenge travel” pushed demand beyond pre-pandemic numbers. Looking into a new year, Michigan hotels are still assessing where that leaves them as the country downgrades its cabin fever.

A resurgence of local festivities from sports to concerts to holiday cheer have returned visitors.

The Siren Hotel, which faces Detroit Opera House and Comerica Park, has been booking more short-term stays from close-by guests, said General Manager Mary Beth Bennett.

More guests are booking weekend trips on shorter notice than usual and they seem to be mostly suburban and Canadian travelers checking out the Motor City’s winter activities, Bennett said.

“We’re seeing a lot of people coming to cities like Detroit and places like Michigan that might not have been on their radar before. But they’re really coming in looking for an authentic experience,” she said.

Around the corner, it’s the same story at the Aloft Hotel at the David Whitney and Element Detroit at the Metropolitan, said Jon Coutts, managing director of the real estate group Roxbury.

Both locations have exceeded 2019 occupancy, Coutts said. The pent-up travel demand from the coronavirus lockdown is still there although less intense.

“It’s not like it was a year ago,” he said. “It feels more like pre-pandemic interests [bring people] downtown. I don’t feel we have the same pandemic cabin fever.”

A similar spike and then gradual plateau is happening on the west side of the state.

Doug Small, CEO and President of Experience GR, was expecting a full comeback by 2023 but was pleasantly surprised to see this year is on track to reach occupancy and revenue rates at pre-pandemic levels.

Looking at occupancy reports from October, Grand Rapids area travelers bought 100,000 rooms more this year than the same timeframe in 2019, according to data shared with Experience GR.

Year-to-date October numbers show visitors purchased 1.8 million rooms in the Grand Rapids area.

Small sees it as a testament to the gains Grand Rapids was making in the last decade to market itself as a destination.

“We did our best during the pandemic to not quit,” Small said. “We did soften the tone but kept the message out there to keep the Grand Rapids brand in front of people.”

Pent-up demand fueled a late summer spike. Small said third quarter hotel revenue was 30% ahead of budget for Grand Rapids hospitality. In fall and winter, the gain flattened to 10%. Next year, the projection is hotel revenue with see 3% growth, Small said.

“I think we’ve hit that pinnacle and it’s going to flatten out now,” he said.

(Can’t see the chart? Click here.)

The pressure of inflation is starting to level demand. In a national survey, Deloitte found money concerns were curbing travel plans; of non-travelers, 40% say their financial situation is worse than in 2021.

Overall the percentage of Americans planning to travel between Thanksgiving and mid-January was down 11% compared to last year.

It begs the question: Will prices follow the downward trend of demand? Small said.

“My concern is when does that pent-up demand [end], where people say, ‘I blew my money on that trip that I really wanted. Now I’m going to be a little bit more picky on pricing.’ And will they push back if hotels continue to drive rates?”

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