INTERNATIONAL REPORT—With several data firms projecting occupancy to remain flat throughout most of the world in the near future, executives at TravelClick, the New York-based provider of hotel business process management solutions, reminded hoteliers to continue exercising pricing power by “focusing on numbers, not news.”
So far, hoteliers in most regions have done a good job of not overreacting to headlines telling stories of economic and financial disaster, said Kristi White, director of demand and distribution marketing at TravelClick, during a webinar Tuesday.
“If you look at the news, our industry should not be where it is,” she said. “But hoteliers are paying attention to their own industry and not the overall economy. They’re raising rates. Even going into the next quarter these trends will continue.”
For example, hoteliers in the Asia/Pacific region are facing challenges after natural disasters such as earthquakes (Tokyo) and terrorist attacks (New Delhi). Not the mention, the Shanghai region is up against incomparable numbers from last year, when the city hosted the World Expo, which White called “the largest house party in the world.” Still, average daily rate in those regions has not declined as much as occupancy, which means hoteliers are not slashing rate in response to falling occupancy.
“In the Asia/Pacific, they can’t control flat occupancy, but they can control rate,” White said. “Next year, we’re going to have flat occupancy, but rates will continue to grow and that’s good news for everyone.”
Channel shift
Channel shift, according to data collected by TravelClick, is shifting back to brand.com. White said travelers are shopping more sites than ever before but that more of them are heading back to hotels’ proprietary websites to book rooms. She said the third quarter of 2011 was the sixth consecutive quarter that the percentage of bookings on brand.com increased. Direct bookings were up 13.6% over last year In the United States alone, she said.
Also, fewer travelers are booking on opaque sites, White said. This is a direct result of fewer hotels giving availability to opaque sites, which is typical for this part of a recovery. “As rate starts to go up, fewer and fewer hoteliers offer deeply discounted rates,” she said.
White said she is a proponent of revenue managers using opaque channels to sell rooms. Instead of closing out those channels completely, she suggested using opaque channels to manage length of stay. “Maybe try to get that low rate for seven nights rather than closing it out completely,” she said.
RevenueMgt Ad Will Appear Here
Price your value
White and TravelClick’s senior VP of digital agency John Hach discussed ways hoteliers can use differentiators to create value and grow revenue. It’s important to create a value plan, they said, offering four tips to do so:
1. Remember that a hotel’s staff creates its highest value, White said.
“Train, cross-train, and then do it all over again,” she said. “Somewhere over the past three to four years we stopped training our employees. Most front-desk employees today are averaged age 19 to 25, and they’re idea of good service is different than mine.”
White suggested creating a value that places the employee first, then rewarding that behavior. She pointed to Virgin America and Southwest Airlines as companies who do this well.
Finally, teach your staff to recover, she said, because all hotels are going to see dips in metrics at some point.
2. Define your perfect customer and determine how to engage with that customer. Hach said one mistake he sees often is segmented hotels stepping outside their target customer and trying to appeal to everyone. There are certain guests that like boutique hotels, he said, and boutique hotels should market to that audience rather than trying to get customers that aren’t right for their property.
3. Win loyalty by demonstrating loyalty. As an example, White suggested promising your one or two key negotiated accounts that you’ll hold rooms for them for 72 hours before arrival on certain weeknights.
4. Celebrate successes with both your staff and your customers. “Let them know when you’re doing good things,” White said.
She said a client hotel in the Seattle area made it into the No. 1 spot on TripAdvisor and marketed that feat everywhere, including on the hotel’s Facebook page. The hotel increased occupancy by 20% because people wanted to know why it was so good, she said.
“The hotel doesn’t have flat-screen TVs, but they do have world-class service,” White said. “The hotels that wow me the most are the ones that provide good service.”
