Because of their unique location, airport hotels require some creativity with revenue management.
REPORT FROM THE AMERICAS—Revenue management at an airport hotel can be a lot like air-traffic control. More than it does at other hotels, the weather can cause wild fluctuations in bookings. And sudden flight cancellations might mean a run on rooms, so inventory needs to be set aside.
“For airport hotels, short-term demand can change quite a bit, so managing your inventory has to be done very carefully and with a lot of thought,” said Andre Martin, area GM for both the 378-room Crowne Plaza Atlanta Airport Hotel and 190-room Holiday Inn Atlanta Airport South property. “The weather alone can change the pattern of room bookings very quickly.”
At Martin’s properties, for instance, revenue managers try to build a base of advance bookings, but this is a balancing act, since the hotels have airline contracts for a fixed number of rooms bought by carriers to accommodate distressed passengers and crew when flights are cancelled. This airline business is sizable, and could account for up to 25 rooms a night at the Crowne Plaza and up to 15 rooms a night at the Holiday Inn.
Martin said a good relationship with online travel agencies is also very important for an airport hotel.
Sarah Major-Bourgeois, director of distribution for Quebec City-based Groupe Germain Hotels, said the company’s two airport properties—the 169-room Alt Hotel Halifax Airport and the 153-room Alt Hotel Toronto Airport—sometimes have to close rooms to the OTAs.
“We will close all of our rooms to OTAs when there are distressed situations (for stranded travelers), so that we can have full control over our inventory,” she said. “It is certainly more challenging to do successful revenue management at airport hotels, but we all have to try our best and deal with the unexpected.”
Promotions, F&B and groups
One strategy at the Crowne Plaza Atlanta Airport and Holiday Inn Atlanta Airport South for generating business that is not contracted by the airlines is to offer year-round park-and-fly promotions, which allow guests staying at the hotels for even one night to park their cars there for up to seven nights.
“This makes a big difference and is a nice incentive for guests driving in who want to be able to leave their cars for a while at the airport,” Martin said.
The Holiday Inn South Hotel also has a built-in revenue enhancer that it promotes—its Burger Theory restaurant. Given that this is the only full-service hotel in the airport area with a restaurant, the hotel provides a monetary incentive to competing properties that refer guests to the restaurant, Martin said.
“Most guests don’t eat at airport hotels, but our guests eat at least one meal at this popular burger spot, which is a huge success for F&B,” he said.
Airport hotels with ample meeting space, such as the 519-room Westin Denver International Airport Hotel, focus much of their revenue-management strategies on attracting group bookings. These hotels have an advantage with large groups flying in because of their convenient location.
The Westin Denver International Airport Hotel has nearly 50,000 square feet of meeting space. Katherine Emery, the hotel’s director of revenue management, said about 20% of the hotel’s guests are there for meetings and conventions.
“From a revenue-management perspective, we almost operate like a city property, because of our large amount of meeting space,” Emery said. “This is not common at an airport hotel.”
The Radisson Hotel Group found that by analyzing available data on travel patterns it could better predict peak demand times for the brand’s 60 airport hotels in the Americas. This has been very effective for revenue management, said Minneapolis-based Steve Green, corporate director of revenue generation, managed hotels, Americas.
“This data allows us to sell the rooms at the right price at the right time to the right segment of guests,” Green said. “We can release more rooms and provide rooms at better pricing, depending upon what the data shows and who our base of travelers consist of.”
Analysis of travel data also influences renovations at airport hotels, Green said.
For instance, a study found that guests who travel to Seattle and Phoenix for sports tournaments and games prefer rooms with two queen beds over rooms with one king bed, he said. As a result, the Radisson Hotel Seattle Airport and Radisson Hotel Phoenix Airport are converting some rooms with king beds to queen beds, he said.