December 2010
As the dust settles and the sun begins to rise again on the
hotel industry, it is clear that hotel sales and revenue management
will be
different than it was in 2007, the last good year before the industry
and
economy tanked! This time the
differences will be driven by customer behavior in all segments. “The
way consumers think about, plan and purchase travel has altered
dramatically.”(Peter Yesawich, HotelNewsNow, 11/17/10)
The good news is that according to a Trip advisor survey “…Ninety
percent plan to take two or more
leisure trips next year—a slight increase on the 89 percent who said
they have
done so in 2010.” However, the bad news
is that “… travelers named an increase in
online travel deals as the best travel development of 2010 (39
percent)”
(HotelMarketing.com, 11/10/10)
Once upon a time, hotel sales people could pump the phones
and it was a numbers game. Now hotel sales
people need to be more precise about who their potential high value
customers
are and how to reach and approach them.
It’s the difference between firing scattershot and hoping a duck flies
through or a shotgun approach, with apologies to Sara Palin’s
Alaska!
Revenue Managers used to analyze reports,
open and close rates based on demand. The RM is now also a revenue
generator. Now the RM also needs to take into
consideration the net after commissions and costs on each channel,
which channels
to push out which rates in order to follow the elusive customers’
preferences
for receiving information and rates across multiple
channels. “When seeking information, the most popular
sources are brand
websites, search engines and travel-related websites. … ” (Epsilon
Survey,
Hotel News Now, 10/18/10)
Consumer
Behavior Changes in Leisure Travel: Leisure came back in
2010 but as the surveys
above indicated, rate trumps location but when in doubt they go to
review sites
or get recommendations from family or friends.
- Brand Web Sites.
The issue is how they locate the 'online deals' that they are so fond
of? If brand websites are one the first places they go, how
does your web site optimize to appear on the mobile phones that
consumers are increasing using to access info? Remember, a large
consumer group uses the iPad or iPhone and Apple doesn't like
flash. If your site uses 'flash' maybe the hotel should have its
own mobile app with a reservation engine or direct link to the one on
the web site.
- Search Engines.
Then there is Google - where does the property come up in a destination
search and as an online travel site with hotels and rates appearing on
maps. Where does the hotel appear on other search
engines and does it make sense to launch a 'pay per click' campaign as
most consumers never get past page three if they go that far.
- Travel Related Web Sites.
Love them or hate them, OTAs are not going away. Revenue managers
now have to worry about SEO on a number of different
channels. Expedia, the object of much industry
resentment, is still the Big Dog. If Google becomes an OTA, i.e.,
expands Google maps with hotels & rates and begins to offer air
through its acquisition of ITA, there will be consolidation.
Priceline has become the 'go to' channel for many consumers to check
and see if a better deal can be had than on brand web Sites or other
OTAs.
- Review sites and
Recommendations. Trip Advisor still rules but at
least hotels can reply to reviews on the site. In seeking out
recommendations, most consumers are not making a phone call -
they are checking out FaceBook posts, Tweeting their experiences,
asking for feedback on social media and texting their family and
friends. The property's social media presence is an important
factor and social media monitoring is critical going forward.
Consumer
Behavior Changes in Corporate Travel. Corporate
travel is returning according to all indicators. Hotels
are pushing rates as demand in this
sector increases. However, many
companies are demanding free internet access and breakfast, the two
most
compelling amenities in a hotel selection, as part of the package. Free
internet access is “becoming a
piñata everyone
is swinging at” in negotiations, writes The New York Times.
(HotelMarketing.com, 12/02/10)
- Pricing Models. IHG is
rolling out a dynamic pricing model, a concept that was abandoned at
the beginning of the recession. They are offering a negotiated
percentage off of Best Available Rates versus the RFP model of flat
rates. Bjorn Hanson, divisional dean of the Preston Robert Tisch Center
for Hospitality, Tourism and Sports Management at New York University,
predicted that the average corporate hotel rate would rise about 4
percent in 2011, with increases varying greatly. (New York Times,
11/29/10)
- Trading Down. While corporate demand
is increasing this year, there is still pressure to maximize travel
budget and one amenity that does that effectively is breakfast.
"To hold down hotel spending in more expensive markets, nearly half of
the companies in the United States will probably require some employees
to downgrade from full-service to select-service hotels, Mr. (Bjorn)
Hanson said." (NYT, 11/29/10)
Consumer Behavior
Changes in Groups. The U.S. Travel
Association forecasts a 7% increase in meeting and convention spending
this
year, to $90.7 billion. That follows a 15% decline.
However, that still means that groups were
down by 8% -- hardly the robust
increase in demand as seen in the other two segments.
However, anecdotal evidence suggests that
groups are booking and not cancelling with the same frequency as they
did but
they are booking smaller groups with shorter lead times.
- Venue
Selection. A survey of meeting planners in an i-Meet
webinar indicated that 70% rated social media as very important in
venue selection. How well is your property presented
on FaceBook and LinkedIn? How professional is your personal
profile on LinkedIn and on FaceBook? If your customers are checking out
the property on social networks they may also be checking out your
profile/pages before they return your call.
- Rate
Negotiations. Meeting planners are still looking for
value (notice I didn't say rate). By building in value adds and
dollarizing them, the planner feels they have gotten a good deal.
Planners know that this rate climate for group business won't last
forever and are trying to negotiate deals for future
meetings.
- The
Reliability Factor. Meeting planners are still a little
gun shy about using properties they have not used before. They
are not only checking out the property but asking for referrals and
recommendations from other planners. Hotel sales people can mine
their databases not only for repeat business but also to ask for
referrals to other planners that they know. Shot gun versus
scatter shot approach!
Hotel
sales and revenue managers should be excited with the
increases in demand and the opportunity to find prospects where those
prospects
are finding them! 2011 will be a year
that will see new changes in consumer behavior and those that are
poised to
take advantage of these opportunities will be the big winners!
The
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 Carol
Verret and Associates Consulting and Training offers training services
and consulting in the areas of sales, revenue management and customer
service
primarily but not exclusively to the hospitality industry. To find out
more about the company click on www.carolverret.net.
To contact Carol send her an email at [email protected] or
she can be reached by cell phone (303) 618-4065. Visit www.hotelsalesblog.com.
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