ZEN Expert Talks Series 1: Adapting Your Hotel Revenue Management Strategy to Today’s Hospitality Market
May 11, 2022
Article by Ayna Gonzales
Hospitality Innovators Inc., Corporate Director of Revenue Management Michelle Ann De Ramos-Lascano, MBA has over 14 years of experience in hospitality, working with many distinguished hotels in the country.
In the previous blog, we explored Ramos-Lascano’s views on the Fundamentals of Hotel Revenue Management, the factors in constant play, and the Five Unbreakable Rules every hotelier must abide by.
This time, we’re diving straight into how hoteliers and revenue managers can adapt and thrive in the new travel landscape. Learn how to meet guest expectations, traveler demands, and what changes are needed to maximize hotel revenue and resources.
Adapting to Changes in the Hospitality Industry
Q: Since the almost 2-year lockdown, travel patterns have drastically changed. Is pre-pandemic historical data still useful for today’s travelers? Which behaviors are expected to return to how it was, and which ones will change forever?
Yes, pre-pandemic historical data is still important to look at, as this will give us indication whether we are slowly getting back to pre-pandemic level of demands and if the market segment is still applicable in your hotel’s current market positioning and target market.
It is also important to look at the market behaviors. There are some which will remain the same as pre-pandemic and some which will completely change.
Unchanging Market Behaviors
1. Hotel guests’ Purpose of Stay will remain unchanged as more hotels loosen restrictions.
Both leisure and business demands will remain the same. Leisure demand will still be concentrated on the top travel destinations while business stay will still mainly drive the city hotels’ occupancy.
2. Similarly, the average Length of Stay of guests will not change in the new travel era.
Guests’ length of stay will be back to the same level as pre-pandemic times. Guests will stay for an average of 2 to 3 nights for destinations and 1 to 1.5 nights for city hotels.
Dynamic Market Behaviors
On the other hand, we are expecting that the Booking Window, Mode of Bookings, and Guest Dependency on Technology will not be exactly the same as before.
1. Post-travel restrictions, Booking Windows have become shorter and closer to actual check-in days.
We are seeing that more and more bookings are coming in on a shorter lead time of 0-3 days for cities and 7 to 15 days for destinations.
Travelers are becoming more sensitive to last-minute changes in plans due to restrictions. They want to avoid the hassle of booking cancellations and rebooking. They are also opting towards a more flexible cancellation policy for their hotel stay.
2. More hotel guests will be opting for online hotel bookings via OTAs and third-party channels.
Mode of Bookings are also seen to be driven mainly by online channels. With almost 2 years under pandemic, people became more tech savvy and highly dependent on online transactions in almost everything they need for day-to-day survival.
It is expected that even corporate offline bookings will decrease as companies would opt to book online for their business trip. Traditional Travel Agencies would either close, move to an online platform or start operating on hybrid to adapt to this current market behavior of booking online.
3. Guests will be looking for more tech-operated hotels that have automated features and added convenience.
While there will be some who will still opt for a traditional face to face check-in and check-out process, majority of the new generation travelers would now prefer for a hassle free and contact less check-in and check-out process.
And they will also favor hotels with more tech-dependent services for faster and more convenient access to their needs while staying at the hotel.
Q: How can hotels maximize the “revenge travel” phenomenon? How does this affect booking patterns of guests?
“Revenge Travel” is really happening now, especially on the destination side. More and more people are itching to travel since they have been deprived for almost 2 years. In order to leverage on this phenomenon, we should be focusing on the below:
1. Aggressive marketing initiatives that drive room reservations.
Now, more than ever, we should be investing more on marketing activities to ensure wider visibility especially online. High presence on various social media platforms and online channels would create strong recall to the travelers making your hotel top of mind when they finally decide to book.
2. Offer value-add services than discounts to attract more guests.
Majority of the “revenge travelers” are coming from the A-B and upper C. These are the people who have buying capacity and would be more willing to pay for convenience. Offering a value-centric package would be more attractive to them rather than discounts alone.
3. Highlight health and safety standards to address guest concerns.
While the stigma of the pandemic still remains, travelers are becoming more concerned with the safety and cleanliness of the place they are staying at compared to before. Now is the time to really highlight your hotel’s investment on additional health and safety practices and protocols.
Q: What are the key adjustments in revenue management that hotels would need to make in the post-pandemic travel landscape?
1. Revisit your hotel marketing mix to adapt to changing customer behavior.
With the change in traveler behavior and market demand, it is important that you revisit your old market segmentation if it still applies to your current market now. Understanding your marketing mix is vital for you to come up with tailor-fit strategies for each segment.
2. Review your Rate Structure and price according to what the market expects.
Hotel pricing has been greatly changed during the pandemic. Thus, preparation to transition to the post-pandemic travel landscape would require thorough analysis of your hotel’s price positioning.
3. Revamp your campaigns and rate plans that are suitable to your target market.
Make sure to have appropriate offers on your website suited for your current market demand. Remove old promos and rate plans that are no longer applicable.
4. Boost your online visibility and maximize sales potential on different booking platforms.
Review your online ranking with OTAs and make sure you are within the first 3 pages. If not, discuss with your market manager any initiatives you could do to boost your ranking. Also, make sure that you have active campaigns running in various social media platforms.
5. Update your website content and improve audience relevance.
Review all information being shown on your website. Make sure that your photos, videos and offers are updated. If your hotel has been used as a quarantine hotel and is now back to regular or multi-use status, ensure that you have removed any public note or announcement related to being a quarantine hotel to avoid guest confusion.
Adapting and thriving the new travel and hospitality landscape challenges hoteliers to change the way they market and operate their businesses. Understanding the new prevailing market behaviors, guest expectations, and industry dynamics will make the transition easier and more effective in the long run.
For a comprehensive take on the Fundamentals of Hotel Revenue Management, check out the first blog in this 3-part series where our expert talks about the foundations and rules of the discipline.
Catch the third and last blog of the series to learn what awaits hoteliers in the future of hotel revenue management.
Interested in maximizing your hotel revenue strategies? Work with ZEN Hospitality Solutions. As the leading hospitality solutions provider in SEA, we have products and in-house experts available to guide and help hoteliers actualize their hotel’s potential and improve overall performance. Talk to an expert today.
Frequently Asked Questions About Post-Pandemic Hotel Revenue Management
Q: What external factors affect hotel revenue management?
The following factors or market behaviors affect hotel revenue management: Purpose of Stay, Length of Stay, Booking Windows, Mode of Booking, and Tech Dependency.
Q: What can hoteliers do to improve their hotel revenue management strategies?
Hoteliers can do the following to adapt to changes in the market:
Evaluate hotel marketing mix
Review their rate structure
Revamp marketing campaigns
Boost online visibility
Update website content
Q: What is “revenge travel”?
“Revenge travel” is a recent phenomenon wherein travelers are going all-out on their travel plans and spending to make up for the 2 years of pandemic lockdown.
Article by: Ayna Gonzales