Eager to avoid the same traps they fell into during the global financial collapse and other crises of the past two decades, hotels today are managing inventory with a sharper eye to filling rooms without sacrificing rate and control. But as the travel economy slowly sputters back to life, they also aren’t taking chances.
Caroline MacDonald, group vice president of global sales, marketing, distribution and business performance at Rosewood Hotel Group, voices a common attitude: “It’s important to leverage all partners and channels to accelerate [our] recovery,” she says. She adds that Rosewood is also looking beyond the near term, engaging with corporate and group travel planners in preparation for the fourth quarter and beyond.
“All segments are being disrupted, so we really have an omnichannel approach,” agrees Adam Hayashi, vice president of revenue management and analytics at Accor. “We’re making sure we’re available and visible to any source of demand that’s out there. We’re not sitting back and saying we need to focus on direct or OTA business.”
Hayashi thinks the “book direct” mantra had already lost momentum even before COVID-19. “The new normal is really understanding what business we’re protecting for,” he says. With groups falling off the radar, inventory that wasn’t available before is now up for grabs, and making it visible across channels is a priority.
Simone Puorto, CEO at Travel Singularity, says hoteliers should get over their “us versus them” mentality toward OTAs. In Europe, he points out, the majority of hotels are independents, and a brand.com approach isn’t within their grasp. They live and die by OTAs, and they can benefit from resources like Expedia TravelAds.
“Let’s face it, in challenging times it’s safer to outsource distribution rather than betting on less expensive, yet less effective channels,” Puorto observes. “We should accept all the help we can get, and not be too picky about the origin.”
With tight budgets and hopes for a recovery boost hanging on leisure travel, many hotels are laser focused on drive-to business and social events.
“It’s important to understand who and where the customer base is and when they can travel,” says Jenna Villalobos, vice president of revenue strategy at Outrigger Hospitality Group. That’s especially true in a destination like Hawaii, where a mandatory 14-day quarantine and geography have decimated demand for hotels.
The consensus has long been that discounting has the potential to do more harm than good, but this time around hotel companies are handling it more shrewdly.
“Discounting doesn’t create demand, and we are not in a demand period now, at any rate,” says consultant Dan Wacksman of Sassato, currently HSMAI marketing advisory board chair. “Should you be priced as high as you were before? Absolutely not,” he says, adding that “it’s hard to maintain price integrity without some (unique selling proposition).” In any event, many travelers value flexible booking terms and safety over discounts.
Accor has turned to one-night deposits, which provide a fence around discounts, providing the guest some peace of mind and helping hotels project occupancy more reliably. “We want to stay competitive, but we also don’t want to do across-the-board discounting,” Hiyashi says. “We want to focus on being targeted and fenced, really focused on certain segments, such as our loyalty members or drive-to business.”
By now, it’s common knowledge that travelers are looking for reassurances about safety and for more information before pulling the trigger. But their concerns go beyond cleanliness.
“Post-COVID promotion communication is different than previous economic downturns, which focused solely on a price-point recovery,” says Villalobos. “Knowing the customer and understanding what is important to them will guide a property in designing value-adds which are more meaningful.” One recent successful promotion for Outrigger was an offer that donated free roomnights to nurses and respiratory therapists for each paid booking.
Rosewood guests are looking for luxury staycation-style experiences; immersive summer programming and offers, value-adds and signature experiences like private destination tours, daily resort credits, free overnight parking and discounted or free nights for longer stays resonate with these guests, MacDonald says.
Marcus Hotels & Resorts is making strategic use of packages and value-add promotions mainly in urban markets, where demand is especially soft, says Linda Gulrajani, vice president of revenue strategy and distribution. “Our resorts are performing a lot more like they have historically, and we are utilizing discounts and packages only to increase the shoulder nights,” she adds.
Regardless of channel, the more relevant information a booking source can provide for jittery travelers, the better. Regaining trust is essential. “We’re focusing on updating our content throughout all of our channels,” says Jennifer Schneider, vice president of revenue optimization, Americas, at Radisson Hotel Group. The goal is for guests to find answers easily, both to their questions and to details about the company’s safety protocols.
That craving for details might be an opportunity to drive direct bookings, says Wacksman. Are the property’s restaurants open? If not, where can guests grab food nearby? Are lower-level floors available to avoid the need for elevators? What cleaning and social-distancing protocols are in place? What are the local restrictions on businesses?
“OTAs are not going to have that level of information,” he says. “Smart hotels would create a page, or even post the information on their home page, addressing those issues.”
Ultimately, says Trevor Stuart-Hill, president of Colorado-based Revenue Matters, the questions are: Is the supplier going to provide care for me and my family? And what do I need to know about staying at this property? “Staying at a hotel is a much more intimate one-on-one relationship than it has been in the past,” he says.