COVID-19 and the subsequent global travel lockdown has impacted the hospitality industry in an unprecedented way - culminating in widespread job losses and hotel closures.
In particular, the travel sector - being dependent on government policy and lockdown regulations - has endured some of the steepest shocks.
For many hoteliers, the goal during the pandemic hasn't been optimising rates to maximise revenue, but simply making sure the property is able to open when the pandemic comes to a close.
Although the path to recovery is still somewhat blurred, green shoots have emerged. As the vaccine rollout intensifies across the globe there is reason to be optimistic about the state of the hospitality industry, moving into Q2 of 2021.
With governments aiming to have large proportions of their populations vaccinated by the end of Q1, travel will eventually resume, and demand will gradually return. However, it will not reach pre-pandemic levels right away, meaning hoteliers will be operating in an intensely competitive market.
Throughout 2020, revenue teams have been having to do more with less, remaining agile and ultimately pivoting their strategy away from a reliance on now largely irrelevant on-the-books (OTB) data and year-over-year trends.
The number of variables impacting traveller decisions today is making it incredibly difficult to accurately predict and stimulate demand, but predictive, forward looking data offers the best opportunity to anticipate and capture the inevitable shift in demand.
Changing consumer behaviour
We are in uncharted territory, and navigating conditions without any historical precedent. Traveller behaviour is determined by government travel restrictions and local lockdown policies.
These policies have been in constant flux from country to country – dependent on a number of factors, including but not limited to: the number of cases, the local R number and variant strains of the virus. These unstable conditions make it incredibly difficult for hoteliers to forecast, having to take into account their own nation’s travel restrictions and that of their feeder destinations.
As consumers are unsure if they will be able to travel, one, three or even six months in advance, the booking window has been compressed. Travellers that are venturing out are booking within days of arrival, making it nearly impossible to use OTB data to make decisions.
Apprehensions around the ability to travel, particularly internationally, has also caused a rise in domestic travel, staycations, and drive holidays. Meaning traveller search criteria has changed as well, with options like parking facilities and pet friendly accommodation coming into consideration.
With no corporate or MICE travel, hotel demand has shifted almost entirely to leisure, meaning hoteliers are solely focused on what was previously, for the most part, only a small segment of their business. With less demand and supply remaining the same, competition is heightened once more.
Additionally, with safety and social distancing still top of mind for guests, hotels are competing with more private, alternative accommodation. Searches for apartments, aparthotels and alternative accommodation options have risen compared to normal hotel searches, providing another challenge for hoteliers to overcome.
Impact on hoteliers
Increased competition from alternative accommodation and hotels that used to focus on other segments – predominantly corporate and MICE travel – means that hoteliers are having to revise their traditional competitive set and take a more dynamic approach.
To compound this, hotels that previously relied on MICE and corporate travel have to alter their strategy to compete for leisure business, which can result in promotions, flash sales, last-minute deals and general pressure on pricing.
Even though there are now encouraging signs for travel, the unfortunate reality is that in 2021 demand drivers will still be heavily impacted. Therefore, analysing past performance data and YOY trends as a gauge of future demand will continue to be a largely redundant exercise for revenue managers, making it far more difficult to forecast.
The shorter booking windows also mean there is less time for hoteliers to respond to changes in demand. With demand remaining so low, any positive uplift needs to be capitalised on immediately, requiring hoteliers to be more agile than ever before with their pricing strategy.
With the vast majority of hotels having to make some staff redundant or furloughed to keep business afloat, resources are being stretched further. As booking behaviour is increasingly volatile and historical data largely ineffective revenue managers are taking on more work and having to become far more proactive.
Now is the ideal time to look into new data points to better understand "traveller intent" and make more informed revenue decisions for your hotel.
A world of new data points to employ in your recovery strategy
Hoteliers have long struggled to fully understand the guest journey before booking, especially in the inspiration phase. Now, with Market Insight , OTA Insight's new product, you can look at pre-booking, top-of-funnel data points, to get a clearer picture of unconstrained demand and move ahead of the booking curve.
These new sets of data include:
1. Hotel search data
This is gathered from OTAs, metasearch sites and GDS. Hotel search data allows hoteliers to see what destinations travellers are considering, what dates they're looking at, their length-of-stay and what type of accommodation they want.
Revenue managers can then identify which properties in their market are receiving most searches and determine how they compare in terms of price and guest experience, adjusting strategy accordingly.
Also, being equipped with average length-of-stay information, distribution and sales teams can work to optimise budgets. While marketing teams can pinpoint what travellers are searching for and create specific promotions for targeted demographics and specific length-of-stay queries.
2. Flight search data
This gives a more well-defined illustration of actual demand in your area. Flight search data provides you with an understanding of the volume of travellers expected to travel to your market on a daily basis, as well as where they're coming from. With this data, revenue managers and marketing teams can target guests from particular destinations and ensure that they aren’t looking past your property.
Similarly, you can identify which days will yield the biggest return, allowing you to concentrate your time and budget on where it matters most. This is crucial to understand at times when teams have downsized and demand may still be sparse.
3. Hotel and alternative accommodation availability
COVID-19 has been a catalyst in rising traveller demand for private homes, making them an integral part of the competitive landscape and a data point hotels can no longer afford to ignore.
Knowing how many alternative accommodation listings you may be competing against for different LOS, and at which price point, completes the picture of consumer choice and enables your hotel to provide more competitive offers.
4. Dynamic comp set
Varying travel restrictions have led hotels to repeatedly open and close. This means properties which were once competition, may not be any longer. Now, in order to spur demand, some higher-end hotels may discount heavily
Dynamic comp set data means you are no longer limited to a static group of pre-COVID competitors but can see how your hotel's rates and availability measure up against a wider selection of competitors, including alternative accommodation on home-sharing sites.
Summary
Prior to the pandemic your team relied on post-bookings data and evaluated it against a static set of competitors to build your strategy. But, with booking behaviour having changed drastically, historical data points taking a back seat, and increased competition for the same amount of business, revenue teams must embrace change and adapt to the newest data and technology available.
There simply isn't time for a trial-and-error period. Hotels that have a better understanding of their customer will achieve the best results and be well positioned to come out on top. To succeed you will need to utilise forward looking data sets and tap into upper-funnel demand trends – engaging travellers while they are still in the "dreaming" and "research" stage of their customer journey.
It's also time to take a fresh look at your competition. With the rise of OTAs and review sites, competition is far more dynamic. With the dramatic reduction in corporate and MICE travel there's no longer a distinction between hotels focussing on business travel versus hotels focussing on leisure.
Couple this with a continuing upsurge in demand for alternative accommodation and your competition has altered once again. You are now competing against practically the entire market, so consider a tool that can automatically adjust your competitive set based on factors, such as consumer searches, your amenities, star rating and price.
With many hotels having to operate with a much leaner team at present, working in silos isn't an option – revenue, marketing, sales and operations teams are collaborating more closely, and common data sets should help align goals and objectives for all.
Thanks to forward looking data-sets, revenue and marketing teams can begin to understand exactly what potential guests want. Then serve them the appropriate promotions and offers, based on their needs, for the correct dates and length of stay.
With a rebound now on the horizon, hoteliers who correctly forecast the return of demand and are agile in actioning it with fellow commercial teams will gain a clear competitive advantage – vital to resilience and success as you move through this year into the next normal.