It may seem off-topic to ask experts for advice on how hotels should be setting their room rates right now. Thousands of hotels are closing in Europe and the U.S., and the goal for many properties is to survive
Yet most hotels will re-open someday. Most hotels will also continue to accept reservations for stays many months from now. So it’s urgent to price those future stays smartly.
TAKE HEART FROM ASIA
“Asia-Pacific learned a lot by going through the SARS experience, and as a result, most had a plan for facing some of the same challenges”
Westerners have been more quick, on average, to cut rates to stimulate demand, while operators in Asia-Pacific have favored other measures.
A case in point: About half of Asia-Pacific hoteliers tried “value-adds,” compared with only a third in Europe. An example of a “value-add” could be offering any guest who stays a voucher for, say, a substantial credit if they rebook a future stay within a year, or it could be offering a free airport transport in a well-sanitized vehicle.
Asia-Pacific hoteliers were significantly more likely than ones elsewhere in this crisis to emphasize promotions targeted to new segments of customers than their hotels typically have sought. They also have more been more likely to take steps to try to reward loyal, or potentially repeat, customers.
MAINTAIN PRICING POWER IF AT ALL POSSIBLE
“Studies have shown that hotels that are the fastest to drop their rates and who drop their rates the deepest can be the last ones to recover when demand comes back,” said Dan Skodol, a hospitality and travel industry revenue management, pricing, and analytics expert at Cendyn
Yet despite being hard advice to swallow, rate-cutting has long-term consequences.
“One reason is that the pricing structure of many hotels is based on a ‘best available retail rate,’ meaning that all the other rates, such as for business, group, and so on, are tied to it,” Isaac said. “When demand comes back, the more lucrative customers like business travelers and event or wedding planners will be reticent to accept price hikes.”
“But discounts are useless if people aren’t traveling for safety concerns,” Schultz said. “We want to make sure that when demand does come back, we’re sure not to be missing any dollar by having gone too low.”
THINK BEYOND THE RATES
“Guests will remember their cancellation experience more so than the rate they paid,” said Mike Chuma, vice president, global marketing, enablement and engagement at IDeaS, a software maker. “When circumstances permit, offer flexible policies to cancellations, such as offer hassle-free credits or complimentary amenities for future stays.”
The pace of recovery is something to keep in mind when figuring out who to spend your scarce marketing dollars on targeting.
Marketers will need to adapt relevant pitches as social distancing remains an on-again-off-again issue for the next year or longer.
“Showing a big group of people hugging and high-fiving is likely not the best image in these times,” Lugli said.
Looking at new segments to target with marketing might mean a hotel that usually caters to leisure travelers pitching their rooms on platforms for business travelers seeking extended stay and corporate relocation
If you need hope, look to China, where occupancy has begun to rebound. China saw hotel occupancy nearly vanish during the worst of the crisis, but a recovery is beginning to emerge, according to new data from tech vendor Shiji Distribution. Occupancy levels vary, but in some cities have recovered from low single digit percentages to around 30 percent.
Outside of China, Asia-Pacific hotels are also seeing the green shoots of recovery, according to data from the Hospitality Sales & Marketing Association International (HSMAI) and tech vendor RateGain.
.For more information visit : https://twitter.com/MarriottIntl/status/1240639160148529160
