Hotel Sales 2.0 – Tactics
to Drive Business in a ‘Not So Hot’ Summer
The forecasts for this summer are mixed but all agree on one thing – hotels
will not be driving close to double digit REVPAR growth in summer
2008! However, wherever there is gloom there are also opportunities
for those able to identify them!
According to Travelocity, there are no big indicators of shrinking
demand for travel. Travelers are looking for savings by booking packaged
trips, looking for drive destinations, and even taking cruises that
they can drive to, rather than fly. (Dallas Morning News, May 6,
On the other side of the forecast spectrum is a recent study by
TIA as presented at the annual Travel Com Conference. “The
poison pill in the online travel environment is the slumping economy.
If you’re not concerned that $4-a-gallon gas will affect your
customers’ travel intentions, then focus on the fact that incomes
are barely keeping up with inflation. Uncertainty in the economy
puts stress on the travel industry - the cracks are already being
felt as boomers expect to spend less on travel this coming year,
and 62% of all survey participants feel the economy will worsen in
the next year. This sort of self-fulfilling prophecy has a tendency
to drive down consumer spending on big-ticket discretionary items
such as travel. Residents across the U.S. expect to feel the pinch,
except the Pacific states, which show a slight increase in optimism.” (A
quoted in GroupTravelBlog, April 11, 2008)
There are markets that will perform
well and those that are impacted more by the economy and new rooms
supply than others. For
most markets, it is simply too soon to tell how it will shake out
in the end.
It is probably not a good strategy to hold one’s breath and ‘wait
and see’ -- it is a good strategy to be proactive and
put plans in place as it is certain that consumers will be more price
sensitive but also looking to feel that they received value for their
summer travel experience.
- Dynamic Packages. Put together leisure
packages to increase the perceived value to the customer. This
does not necessarily mean lower room rates as packages ‘disguise’ the
rate. This can be as simple as including a ‘gas’ credit
of a certain amount or as complex as partnering with attractions
or other ‘hot’ services such as spas. The opportunities
for marketing these are plentiful – from the hotel’s
web site to one of the Online Travel agencies.
- Appeal to the Local Market. Travelers
still want to treat themselves, even if it’s just a little
bit, this summer. They may not be taking that cross country
road trip but they can drive across town or across the street. Chances
are they have never sampled the rooms, pool, spa or other amenities
of their hometown hotels. Make it easy – reach out
- The Small Meetings Market. The summer may
not be so hot but this market is ‘hot, hot, hot’!
As many corporate and association meetings contract in size,
this levels the playing field between smaller hotels and the
large group houses, independents and franchises. Anyone
can play in this arena that has quality small meeting space. The
aggregate revenue in this market of meeting of 100 people and
less is far greater than that for large meetings and the good
news is, these meetings tend to have shorter lead times. Maximize
your presence to them through online RFP channels like StarCite.
More on this ‘hot’ subject in a later article.
- The Social Group Market. I know
I have encouraged this before but the social small group market
is one that many hotels have not exploited. Many franchises have
special tools designed to allow these groups to book through
the central reservation system. Independents have opportunity
in the online social group space though channels such as Travelocity,
Groople and HotelPlanner.com and their own web site. Gain visibility
on each of these by positioning the hotel and the amenities,
sometimes more important than rate, geared to those that are
preferred by social group. Provide a community page for
the group to share and collaborate on their trip. Families
will still have reunions and classmates will still have high
school reunions this summer.
- Mailings to Past Guests. In a universe
of email campaigns, mailings are now getting attention again
as there are fewer organizations doing them. Special offers
to those guests that already know you and have used you in the
past are cheaper faster to execute than many other campaigns
you could do. Postcards work well as the offer is apparent
on outside of the mail piece – don’t ask them to
open an envelope, they probably won’t. Direct the guest
to make their reservation on the hotel web site. This allows
the hotel to measure the effectiveness of a campaign in terms
of web site traffic and a reservation made through the hotel’s
web site is one of the cheapest reservation channels.
For those of you who want of find opportunities, here are just
a few suggestions. It won’t be long before Marketing
Plan and Budget season is upon us. According to the most
recent PKF study (Robert Mandelbaum, October 2007) hotels are spending
less on marketing and merchandising. It could be appropriate
to beef up that marketing budget for 2008 as the clouds over the
economy are not likely to clear soon!
Watch for the Hotel Sales and Revenue Management 2.0 Book coming
out in late summer!