Hotels benefitted from an active summer travel season, but the return of colder weather brings with it the risk of new restrictions alongside the rise of COVID cases due to new variants.
The incessant cloud of uncertainty hanging above hospitality is expected to remain, making it difficult to rely on conventional wisdom and information from before the pandemic. Instead, forward-thinking organizations are looking at data in new ways to adapt their marketing strategy on the fly, giving their properties an edge in one of the most competitive hospitality markets in history.
Through the ongoing ebb and flow of the pandemic, hoteliers have a unique opportunity to increase profitability. Reduced staff sizes have left operators with fewer resources, driving their adoption of advanced technology, particularly automation. If they are able to spend the rest of 2021 and early 2022 using data-driven marketing to grow rates, they will be positioned to benefit from more efficient operations and widening margins as economic conditions (hopefully) continue to improve.
A New Perspective on Promotional Marketing
First things first, hoteliers have been looking in the wrong direction for data epiphanies. Historical data from prior to 2020 remains unintuitive for forecasting rates. Rather than tracking revenue trends to serve the lowest rate on a given day, it’s more efficient now to monitor your performance compared to your competitive set in order to divine key trends.
Market conditions are shifting every day, and rates are changing in response. This creates a perfect opportunity to apply A/B testing to rates and see how trends are directly impacting your hotel’s performance. When did rates pick up, and how many rooms did we fill compared to our closest competitors? Are my promotions targeting appropriate segments and business mix for my region’s demand patterns? This focus will be key to driving optimal pricing and segment acquisition strategies to improve average daily rates while occupancy and stay patterns remain volatile.
Operating on the level required today requires a more agile, adaptive marketing strategy. From reassuring travelers of safety protocols to offering the right promotions at the right time, successful marketing strategies depend on a seamless dance between all functions of the commercial organization. By seeing real-time shifts in booking and rate data, hotels can better assess when to launch key promotions, particularly targeting sought-after mid-week bookings. An even more agile marketing approach would see hotel operators making quick yet substantial adjustments to promotions based on real-time marketing data.
It may seem strange to revise promotions within an active promotional period, but hotels must be quick to capitalize on available bookings. In order to pull this off, hotels will need to automate some aspects of the promotional marketing process and compare them to a variety of data sets. This is incredibly valuable data when it is gathered from a cluster or even a portfolio of hotels.
Furthermore, hotels need a strong revenue strategy to successfully inform marketing efforts. Otherwise, hotels are collecting data that may have been of use at one point in time, but today is all but irrelevant. Instead, revenue managers can take charge of the data they have and adjust revenue strategies accordingly in real time rather than allowing their properties to be swept away in a wave of uncertainty.
Connecting the Commercial Dots
It may be some time before revenue managers are able to properly forecast for longer than one or two weeks into the future, but the first steps begin with understanding what is taking place right now. By watching how your properties’ forecasts change over time, you can make sense of whether or not industry fundamentals are shifting in meaningful ways or undergoing temporary trends. If your automated data analysis chooses to increase your forecast by even one percent, it means your property is beating the odds and it is an indication of something worth investigating.
How has your business mix changed in context with your competition? Where are your competitors sourcing their new bookings? Once you understand that, how has the source of those new bookings remained sustainable? A connected commercial organization is able to use data analysis to examine every corner of its business for trends and opportunities, without placing a drain on resources. These are the hotels positioning themselves as market leaders a year from today, at a time when other properties are still fighting for air.
Fortune favors the fast and agile, and hotel marketing and revenue management teams need to be ready to turn on a dime these days—with reliable, interconnected data insights to back up every decision.