While most of the hotel industry’s focus over the past year has been on the macro-level impacts of COVID-19 such as property closures, furloughed staff and adapting to new business models, there are less obvious but significant changes in guest behaviour that influence a hotel’s ability to attract the right guest for the right price.

Guest booking patterns have changed, in some cases beyond recognition. The common path from intent, to book, to stay has been shortened to such an extent that many properties are struggling to forecast demand for their operations beyond the short-term.

The trend of shorter booking windows has grown from a number of factors, including an abundant supply of rooms and price stability, but is primarily driven by uncertainty. Guests are reluctant to plan and book a holiday, or business travel, far in advance given the possibility of new travel restrictions being enacted by governments at a local, national or international level. 

To illustrate the extent to which booking patterns have shrunk, if you were to look at the guest demand or bookings for a hotel in the APAC region which had an inventory of 100 rooms, generally more than 80 percent of the confirmed business would be bookings for the next 14 days. This is double the amount of confirmed business falling in the same 14-day window compared to the previous year.

Not only is the actual booking window shrinking for guests, but the overall length of stay is also compressed in many markets, due to the lack of long-stay businesses and shift from corporate segments to leisure segments. In such an environment, hoteliers should be prepared for shorter lead times, refocus away from the business to leisure market and adjusted inventory management.

Local, or drive, destinations are experiencing recovery ahead of other sectors—with travellers seeking out accommodation options in tourist locations outside of major metropolitan areas. With air-travel unavailable, unaffordable or undesirable to many, the drive market is paving the road forward for many accommodation providers.

To capture demand from this market, hotels should focus on family-friendly options like interconnecting rooms or flexible room capacities and provide transparency in any extra-person or rollaway charges. The family or drive market may often be seen as a lower yielding or price sensitive segment; however, don’t underestimate the pent-up demand for luxury and indulgence. Hoteliers should highlight features, promote add-on experiences and upgrade options that will enable the guest to make that first “return-to-normal” hotel stay memorable.

While booking windows are expected to remain shortened until governments can provide certainty that travel restrictions are no longer going to be enacted and the general public has confidence in their ability to plan and stay, there is a large volume of pent-up demand for travel. On the day a quarantine-free travel bubble between Australia and New Zealand was announced, travel booking site skyscanner.com.au reported, “visits ‘spiked’ almost 70 percent at the time of the announcement” for holiday options between the two countries. 

The rollout of effective vaccines across the APAC region will play a large role in building confidence amongst potential guests that there will be freedom to travel. Hoteliers need to keep a keen on eye on local market developments and any government led initiatives to open their destination to international guests, so they can plan strategically for capturing business.

For example, the recent announcement from the Thai government to open Phuket to international visitors who have had a COVID-19 vaccination at some stage in 2021 following their own local vaccination drive presents a clear opportunity to build demand. However, Phuket based hoteliers should not simply execute wide-ranged external marketing efforts to secure bookings from international travellers around this announcement. They should instead target demand generation efforts on those international travellers most likely to be able to visit Thailand and return home without quarantine obligations in their own country, as they will be more likely to book.

The hotel sector is undoubtably operating in a buyers’ market, which means all properties need to tailor offerings to what the customer wants and needs to capture your fair share of available demand. Given that advance purchasing does not exist in the current market, hoteliers should use and promote flexible booking terms and conditions, including the use of travel credits and refunds for guests unable to fulfill their bookings, to build confidence.

In a disrupted booking environment, dynamic pricing and personalised offers are critical to compete with OTAs and the sharing economy to boost direct sales and profitability. To help hoteliers adapt to a changing environment and shortened booking windows, technologies exist that provide hoteliers the ability to personalise rate plans such as loyalty, dynamic promotions and value-added packages to enhance the guest shopping experience. Solutions on the market such as IDeaS Agile Rates, empower hoteliers to transform their pricing strategy through multiple dimensions of demand, guest behavior and product attributes to build the most relevant and unique price and product for the guest.

No one in the industry knows when operating conditions will return to normal; however, booking windows and average length of stays will increase as confidence returns to the travel sector. Through understanding market trends, outside influences that can impact guest bookings and tailoring promotions to guests with the right promotion and the right message at the right price, hotels will be best placed to capture business now and into the future.

For more information on how your hotel can capitalise on revenue opportunities in 2021, please visit: www.ideas.com

Click here for more information about IDeaS.

The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.

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