4 Topics Hoteliers Need to Know
Take-Aways from the 2015 Hotel Data Conference
At this point in the year, the industry starts to reflect on how the year has gone compared to the previous year and what the prospects are for 2016. It’s almost like 2015 is a turning point – when the industry shakes free of the remaining impacts of the recession and moves forward. What’s clear is that the hotel game is changing. With new alternatives to hotels and a disruptive digital consumer landscape that continually changes, challenging hotel marketers and revenue managers. Based on insights from industry leaders on growth strategies, hotel marketing and pricing strategy at the Hotel Data Conference last week, we’ve summed up the top four topics that dominated conversations and will keep hoteliers on their toes through the end of 2015 and into next year:
1. 2016 will be a good year – if you’re ready.
Riding the wave of strong performance in 2015, 2016 is posed to be a good year with RevPAR growth predicted to be essentially in line with this year. According to STR, June 2015 saw the highest occupancy levels ever (73.1%), the highest room demand (109 million rooms) and the highest annualized occupancy (65.12%) ever. To date, ADR is forecasted at YOY growth of 5.0% with RevPAR growth in the 6.8 – 7.3% range (STR, PKF and PwC).
The key to success in 2016 will be to command the dynamic digital and distribution landscapes, managing costs and maintaining connections with consumers. Continued innovation in mobile applications, inventory distribution, online engagement puts space between hotels and their guests. Hotel need to close that gap and get closer to the consumer to continue success in 2015 as the online booking environment gets more complex.
2. Airbnb is a disruptor that’s here to stay.
The sharing phenonemon that the industry thought would not catch on – has done just that. For specific segments, that vary by market, Airbnb is becoming a real challenge. But just how much of a challene is hard to say. Quantifying Aribnb impact is difficult for the industry. We’ve not created the standards yet for hoteliers to understand if, when and how much business they are losing to alternative stays. To compete, hotels have to play to their strengths – differntiating on what they offer that sharing accommodations can’t. From loyalty privledges, full service dining, spa, business center, work out facility, and more. They also must understand how to offer the “local” connection with the community which is a core reason many guests choose to stay in an Airbnb accommodation. It’s a different expereince all together that might not just be totally about the cost. Hotels have focus on what’s important – their consumer connection. Understand the consumer, what drives their stay and how to create a high-value relationship. That will be a way to compete with Airbnb, not just on rate.
3. The search is on for the next big thing to drive new demand
Everyone acknowledges we’re in a great part of the cycle now, looking to gain that extra advantage with new tools. Most new tools help hotels get closer to consumers – whether through reviews, video, social media, intelligence or digital marketing, and ultimately drive new demand. New demand would be consumers that are not already shopping an OTA or DMO site. It’s about truly inspiring, motivating and creating a need for a consumer to travel or stay at your hotel or destination. It can be a movement like eco-tourism or a technology that increases awareness or connectivity. The industry is looking for that next big thing to inspire and connect with consumers. So, have your tried the Oculus Rift virtual reality travel goggles yet?
4. Revenue Management and Marketing are finding new ways to work together.
We’ve heard this before, many times. But it seems like now it might finally be true. Revenue Managers and Marketers are finding that the lines between their roles are blurring more and more. And to be successful, they have to cooperate. Which makes sense, because from a consumer perspective the two influences cannot be separated. The two groups can look at need periods together, determine promotional strategy and leverage consumer demand to justify pricing strategy. By focusing on the consumer and their shopping behavior, revenue management and marketing come together with a common perspective and approach. The result is stronger, better-aligned objectives and increased performance on ADR and bookings on the hotel brand.com.