06 April 2011

Tweak summer strategies as demand heats up

REPORT FROM THE U.S.-As hoteliers eagerly await sunshine and high temperatures, industry experts say now is the time to begin preparing strategies to capitalize on summer demand.

Because of where we are in the cycle-increased demand leading to the beginning signs of pricing power-room availability and deeply discounted rates aren't expected to be as abundant as they were during previous summers. Therefore, summer travelers are encouraged to make their plans early, meaning hoteliers should begin targeting that audience now.

"It's April and people are starting to make their summer plans. We are advising people to book ahead so you have the greatest availability and options," AAA spokeswoman Heather Hunter said. "If you do see a discount, jump on it because there aren't going to be a ton of deals this summer."

Data trackers aren't expected to release their official 2011 summer forecasts until May, but it's clear hotel demand ramps up each summer. STR data shows average occupancy for the summer months of June, July and August in 2010 was 65.6%, while the overall 2010 end-of-year occupancy was only 57.6%. Average daily rate in the summer months was nearly US$1 above 2010 overall.

According to the number of hotel rooms that have already been booked at this point, Rubicon is reporting committed occupancy to be 4.3% higher this summer than last. The number of committed rooms on the books is up 5.9% for June, 4.3% for July and 1.6% for August, compared to this point last year, CEO Tim Hart said.

Although summer usually conjures thoughts of road trips and family vacations, Hart said the recovery will continue to be led by business travel.

"We're seeing what I'd classify as moderate growth heading into the summer," he said. "And the hotels as a result are getting their rates moving in the right direction."

A bigger piece of the pie

Best Western International, for one, is a hotel company that relies heavily on the summer travel season. For this reason, the membership company will roll out two promotions to capitalize on what is perceived to be a period of increased demand.

"Summer season is most critical for our hotels. If you look at all of the indicators, consumers are starting to loosen their wallets, and I am very bullish about this summer," said Dorothy Dowling, senior VP of marketing and sales for Best Western. "But we have to give reason for individuals to stay with us. We focus on a couple of things to ensure we're going to deliver the kind of occupancy our hotels need."

Best Western will launch a "Jump Start to Summer" promotion 17 April in which guests will receive a US$50 travel card after three Best Western stays. The idea is to get travelers to return to Best Western several times within the summer, Dowling said.

A second summer promotion will give away 6.5 million loyalty points to a single guest, enough to redeem more than 200 nights at a Best Western hotel. Details on that promotion are still being ironed out.

Consumer confidence

Chris McGinnis, travel consultant and director of Travel Skills Group, said one of the more telling numbers regarding increased demand during the summer months is unemployment, which last week dropped 0.1 percentage point to 8.8% in the United States for the month of March, the lowest level since March 2009.

"Whenever that number goes down, it gives everyone a lot more confidence," he said. "That is a very good sign for leisure travel this summer. It's consumer confidence more than anything else and people are just feeling better."

McGinnis said families will still be searching for value, so he suggested hotels offer promotions that equate to real savings, such as free breakfast or a free tank of gas.

"Hotels need to promote free breakfast more to families in the summer," he said. "Free breakfast for a family is going to start your day off saving (US)$40. That's a big difference for someone who is driving on their vacation."

Another option hotels should consider in the summer, McGinnis said, is to add some flexibility around check-in and check-out. Families who are trying to turn a long weekend into a vacation could use late check-out, as well as the offer to stow bags for free.

One of the top priorities for hoteliers this summer is to make sure they are available and priced correctly on the appropriate distribution channels, said Bob Gilbert, CEO of Hospitality Sales and Marketing Association International. "Don't be afraid to be in the right place at the right time," he said. "That includes the (global distribution systems), franchises and intermediaries. It includes having (search-engine optimization) done well for your unique attributes."

TripAdvisor now offers hotels the ability to include their promotions in a rotating feature box above search results on TripAdvisor.com. Brian Payea, head of industry relations, said hotels are already signed on to take advantage of that space this summer.

"When hotels have distressed inventory and they see a spike in gas prices and they want to have a special offer for a limited time, they can add a special offer that ends up being right at the top of their own page and rotated in with other special offers atop that destination's page," he said. "Their offer can appear ahead of the No. 1 hotel. They can promote kids stay free or buy-two-nights-get-one-free; they can test them, put them up or pull them down as quickly as they want."

Media Contact:

By Jason Q. Freed
News Editor-Americas
jfreed@HotelNewsNow.com