In April 2021, hotel bookings in the US significantly exceeded 2019 levels - giving a strong indication around how revenge travel will develop globally. Thus, our 14th edition of The Hotelier PULSE Report showed increased optimism across the industry, with over 75% of hotels reopened or planning to reopen in May 2021. Average monthly occupancy expectations also increased substantially for all market segments, and for the first time in the series, the majority of hoteliers expected ADR to increase. As hotels worldwide gear up for the pent-up travel demand that’s coming, we catch up with David Chestler, Partner & Sr. Managing Director - Global Sales Execution at Provision-Partners, to learn how hotels can continue to strengthen their position and be at a competitive advantage in the upturn.
Here in the US, we continue to see positive signs of travel resuming with a vengeance.
Hotel bookings in the US in April 2021 significantly exceeded 2019 values. In your view, how will this signal of 'Revenge Travel' develop globally as more destinations reopen?
Here in the US, we continue to see hopeful signs of travel resuming with a vengeance. We have even started to joke that the virus is now cured in most regions of North America. Certain locations, such as Orlando or Las Vegas, are currently running very high occupancies. Meanwhile, exclusive and remote resorts are also seeing an influx of bookings from US travelers.
In the short-term, travel will continue to be controlled by three crucial factors - government, vaccination, and consumer confidence - not only in terms of health, but also wealth. The good news is that barriers are falling away each day as vaccination distribution continues and more flights reopen, which in turn increases consumer confidence.
As travel confidence increases, businesses are starting to think about what strategies should be implemented to capitalize on the pent-up travel wave that’s coming. Destination marketers are looking closely at how Google will attract customers and what is needed to optimize visibility and attract the right audiences. Meanwhile, Central Reservations teams are thinking about the status of rates and availability.
While we are seeing more hotels reopen, many of the larger hotels properties remain closed, likely due to staffing challenges. These businesses need to rehire, retrain, and retain staff to cope with the demand that’s coming, whereas the smaller hotels are more agile.
It’s likely that properties that have already reopened will benefit from greater demand and a better control of rates, because they will have had more time to put the right strategies in place. This is where we will see some hotels performing really well, and others will struggle because they will still be running around trying to figure out how to make the most of the Revenge Travel economy and support the demand operationally.
For the first time in the Hotelier PULSE series, the industry's expectations are that ADR may moderately increase. What pricing strategies should Hoteliers take now to capitalize on the demand in the upturn that's coming??
Instead of lowering rates to stimulate demand, businesses should look closely at their competition set (if it still exists) to determine where to position. By doing the research, hotels will be better able to make data-driven decisions on whether to hold the line and stay in the middle, or become a market leader in one area. In their marketplace, hotels must determine where they have a competitive advantage in terms of offer, so they can hold or even increase rates slightly.