While the Omicron variant slowed market recovery in 2021, STR’s data reveals a strong positive trend for the hospitality industry for 2022 and beyond.
It shows that net propensity to travel has increased to 32% in February 2022 for both domestic and international trips. This is a big leap from late 2021, when the same metric came to -20% and -56%, respectively.
More recently STR discovered that globally occupancy increased week over week by 2.1% to 57.5% in the last week of April 2022. With ADR remaining stable at US$127, RevPAR rose by 3.9% in the same timeframe.
But things are still not quite as they once were. Past demand and travel patterns aren’t back in place and likely won’t be for some time. According to STR, 25% of markets around the world are still in a recession or even a depression phase.
For revenue managers this means that the old ways won’t be enough to succeed in this new environment. Even post-recovery you can’t stick with or go back to looking only at historical and competitor data to set rates.
Instead, make forward-looking demand signals, such as monitoring of booking behavior part of the data set that informs your pricing decisions.
This permits you to adjust your strategies and capture demand well ahead of your competitors. As a result, you’ll win big even if overall recovery may prove sluggish in your region.
The three data pillars of a forward-looking revenue strategy
Historical internal data used to be the golden standard when it came to forecasting demand and business potential. It played a part in everything from forming long-term strategies to immediate pricing updates.
The pandemic upset this well-established process because it upended long-standing travel patterns and recurring demand trends.
Consequently, a broader approach is needed today. Yes, historical and internal information are still important. But without external forward-looking data, you won’t have the necessary insights to make optimal pricing decisions.
Let’s look at the three data pillars you need to shape your high-yielding forward-looking revenue strategy.
1. Internal data
Let’s start with the classics. Your historical performance data gives you perspective and shows you what’s possible. It can also reveal where you could do better in the future in terms of pricing and pacing and which guest segments and source markets to focus on.
Next, shift your view to the present and examine your on-the-books (OTB) data. Among others, it answers questions such as:
- How much confirmed business do you already have for a set date or period?
- How quickly are new bookings coming in for this date or period?
- How are your individual guest segments and source markets performing?
- Which length of stay and booking patterns are popular among your guest segments?
Compare both historical and OTB data to see trends and changes in booking behavior. Here you’ll find the first clues about potential for optimizing your rates and distribution.
2. Market data
This includes upcoming events and holidays as well as your compset’s rates, restrictions and inclusions. Monitoring this reveals what other players are doing and who is offering the best value for money. It also allows you to benchmark and see who is performing best over a certain timeframe. This is the basis you need to begin optimizing your positioning.
Look at market OTB data to take your analysis to the next level. Seeing how your OTB business compares to the compset shows if you’re ahead or behind. Again, it’s time to ask yourself what this says about your pricing strategy’s success. Which tweaks are needed? Where can you double down on things that are working well?
2. External travel search data
Flight and hotel search pressure tells you how many people are searching for which dates. This indicates overall travel intent well before you see bookings come in and allows you to be more proactive with your pricing.
Drill down on this data to get answers to the following questions:
- Which markets are searching? Are they your typical key source markets or different ones?
- What are they checking? Look at LOS, travel dates, stay patterns (weekend, weekdays…), etc.
- What is the booking window? Is the lead time the same as usual or is it different?
Monitoring this type of booking behavior will help you understand where your demand is coming from and what travelers are looking for. The results could be quite different from what you’re used to since domestic and regional travel are still more popular than international trips.
Examine your offers against this information and ask yourself:
- Do you have what travelers are looking for?
- How can you make your offering more attractive?
- Is there a high-demand market you could do more to reach, e.g. via targeted promotions?
This will put you on the route to better reach future travelers while they plan their trips.
Looking at these three data pillars will give you a full understanding of your market, your position and the unconstrained demand. This lays the groundwork for informed pricing decisions. But there’s one more very important step that will ensure you get the most out of it all.
An automated RMS – the key to optimal pricing decisions in times of changing booking behavior
Optimal pricing is not about always being the cheapest. It’s about offering the best value for money on what travelers are currently looking for. Use the data insights into emerging and existing demand to provide value through optimized pricing and inclusions. This will make your hotel more competitive and attractive.
The three data pillars mentioned above are crucial for this. However, collecting and analyzing them manually is extremely time-consuming and can’t be done in real time. On top of that, some data points are hard to access without business intelligence tools.
An RMS that incorporates forward-looking data addresses all these challenges because it can gather and evaluate all three of the key data pillars in real time. Atomize is a prime example of such an RMS. It works with leading business intelligence tools to access real-time market, competitor and forward-looking demand data. On top of this, the RMS now leverages its newest partnership with trivago, the global accommodation search platform, to access live search data for over five million hotels worldwide. Based on monitoring of booking behavior per market this provides an even more reliable indicator of future travel intent and refines the rate suggestions the Atomize RMS can make.
All this happens automatically and continuously, without you having to lift a finger. You can decide if you want to review the price recommendations or if you want to switch on full automation and rates will be adjusted instantly in response to market shifts. This saves you valuable time and ensures you always adapt your rates to current demand in real time.
These live rate updates give you a massive competitive advantage. Before your competitors even realize that demand is shifting, you’ve already optimized your rates and created suitable offers to capture it.
This is how your RMS can take the tactical tasks off your plate and free you up to focus on the strategic aspects, such as creating targeted offers for specific regions or evaluating your performance to find areas needing attention.
As a result, you’ll increase your chances of capturing more demand than the competition and getting the very most out of the recovery phase at your hotel.
Find out how the Atomize RMS can help your property get ahead of the pack, reach out now to schedule a quick, no-strings-attached demo!