As we all dive into the new year, hotel owners, operators and revenue strategists are probably a bit perplexed as they try to determine what kind of 2017 it will be. Will the hotel industry’s long upswing continue with further increases in occupancy and higher levels of average rate? Or will the merry-go-round finally come to a stop and everyone need to devise ways to gain bigger shares of declining or flat markets?
During the last global financial crisis, the hotel industry cut rates aggressively. Attendees at this year’s Revenue Strategy Forum wondered, when the next recession comes, can hotels be braver this time around?
It’s no secret that hotel operating costs are on the rise, in many cases at an even higher clip than revenue. Hoteliers are pointing to inflated digital marketing costs, and with the emergence of new distribution channels like Google, TripAdvisor and Facebook, the cost of acquiring guests is higher than ever before.
It seems counterintuitive, but hotels might have found the hook that spurs more travelers to book their next stay with their brands, particularly on a mobile app: encouraging those guests to leave their room.
In what seems like a blink of an eye, loyalty has become the new measure of success in the hotel industry. The big brand companies all recently relaunched or retooled their loyalty schemes as a way to both steal share in a stagnating demand market and to attack the stranglehold online travel agencies have on distribution.