3 Travel Trends & How Your Property Can Take Full Advantage
We’re gonna have happy holidays in the hospitality industry this year and here’s why:
Trend #1: Business is good. Business is very good.
The conference circuit this fall reflected an economic uptick across the board – hotels, resorts and vacation rentals. Smith Travel Research (STR) reports 46 months in a row of RevPAR growth. Better yet, STR sees that upward curve stretching into the foreseeable future.
There hasn’t been a better time in years to optimize your distribution channel mix. The challenge? When business is good, lodging properties tend to scrutinize the books less carefully. There is a lot of forgiveness in good numbers. Resist the temptation to coast! Now is the time to grab market share and take full advantage of the demand to come.
How to Make the Most of It: When times are good, RevPAR is going to increase on its own. If RevPAR is the only metric you follow, consider this–top line revenue is not the same as profit dollars, which factors in costs and resources spent on each of your distribution channels.
The real question is, do you get the most profit dollars out of each distribution channel?
- Look at each channel – online travel agencies (OTAs), group, corporate negotiated, leisure online and offline. Are you capturing as much business from the RIGHT (most profitable) channel as you’d like? Make sure the mix is right based on profit dollars.
- Remember that the most profitable channel is the direct channel, whether it’s online or offline. The direct channel has the lowest cost of sale. NAVIS is the industry leader in growing inbound call conversion and driving revenue. It’s a comprehensive sales and marketing solution that’s much bigger than technology. NAVIS Client Advocates also guide you on how to train your reservation agents in the latest Best Practices to close sales and monitor your team’s performance. Comprehensive, real-time data helps you focus resources at the right times on inbound and outbound calls that generate the most revenue. When you make the most out of your direct channel, you can reduce your focus on OTAs and other channels that produce significantly less profit dollars. Shift sharing is the key to maximize profit.
Trend #2: “Framily” travel led by the Millennials.
Expect a new industry term–“framily” travel–to become part of your vocabulary. Millennials lead the way with travel growth.
- They will travel more than any other generation.
- They want more personal and personalized time.
- They want unique experiences.
Multi-generational travel continues to be on the rise. Vacation Rentals are in a great place to capture this business.
How to Make the Most of It: These are complicated stays with lots of people involved. How many beds? When will everyone arrive? What activities are planned? As we say at NAVIS, anything complicated, expensive, or important is going to take more phone calls. With NAVIS Narrowcast, your reservation agent can capture all the information from every call so it’s available through the entire booking process. When the guest dials in, Narrowcast automatically routes it to the same agent. If that person isn’t available, the agent who does take the call has all of the information from past planning sessions.
This winning combination gives your guests what they want – unique experiences; and to be treated as an individual. Speaking of which…
Do you consider Airbnb a source of additional competitive inventory? If not, you should.
A report out of Boston University School of Management states that a 1% increase in Airbnb listings in a given market will result in a 0.05% decrease in quarterly hotel revenues. By comparison, a 1% increase in your market’s hotel room supply will produce a 0.29% decrease in hotel revenues. Airbnb seems to pale in comparison to your traditional competitors, right? Not really! Airbnb is growing exponentially and could far exceed 1% growth in your market just in the next year or two.
The potential guests who seek alternative accommodations are not just couch-surfing hipsters. They are your potential guests who seek a distinctive stay. The future is in having unique experiences.
How to Make the Most of It: Let’s say you’re launching a six-month marketing campaign to get the word out about your property’s own unique packages. With Narrowcast, you can assign each avenue (direct email, social media, online ads, etc.) a unique phone number and URL keyword and track its success. This feature gives you valuable performance insight and lets you know what works and where to invest more marketing dollars.
And check back next month as we dive even deeper into how you can turn the latest travel trends into increased revenue.
Happy Thanksgiving–we’re grateful at NAVIS for the opportunity to serve you,
Michelle Marquis, NAVIS VP Marketing and Strategic Initiatives