Consumers are changing the way they book holidays according to Great Hotels Organisation, the London-based hotel sales and marketing alliance. Travelers are shifting away from last minute hotel bookings in preference of longer advance-booking lead-times.
Research conducted by GHO found that in January, 20% of hotel bookings made on GHO’s consumer Web site were booked less than two weeks before departure, a sharp drop in comparison to the same period last year, where 66% of hotel bookings were booked less than two weeks before departure, showing a shift in booking trends in favor of early booking discounts.
Last year, because of the unstable economic outlook and unsettling job prospects, travellers favoured last minute booking deals. However, as the economy slowly starts to emerge from recession, consumers are looking to travel in more cost effective ways, fueling a rise in early bookings as this is when savings can be made.
In order to maximize revenue and profit hoteliers need to ensure they adjust their pricing strategies and costs according to booking trends. “If booking lead time is increasing, hoteliers need to ensure they have plenty of early booking discounts with the right restrictions in place. An early booking offer can be used to build occupancy and can also have a minimum length stay imposed to justify the discounted rates” explains Vanesha Ramsamy, strategic revenue manager at GHO. “The value-conscious consumer is searching for the best deals around and hoteliers should be aware of the rise in price comparison and consumer review Web sites where consumers can compare and contrast a large number of hotels. Sharpen your hotel’s online strategy and focus on building brand loyalty by keeping rate parity across all your channels.”
Rita Castro, e-business and sales executive at Palacio Estoril Hotel & Golf, a Great Hotels of the World member, comments: “Early reservations have increased and we expect a greater demand this year. A strategy for early booking discounts needs to be applied by most hoteliers in order to show guests the advantages they may take from these rates and avoid the constant search for last minute discounts. Nowadays guests are highly informed so there’s no point offering ‘fake’ discounts, by increasing rates during early booking periods and then applying a huge discount. Guests will always search per rate and not per discount.”
As the economy pulls itself out of recession, the success of a hotel is determined by effective crisis management and the flexibility to adopt short-term strategies and improvements. Hotels need to emerge from a recession with their reputation intact. Some hotels may even see themselves in a stronger position having secured new and loyal clients found through a change in pricing strategy.