Exclusive Feature: When bookings slow, many hotels turn to discounting as the quickest way to stimulate demand.

While somewhat effective and simple to implement in the short-term, discounting can erode long-term performance, weaken rate integrity, dilute brand credibility and condition guests to expect lower prices.

Last-minute promotions also come with practical limitations. Prospective guests may not have enough time to act, reducing the campaign’s impact. In some cases, hotels may also lose revenue from guests who booked flexible rates and then cancel and rebook after spotting a cheaper price online later.

A more sustainable approach is shifting the focus from price to value. Rather than competing solely on cost, hotels can influence booking decisions by shaping how guests perceive the overall experience. This means understanding what different traveller segments value and aligning offers, pricing and distribution strategies accordingly.

Leading hotels are already moving in this direction, using data, technology and cross-functional alignment to make more informed commercial decisions. By combining demand insights with a deeper understanding of guest behaviour, they are able to identify where opportunities exist to stimulate bookings without undermining pricing power.

Protecting rate integrity through value-led strategies

Rather than simply discounting rooms to stimulate demand, hotels can strengthen their proposition in a slow market through value-added inclusions like late check-out, dining credits, room upgrades or curated local experiences. This approach protects rate integrity while delivering a more compelling guest experience, ultimately supporting both revenue growth and guest satisfaction.

From a revenue management perspective, it is crucial to first determine when a promotion is necessary based on the property’s own demand forecast, and what the optimal pricing strategy is (whether it be discounted offers or value-added packages.) Once these factors are considered, revenue managers can design targeted offers that sales and marketing teams can use to attract business.

Using guest insights to drive targeted promotions

Hotels have access to a rich foundation of guest data, from booking histories and loyalty programme activity through to guest spend across dining and ancillary services. When captured effectively, an advanced revenue management system can use this data to uncover meaningful patterns in guest behaviour, preferences and value. This enables hotels to move beyond broad pricing strategies, instead building targeted segmentation based on demographics, booking behaviour and total guest spend.

With these insights, hotels can deliver tailored offers. Business travellers may respond to flexible cancellation policies and loyalty perks, while leisure guests might be drawn to packages that bundle accommodation with dining, spa treatments or local experiences. Families may opt for added inclusions such as breakfast or activity-based offers, while couples may prioritise premium room upgrades or curated experiences. Each personalised touchpoint reinforces a sense of recognition, increasing the chances of bookings and long-term loyalty.

Effective hotel promotions should be designed with clear audience segments in mind, considering booking lead times, preferred channels and source markets. The drivers behind a corporate traveller booking midweek differ significantly from those of an international leisure guest planning months in advance. Understanding these nuances allows hotels to align pricing, packaging and distribution strategies more precisely with demand.

Focus campaigns on demand that will convert

Revenue management technology has transformed how hotels price and forecast demand. Yet these predictive insights rarely reach marketing teams in a timely way.

As a result, marketing decisions are often made without understanding a demand period’s level of influenceability. For instance, a promotional campaign might be launched during a low-demand period where no amount of advertising can influence travellers to book.

Conversely, a promotional campaign during high season where a large portion of room inventory is booked out months in advance is unlikely to improve revenue performance. While these examples are relatively easy to avoid, without clear insight into specific booking periods, hotels risk misdirecting marketing spend and missing opportunities to stimulate the right kind of demand.

This is where the next generation of demand intelligence tools changing the conversation. Today, the latest innovations in revenue management go beyond projecting demand. They now have the ability to provide intelligence on how sensitive that demand is to marketing activity and which market segment group to target.

In practical terms, that means a hotel can not only see when occupancy will likely be low but also why, and whether targeted campaigns are likely to shift guest behaviour. Some low-demand periods are simply not influenceable while others can deliver an outsized return on investment with the right promotion. The ability to distinguish between the two is what separates reactive hotels from proactive ones.

New solutions such as IDeaS Spotlight are designed to bring this level of intelligence into play. Built on advanced forecasting and price sensitivity analysis, Spotlight connects revenue and marketing functions to help teams understand when and where marketing spend can generate measurable results. Instead of running campaigns based on assumptions, hotels can now prioritise those that will truly impact revenue.

Grow direct demand and reduce reliance on OTAs

While online travel agencies (OTAs) offer valuable visibility for hotels, they also come with high commission fees that can severely impact profit margins. To address this, hoteliers can develop direct demand generation campaigns that encourage travellers to reserve rooms through the hotel’s official website or reservation centre.

By doing so, hotels gain more control over their brand image and guest relationships while protecting valuable revenue from third-party commissions. A robust revenue management system can further bolster this approach by helping hoteliers set competitive direct-booking rates that align with real-time market conditions.

An effective direct booking strategy begins with a well-optimised website. This includes ensuring a mobile-friendly design, offering a smooth and secure checkout process, and making calls to action clear and persuasive.

Unlike OTAs, which typically promote lead-in room categories and compete on the lowest prices, independent hotels can also differentiate themselves by showcasing premium room types (such as suites or family rooms) through their direct channels emphasising unique selling points. This strategy appeals to travellers seeking added value and unique experiences rather than simply the lowest rates.

Retargeting is another effective method for boosting direct demand. Travellers often browse multiple travel websites and OTAs before making a final decision, so staying top-of-mind is essential. Technology that delivers personalised ads based on visitor behaviour or past website activity can encourage prospective guests to return.

Estimates suggest retargeting can bring around 10 percent of visitors back to the hotel’s website, allowing for more direct bookings and preserving critical revenue that would otherwise be lost to third-party commissions.

Shape demand and align on commercial outcomes

The hotels that deliver the strongest commercial performance will be those that take control of how demand is shaped, not just how it is priced. This means making deliberate choices about where to invest, which segments to prioritise and how to convert demand in ways that protect both revenue and margin. It also requires tighter alignment across revenue, marketing and digital teams to ensure every campaign, offer and channel decision is working towards the same commercial outcome.

Written by Tracy Dong, Principal Industry Consultant, IDeaS. For more information on how your hotel can drive demand, please visit: www.ideas.com

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