As the dust settles and the sun begins to rise again on the hotel industry, it is clear that hotel sales and revenue management will be different than it was in 2007, the last good year before the industry and economy tanked! 

This time the differences will be driven by customer behavior in all segments. "The way consumers think about, plan and purchase travel has altered dramatically."(Peter Yesawich, HotelNewsNow, 11/17/10)

The good news is that according to a Trip advisor survey "…Ninety percent plan to take two or more leisure trips next year—a slight increase on the 89 percent who said they have done so in 2010."  However, the bad news is that "… travelers named an increase in online travel deals as the best travel development of 2010 (39 percent)" (HotelMarketing.com, 11/10/10) 

Once upon a time, hotel sales people could pump the phones and it was a numbers game.  Now hotel sales people need to be more precise about who their potential high value customers are and how to reach and approach them.  It's the difference between firing scattershot and hoping a duck flies through or a shotgun approach, with apologies to Sara Palin's Alaska!   

Revenue Managers used to analyze reports, open and close rates based on demand. The RM is now also a revenue generator.  Now the RM also needs to take into consideration the net after commissions and costs on each channel, which channels to push out which rates in order to follow the elusive customers' preferences for receiving information and rates across multiple channels.   "When seeking information, the most popular sources are brand websites, search engines and travel-related websites. … " (Epsilon Survey, Hotel News Now, 10/18/10)

Consumer Behavior Changes in Leisure Travel: 

 Leisure came back in 2010 but as the surveys above indicated, rate trumps location but when in doubt they go to review sites or get recommendations from family or friends.  

Brand Web Sites. The issue is how they locate the ‘online deals' that they are so fond of?   If brand websites are one the first places they go, how does your web site optimize to appear on the mobile phones that consumers are increasing using to access info?  Remember, a large consumer group uses the iPad or iPhone and Apple doesn't like flash.  If your site uses ‘flash' maybe the hotel should have its own mobile app with a reservation engine or direct link to the one on the web site. 

Search Engines. Then there is Google – where does the property come up in a destination search and as an online travel site with hotels and rates appearing on maps.    Where does the hotel appear on other search engines and does it make sense to launch a ‘pay per click' campaign as most consumers never get past page three if they go that far.

Travel Related Web Sites.  Love them or hate them, OTAs are not going away.  Revenue managers now have to worry about SEO on a number of different channels.    Expedia, the object of much industry resentment, is still the Big Dog.  If Google becomes an OTA, i.e., expands Google maps with hotels & rates and begins to offer air through its acquisition of ITA, there will be consolidation.  Priceline has become the ‘go to' channel for many consumers to check and see if a better deal can be had than on brand web Sites or other OTAs.

Review sites and Recommendations.   Trip Advisor still rules but at least hotels can reply to reviews on the site.  In seeking out recommendations, most consumers are not making  a phone call – they are checking out FaceBook posts, Tweeting their experiences,  asking for feedback on social media and texting their family and friends.  The property's social media presence is an important factor and social media monitoring is critical going forward.

Consumer Behavior Changes in Corporate Travel. 

Corporate travel is returning according to all indicators.  Hotels are pushing rates as demand in this sector increases.  However, many companies are demanding free internet access and breakfast, the two most compelling amenities in a hotel selection, as part of the package. Free internet access is "becoming a piñata everyone is swinging at" in negotiations, writes The New York Times. (HotelMarketing.com, 12/02/10)

Pricing Models.   IHG is rolling out a dynamic pricing model, a concept that was abandoned at the beginning of the recession.  They are offering a negotiated percentage off of Best Available Rates versus the RFP model of flat rates. Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, predicted that the average corporate hotel rate would rise about 4 percent in 2011, with increases varying greatly. (New York Times, 11/29/10)

Trading Down. While corporate demand is increasing this year, there is still pressure to maximize travel budget and one amenity that does that effectively is breakfast.  "To hold down hotel spending in more expensive markets, nearly half of the companies in the United States will probably require some employees to downgrade from full-service to select-service hotels, Mr. (Bjorn) Hanson said." (NYT, 11/29/10)

Consumer Behavior Changes in Groups. 

The U.S. Travel Association forecasts a 7% increase in meeting and convention spending this year, to $90.7 billion. That follows a 15% decline.  However, that still means that groups were down by 8% -- hardly the robust increase in demand as seen in the other two segments.  However, anecdotal evidence suggests that groups are booking and not cancelling with the same frequency as they did but they are booking smaller groups with shorter lead times.  

Venue Selection.  A survey of meeting planners in an i-Meet webinar indicated that 70% rated social media as very important in venue selection.    How well is your property presented on FaceBook and LinkedIn?  How professional is your personal profile on LinkedIn and on FaceBook? If your customers are checking out the property on social networks they may also be checking out your profile/pages before they return your call. 

Rate Negotiations.   Meeting planners are still looking for value (notice I didn't say rate).  By building in value adds and dollarizing them, the planner feels they have gotten a good deal.  Planners know that this rate climate for group business won't last forever and are trying to negotiate deals for future meetings.  

The Reliability Factor.  Meeting planners are still a little gun shy about using properties they have not used before.  They are not only checking out the property but asking for referrals and recommendations from other planners.  Hotel sales people can mine their databases not only for repeat business but also to ask for referrals to other planners that they know.   Shot gun versus scatter shot approach! 

Hotel sales and revenue managers should be excited with the increases in demand and the opportunity to find prospects where those prospects are finding them!  2011 will be a year that will see new changes in consumer behavior and those that are poised to take advantage of these opportunities will be the big winners!  

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