Consumer travel trends and technology have shrunk the booking window; how can hotels capitalize on this 'shrinkage?'.
It's been just over a week since millions of Americans have returned to the post-Labor Day daily grind. And in spite of traffic-clogged trips to and from airports, misplaced luggage, delays, and weather that was less than cooperative, many may already be planning a short trip for the next long holiday – the Columbus Day weekend.
Or are they? That's a question whose answer has changed radically in recent years thanks to the rapid growth of the internet and mobile technology. Despite all-too-common travel stresses, today's travelers are increasingly booking their itineraries days in advance, not weeks or months out. We have, after all, enabled them to. According to a study by eMax Hotel Internet Marketing, the number of travelers who booked on mobile devices in 2011 jumped ten-fold from the previous year.
And it's not just time, but proximity too. A recent Priceline survey showed that 60 percent of customers with mobile web access booked their stays within 20 miles of their lodging. Of those travelers, more than a third confirmed bookings just one mile from their hotel.
But hoteliers can stay ahead of – and benefit from – the narrowing booking window by using technology that works smarter, not harder. Relying on human calculation or basic channels simply doesn't cut it when a traveler is only minutes away from their chosen destination and the revenue manager has decisions to make: both overpricing and underpricing can leave a hotel out in the "vacancy cold."
The only way to beat back the booking window is with a real-time automated pricing system. The vast majority of hotels run pricing updates manually from Monday through Friday, 9 a.m. to 5 p.m. But who is running updates during the other 128 hours in the week? Usually, it's no one. No one is around to assess the current conditions, booking levels, and inventory. And if no one is around to update pricing, then there will most certainly be a rate disconnect.
You can be sure that consumers are spending those hours scouring booking web sites for the best possible deals in the shortest amount of window. This emphasis on value and immediacy highlights the need to have "smart" channels with added features that can analyze data for a more accurate prediction of the best possible rates. We are all too familiar with today's great competition, and the many resources that consumers have to analyze rates themselves. And, as we all know, historical data simply isn't enough. What applied this time last year, in terms of rates, consumer travel trends, and our business needs, can be vastly different today.Work Smarter, Not Harder
With the use of an automated pricing system, revenue managers are able to manage pricing, as well as their entire inventory, in one place. Such a pricing solution can evaluate information, adjust inventory, and place the property in the ideal OTA page positioning to ensure the highest number of bookings at the highest rate possible. They can also update each online distribution channel and make real-time pricing changes automatically, leaving the revenue manager to oversee the process and work on developing the revenue management strategy that humans (and their strategic brains) are best at performing.
With the sophisticated technology of automated systems, optimal pricing can be determined quickly using traditional hotel and financial strategies. It allows hoteliers to keep their prices competitive and maximize bookings, while making their revenue managers more effective, and as a result, their hotel more profitable overall. Shrinking Booking Window Likely Here To Stay
By all accounts, the booking window is going to stay small and continue to contract. Economic uncertainty means that more travelers are waiting longer to make their final decisions. And as each new tech-savvy gadget is released and processing power grows, mobile devices will increasingly become the digital workhorse that laptops and PCs were decades ago. In short (pun intended), the short booking window seen in cases such as the Labor Day holiday just passed demands increased flexibility in the travel industry, flexibility best achieved through software that can maximize bookings received without the luxury of longer lead times we had in the past.
Some 426 years ago Christopher Columbus took nearly a decade to plan his trip to North America. Today's travelers are a lot more impulsive. Whether booked weeks in advance or a snap decision made between exits on the Interstate, it's clear that hoteliers need solutions to overcome the shrinking booking window. They need solutions that are immediate and automated, and can instantly pull together all the important data sets to determine the best competitive pricing today. About REVPAR GURUJean Francois Mourier is CEO and Founder of REVPAR GURU, a company that provides automated revenue and rate optimization solutions. REVPAR GURU's real-time pricing solution combined with automated online distribution helps hotels maximize occupancy and increase their profits. The company's Dynamic Pricing Engine, an integrated revenue optimization and pricing solution, adds unprecedented power and real-time adaptability to the pricing process, leaving revenue managers more time to run their hotels, make better decisions and do what they do more efficiently. You can reach Jean Francois through www.revparguru.com or by calling +1.786.478.3500.