In today’s environment, the travel industry is facing constant shifts in booking behaviour. From compressed booking windows to value-vying guests, how can you best adapt to these trends? We speak to Amadeus’ Vice President of Data Partnerships for Hospitality, Katie Moro, about the patterns impacting hotel distribution worldwide – and how you can rethink your strategy to capture available demand.
Click.: What should hoteliers keep in mind when deciding their channel mix during recovery?
Moro: It’s important to be everywhere right now, and there’s an opportunity at every touch point for you to win customers. It doesn’t have to be the same channels you worked with in 2019, either. Start to figure out what other channels you could leverage to reach more travellers. For example, Online Travel Agencies (OTA) are great for independent properties to increase brand awareness because they are in a good position to bring in travellers. Even if people book directly with a property, they still scroll through OTAs first to see what options are out there.
Properties should focus on starting, or expanding, relationships with channel partners that are strong, are doing well, and are going to help them cater to current trends. For example, Booking.com facilitates flexibility for its partners with various cancellation policies and we know cancellation flexibility is critical right now. As a hotelier, you don’t want to be on a site that has strict cancellation policies because the likelihood you will get booked there is slim. It’s important to ensure you’re partnering with sites that are aligned with what travellers expect based on what the industry has set as the standard.
Click.: What trends are you observing across different channels?
Moro: Based on our Demand360® business intelligence data, since Summer 2020 we see direct bookings are leading as the strongest channel. That’s never been the case before. There weren’t a lot of reservations happening at the property level, but that number has drastically increased. This is likely because people are really trying to gather as much information about a property as possible before they book it. Ultimately, this leads to booking directly. After property direct, we see a split of the online channels – whether that’s an OTA or brand website. According to our data, these are the three strongest channels currently.
There’s also been a huge shift in the booking window. In normal times, booking lead time is between 7-14 days on average, but now we’re seeing 60% of reservations coming in 0-7 days prior to arrival. We see it even stronger in the 0-3 day window, so very last-minute bookings. OTAs do very well in those 0-3 day windows, so it’s important to make sure you’re available and people can book you on all touch points. Understanding the lead time in your market and making sure you are available and priced appropriately based on those lead times is critical. That’s been the biggest shift and will require a change in how you run your business.
Click.: How can hoteliers best navigate and adapt to these shifts?
Moro: Last year Average Daily Rate (ADR) in the US went down by over 20% – that’s going to be a hard thing to recover from. A big part of what properties can do to maximise revenue right now is not drop their rate in hopes of driving demand. However, you have to stay competitive and if the market lowers its rate and there is demand, you’re going to have to follow suit in many cases.
It’s important to watch trends, but know you can’t really rely on historical data trends that are no longer relevant. It’s important to monitor recent data points or forward-looking data to inform decisions. Because the landscape is changing so rapidly, you can no longer use historical data to predict what’s coming.
Finally, consumers are seeking out more information than ever before, so ensuring your channels are up to date with the latest and most relevant information is crucial. Communicate with your audience across channels, highlighting important information that addresses topical concerns such as flexibility and cleanliness. Transparency is very important across all channels, not just your own website.
Click.: Looking towards the future, can we expect these trends to continue post-covid?
Moro: COVID-19 is ongoing, and the situation remains fluid and uncertain. We continue to monitor it closely and are working with our customers to find solutions to the challenges the industry is facing. As an organisation, our goal is to improve hotelier access to market insight and help them understand changes in traveller booking trends. This is also why using tools that leverage the most up to date, on-the-books data is more important than ever before as these are helping hoteliers to make informed decisions.
- Partner with sites that are aligned with what travellers now expect. For example, cancellation flexibility is critical right now, so you want to be able to offer various cancellation policies
- There’s been a huge shift in the booking window, with many last-minute bookings coming in 0-7 days prior to arrival
- With the landscape changing so rapidly, you can no longer rely on historical data to predict what’s coming. Look to recent data points or forward-looking data when making decisions
- Consumers are seeking out more information than ever before. Transparency is key across all channels during this time, not just your own website