New Approaches to Filling the White Space

By Robert King General Manager, Travel & Hospitality, ClickSquared | May 05, 2010

Vacancy rates in the travel and hospitality industry are filled with peaks and valleys. There are times of almost insatiable demand, and other times when you seemingly can’t give your product away. Hoteliers across the industry grapple with this, although depending on geography, time of year, or day of the week, the challenges can be as unique as the properties and locations themselves.

For instance, natural demand patterns for an urban hotel may be business-oriented, which means high occupancy from Monday through Friday, and low occupancy on weekends. For leisure destinations, it’s usually mid-week that poses the greatest challenge. Tropical beach destinations and mountain resorts both thrive in the winter, and tend to struggle in the summer. While autumn might be a peak-season money-maker in fall foliage locations, it is typically a “shoulder period” struggle for many – especially those affected by “Hurricane Season”. Destinations that rely on family travel ebb and flow with the school calendar. You get the idea.

This spikiness in demand patterns, together with fairly fixed capacity (and “perishable inventory”), has always been a challenge in the travel industry. It is no wonder that the science of revenue management was largely forged in this sector. That said, the low periods may actually offer the greatest opportunity for financial upside.

The Direct Marketer’s Call to Action

If you think your only strategy for filling rooms during low-demand periods is to deep-discount the price, think again. The challenge of optimizing revenue in the low season is NOT just the burden of the revenue manager, or the responsibility of group sales.

Because of the insights that can be gained from understanding past guest behavior, and the opportunity to customize communications to specific individuals based on that understanding, the direct marketer can play a key role in driving profitable revenue during periods of need. Fully leveraged, your customer database is a treasure trove of marketing opportunities. You know who may be pre-disposed -- even prefer -- to travel during the low seasons. You know what type of messages they respond to, and when they book. You know your customers’ preferences and purchase behaviors, and can marry those insights with the unique benefits that your property offers even during the low season. You can pinpoint where your marketing efforts will have the most impact; and conversely, what and who to avoid. To be sure, direct marketers can play a huge role in optimizing RevPAR that can make these quiet periods more profitable.

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Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.