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.