Keeping Resort Spas Busy with Conference Attendees

By Jim Vandevender Chief Marketing Officer, Knowland | July 02, 2017

With the hotel construction pipeline in full swing with more than 190,000 new guest rooms entering the US market over the next eighteen months, the race to fill all of those new rooms will be a continual and ongoing challenge. In addition, the hotels that already exist in those markets (many of which fall into the resort category) are bracing for the increased competition. Marketing plans, sales deployment and market segment strategies are being analyzed and in many instances reconsidered.

The challenge to fill rooms looms large for many hotels and resorts who are tasked by owners and management companies to maintain the pace that many properties have been enjoying with consistently high occupancy and ADR levels. If the rooms are not filled, available spa appointments go unreserved.

For the last few years, high occupancy rates have been driven by high demand. That is a great combination that had been buffered by a slow down in the hotel construction pipeline that started back in 2008 when banks began to hold back lending for hotel construction. That, however, changed several years ago, and the construction boom was - and is- underway. The effect of the construction pipeline is now beginning to show its effect when it comes to hotel and resort occupancy levels, and therefore spas may begin feeling it as well.

In 2016 hotel occupancy rates were almost flat showing little of the usual large increases that have become the norm over the last three years. According to STR, occupancy rates have seen year-over-year increases. These increases were fueled by demand growth's slightly outweighing supply growth. This is an important point when it comes to consideration of how to fill the room inventory that exists now. Supply rose 1.6% to about 1.8 billion room nights, while demand rose 1.7% to 1.6 billion room nights again according to STR published reports. Room supply was at its highest since 2010. Growth in demand has been, thankfully, outpacing supply growth since 2010. Occupancy levels, as a result, have been rising. The consensus among analysts seems to be, though, an expectation for this to begin changing in 2017 and into 2018.

New room supply, it is predicted, will continue to rise in 2017 and is estimated to be at a rate of about 2 %. Growth in demand will begin to ebb, according to analysts at a rate slightly less at about 1.7%. And looking at historical patterns occupancy rates will in all likelihood be affected with a slight downturn. So, what we expect is for occupancy increases to slow further as supply surpasses demand in terms of growth.

It isn't all doom and gloom by any means. Certain resort heavy markets are still seeing their numbers grow at a pace faster than non resort markets. For example, a recent article in the Sun Sentinel reported that Florida's Palm Beach County's occupancy rate was the highest in the state according to Discover The Palm Beaches, the county's official tourism marketer. Rich Basen, the senior vice president of marketing and leisure sales was quoted as saying that the destination is seeing noteworthy growth specifically in the groups and meetings market.

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.