Almost a year ago, the Pandemic changed the narrative in every aspect. Across the hospitality, ecosystem hotels had to undergo the exercise of number crunching and reviewing multiple scenarios to arrive at a future outlook. The stakeholders such as the investors, the owners, management companies and many others want more clarity.
The entire exercise is complicated further with the ever-changing policies and re introduction of lockdowns in many places. While some cities have enjoyed businesses returning to normalcy, it comes with its share of uncertainty that fluctuates with every single change in the pandemic story.
Business on books even in current months have sometimes disappeared by 30% or more if the number of cases reported in a city/destination has gone up. It creates a highly uncertain situation that is difficult to forecast.
Is Data Obsolete
One of the most common discussions within the management circles for at least a year has been about the relevancy of past data sets to project trends, comparing performances and gaining a foothold competitively. Rather many felt that the existing data sets have now become obsolete. It has been a prevalent sentiment whenever hotels prepared forecasts/budgets or presented a strategy.
To a great extent, the sentiment resonates –
- There is no basis of comparable performance – year on year pace is irrelevant • Customer and segment mix has changed and will continue to evolve as markets open • Channels of distribution are not as weighted as before – Some exert more influence • Booking behavior is now different and requires total flexibility
- Customer preferences have changed – Is your hotel in sync with customer behavior?
The fact that every exercise including pricing, and forecasting has fundamentally been based on comparative past data has led many to believe that the datasets are unusable. What current datasets can be used?
The Green Shoots
In recent months, destinations that have eased regulations and have been open for tourism have seen their hotel occupancies climb up. Regions and Countries where domestic demand is a driver have seen hotel occupancies climb upwards due to lack of government restrictions. Destinations that are primarily leisure-oriented have seen healthy occupancies in recent months. How did they fare comparatively with previous years data?
In a recent conversation I had with Gino Engels Chief Commercial Officer at OTA Insights, it became quite evident that the key in looking at meaningful data was to start examining trends wherever markets had opened up, and international travel was still valid. According to Gino leisure destinations, such as Dubai, Florida, and many other locations had started building pace 3-months in advance for summer and winter periods last year. OTA’s and Meta’s were key performing distribution elements in delivering healthier occupancies.
The data will always tell a story, whether aggregated or disaggregated. It will be critical for revenue heads to spot these green shoots, identify the micro-segments within a larger segment and extrapolate the data points to build a narrative. Identify the channels being used to book and construct a strategic case that helps project, manage and grow the demand.
Data and Data
There is no scarcity of data points used to build simulations and narratives to construct a strategy. The revenue heads will need to dig at many fronts across a host of data points to put together the story, as the reasons to travel have changed. An easier way to understand is to view data in different categories.
What are the emerging trends, and can they be aggregated? Seek out market intelligence about future pace across different dimensions, such as length of stay, preference for accommodation type, etc.
- Examine hotel search data from metasearch, OTA and other different sources, and adjust strategy accordingly
- Look at all forward-looking data from flight searches, etc. and get an understanding of the volume of travelers expected to travel within your market
- Has your comp-set changed? Is it dynamic? Do not be limited to a pre-COVID static competitive landscape. Measure rates and availability against a wider selection of the competitors, which includes alternative accommodations
- Understand consumer sentiment and social behavior by scanning all platforms
Is there an existing customer database? Deploy your customer data for a competitive advantage. Seek feedback from your customers and cater to their needs by building appropriate experiences as their reasons to travel change. Be ready to reach out and communicate with them.
There is always something to compare. Spot the emerging trends and if the situations are comparable to any past event. Understanding various historical trends that could become comparable is key to plotting the way forward.
Above all, stay agile, be flexible and be ready to develop a Green Shoots Strategy.