Why hotel revenue managers should use event data to unlock revenue opportunities
What Hotel Revenue Managers Need to Know in 2021
As of August 2021, there are roughly 200 million vaccinated Americans, and every state but three have fully lifted their COVID restrictions. This is great news for domestic travel. Back in October of 2020, 46% of Americans said that they were less likely to travel within the US. However, that’s slated to change in the back half of 2021. As airports are getting busier, more and more people are following through with their postponed travel plans, visiting family and friends, or just taking advantage of the lessened restrictions. Whatever the reason, it’s still a highly dynamic demand landscape, and hotel Revenue Managers need to have as much information as possible around demand patterns to properly price rooms and ensure that they are achieving their profit targets.
One factor that we know is driving demand is events, which are making a huge comeback. From July onward, event recovery data shows more than 193 million people are attending accommodation-impacting events in the second half of 2021, meaning that these people are planning on attending events that will likely require them to book a hotel or overnight stay somewhere. While keeping track of those events in the past might have been more straightforward, capacity limitations and postponements have totally shifted the demand patterns that these events will drive.
PredictHQ estimates that there’s been about a 53% recovery rate for events, with more events being rescheduled daily to push that number even higher. At the peak of September 2021, our current predictions show accommodation demand drivers – like festivals, expos, and conferences – hitting over 77% of their corresponding 2019 rates. That kind of recovery across the nation suggests not just a return to normal on the horizon, but potentially an even more robust recovery in 2022.
What does this mean for the accommodation and hotel industry as a whole? It means we can expect to see huge volumes of displaced demand in the second half of the year. As more and more people are able to gather, there will be new travel patterns. Making the most of this recovery by leveraging intelligent event data will be a huge opportunity for hotel revenue managers.
What can revenue managers do to ensure they’re successful in 2021
Revenue Managers are always looking for ways to increase RevPAR. Being able to accurately predict demand for room bookings is a huge factor in maximizing RevPAR, especially if you’re competing with other hotels with tight margins. Here are ways you can prepare for demand in an unpredictable environment:
Make the most of dynamic pricing
Being able to adjust your room pricing to accurately reflect real-world demand is the best way to increase revenue opportunities. By keeping track of holidays, festivals, and other factors that lead people to book rooms, you can make the most of that booking curve and ensure that your prices are competitive. You can also run promotions or deals during lulls or slower periods in order to incentivize potential customers.
Keep track of local mandates and shutdowns
A good signifier of travel recovery is to understand local COVID-19 safety measures, as well as events occurring in your community. Knowing about health warnings in key locations can help you determine when you might expect to see a slow down in bookings. Alternatively, if there are lots of events being scheduled locally, it’s a great sign that travel and other leisure activities will be picking up as well, and can help you keep a pulse on general economic recovery.
Optimize labor and staffing
Ensure you are reducing operational costs when and where possible. If you know that a particular property might not see a lot of business for a month, you want to make sure you’re not scheduling bell hops and chefs if there won’t be enough patrons for them to serve. However, if you can foresee a big rush of bookings in a month, you’re going to want to hire enough staff and make sure they’re well trained to handle the upcoming rush of returning customers. Balancing these two is tricky, but essential if you want to maximize profit while minimizing operational costs.
These are just a few of the ways revenue managers at hotels can think about economic recovery and how to leverage intelligent event data through the end of 2021. However, the only certainty is that traditional accommodation forecasts need new, accurate data to keep up with post-pandemic trends. If you’re interested in learning more about how we work with Revenue Managers to help them accurately predict demand for bookings, contact us to chat with a demand intelligence expert.