Over the past months, I’ve witnessed with almost incomprehension the changes the COVID-19 pandemic has forced upon our industry. From operational standards to accounting practices, forecasting methodologies to budgeting scenarios, multiple segments to one dominating segment and remote sales efforts to heavy reliance on digital marketing — nothing is the same. And so, it’s no surprise that traditional revenue-management approaches are no longer sufficient.
I continue to be impressed by so many organizations that have made it their mission to find ways to help us all better understand consumer sentiment and buying behaviour. The wealth of information available is staggering and kudos to the countless companies that have gone out of their way to provide stay-safe guidelines and planning-for-recovery roadmaps, not to mention the 24/7 statistical overviews that help us understand today’s reality and tomorrow’s challenges.
But, in all of this is the reality of information overload — as if we didn’t already have a lot of data from which to make better decisions. So, as I continue to wade through what seems like an ocean of information, I’ve tried to isolate those pieces of market intelligence that will most effectively support decision making. Although this is different for every hotel, there’s a globally applicable approach to search out resources. I see these data sets in concentric circles, going from macro to micro; the outer-most ring representing macroeconomic trends and the inner-most ring what’s happening in your backyard.
Let’s start with that outer-most ring. For example, at the recent virtual Hotel Data Conference, one presenter shared valuable insights on U.S. travel spending, GDP statistics, unemployment figures and recovery forecasts. Although no one has a crystal ball, the data presented will most certainly assist in the 2021 budgeting process. I’m not suggesting that, as revenue managers, we don’t pay attention to macroeconomic information, but we really have to be “glued to our screens” this year when it comes to understanding the bigger picture.
For example, we keep reading about phases of how business will return — the initial phase being domestic-leisure drive and domestic-leisure fly, et cetera. As a lens on the broader picture, that makes sense. But I, for one, certainly didn’t know the details around the U.S. balance of travel; that there were some 97.5-million outbound departures in 2019 and 78.9-million inbound arrivals. The presenter suggested, if Americans aren’t making international trips because of border closures and COVID-19 restrictions, then there are potentially about 19-million more U.S. travellers who may take a domestic trip. That figure certainly makes for interesting demand clues.
Now, let’s take a step into the next concentric circle and ask what’s happening in my region? I recently attended a weekly revenue meeting during which the team examined feeder markets in detail. They asked and answered questions about COVID-19-related travel restrictions to/from those markets; shifts in school-break schedules; weather patterns; airlift; and TSA statistics. They accessed travel-pattern data from the U.S. Travel Association and traveller-sentiment survey data from South Carolina-based Fueltravel.com.
They also took a look at Skift’s Recovery Index, which accesses and consolidates data from 10 different sources, six of which are not in wide use by revenue teams. For example, one data source is Arrivalist, which uses “mobile location datasets to provide actionable insights on consumer behaviour, competitive share, media effectiveness and market trends and has been tracking driving behaviour of U.S. residents.” There are lots of demand clues there, too.
Finally, let’s examine that inner most concentric circle — the one that applies specifically to your own backyard. The traditional data sets certainly form part of the clues to demand trends. Reports such as room-night production by channel, market-segment trends, rate shops, STR market-share reports, lead-time statistics, length-of-stay patterns and regrets/denials.
But now, in these COVID-19-induced times, this revenue team was also paying much more attention to search stats, for what dates, for what lengths of stay and with what level of conversion? They examined rate progression over time to determine if there was rate stabilization and paid particular attention to shifts in booking lead times, so as not to inadvertently make “knee-jerk” reactions to demand levels that had not yet fully materialized. They looked at average rate and average spend by zip code and, at one point, compared search statistics year over year to see just how different consumer research was being conducted pre-COVID-19 compared to post-COVID-19.
The team determined that, for many arrival dates, conversion ratios remained strong, so they knew price was not the issue. They utilized a heat map in Power BI to further identify booking trends and accessed market intelligence from both Airdna and Transparent to enhance their understanding of the impact of alternative accommodation. Finally, with a recent subscription to ForwardKeys, they examined data that predicts travel patterns based on booking transactions, so that they might better monitor and anticipate shifts in traveller intent.
I have to emphasize that by mentioning several vendors by name, I’m not inferring advocacy — I’m simply saying that during these unimaginable times, we have to broaden our scope when searching for demand clues. The bottom line is to research the available data sources and determine which ones make the most sense for your market and your hotel. Clearly, there are myriad resources choices; the ultimate objective is to fish where the fish are. And, finding the best fishing spots means searching comprehensively for demand clues.
Bonnie Buckhiester is the principal of Buckhiester Management, a North American revenue-management consulting firm serving the hospitality industry.She was recently named one of the Top 25 Extraordinary Minds in Sales, Marketing & Revenue Optimization by HSMAI. She can be reached at buckhiester.com.
