The hospitality world is working hard to find its feet after a turbulent 18 months.
NB: This is an article from Fornova, one of our Expert Partners
It’s no secret that technology will play a central role in getting to grips with new feeder markets through targeted marketing and optimizing distribution, to achieve sustained revenue and profit performance improvement.
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1. Short booking windows
Despite more travel corridors opening in the last quarter of 2021, the uncertainty caused by Covid is set to continue into 2022 leading many travelers to wait until the last minute to book their holiday. This makes it even more important for hotels to continuously monitor and adjust their room rates and track their comp set to ensure they are always one step ahead.
Likewise, holidaymakers want to take on as little risk as possible when booking a trip. While 2021 was the year of free cancelation policies and flexible travel dates, we expect 2022 to herald an end to such open-ended travel, as the travel and hospitality industries attempt to regain some control.
Another change in guest behavior is the blending of leisure and business trips. We touched on ‘bleisure’ travel (also known as workcations) in our 2021 trends – and we fully expect this to continue during 2022. It provides hotels with an opportunity to upsell additional services during both the business and leisure phases of the guest’s stay and entice them to stay longer. Although after almost two years of lockdowns many travelers need little incentive to get out and explore!
3. Commercial collaborations
Hotel teams are having to do significantly more with less. Distribution, Revenue, and Marketing Managers are increasingly responsible for a wider share of properties compared to pre-Covid times, and they frequently have a smaller team at their disposal to deliver results. Yet, the pressure to increase net RevPAR and profit is unrelenting.
This is set against a backdrop of ever blurring lines between the three disciplines – largely driven by a broadening of services offered by distribution channels such as Google. Forward-thinking hotels are now seeking to combine these three functions into a highly agile and data-driven commercial team that can take a holistic approach to securing bookings and growing profit.
4. The Metasearch master
We predict that 2022 will be the year that metasearch engines, and we really mean Google, will make major strides towards leveling the playing field with the OTAs. Google has significantly expanded its offering for the hospitality industry. Guests can now easily book without leaving the platform, and hotels can advertise on a risk-free “no booking no fee” basis by opting for Pay Per Stay bidding instead of Pay Per Click. Furthermore, the recent introduction of continuous scroll on mobile devices could also influence hotels’ advertising strategies.
The main point to remember is that the growth of metasearch has accelerated. Hotels must have experienced people to manage metasearch if they want to successfully deliver a return on investment.
5. The Metasearch minnows
Following on from number four, as Google makes it ever easier for travelers to find and book great hotel deals and it expands the range of tools for hoteliers to reach guests, all the other metasearch platforms are literally being squeezed out of the market. Not all of them will survive, and we predict more mergers and acquisitions in this space.
6. Hyper local marketing
The recent surge in Covid numbers in several regions is likely to spur on the continued traveller preference for local and drive-to destinations. This has provided hotel marketing teams with a huge opportunity to increase direct bookings and corner the market on their doorstep. But, to do this, they need granular level insights into their target guests’ demographics and expectations. Using this data, they can build highly targeted campaigns to convert searches into stays.
7. Travel apps
This will be the year that hotels wake up to the need to go mobile – developing bespoke campaigns to win guests searching and booking on mobile devices, cell phones and especially apps. There has been a major boom in the use of mobile to book hotels. Summer 2021 saw mobile contribute 60% of all revenue and mobile traffic came in at 77%. This unprecedented growth is expected to continue, so to capitalize on it, hotels must invest in technology that allows them to track in-app competitor rates as well as their own distribution performance on mobile apps, i.e.parity and rate integrity where consumers actually view prices – and move away from data platforms that only provide desktop insights.
8. OTA commission rises
While new strains of Covid-19 may be throwing travel into chaos in the short term, hoteliers remain cautiously optimistic that the returns seen in the summer of 2021 will continue. With that, demand for OTA services to promote hotels in key feeder markets will also increase. As OTAs become ever more dominant, hotels are likely to end up paying more in commission than they did in 2019. In the race to be ever more visible, the OTAs are expanding their offering – helping hotels to segment both the audiences they want to target and the timeframe for campaigns and promotions – now offering extended campaigns of up to six months. Hotels need to balance the cost of these tools with the return on investment.
There’s little escaping the fact that hotels cannot rely on what they have always done before, if they are to successfully claw back the revenue and profit lost as a result of the long pandemic. Reshaping distribution, teams and empowering them through technology is central to breaking down silos and delivering the end-to-end strategic data-based oversight that is needed to identify opportunities, effectively target markets and gain a competitive edge for the longer term.