Winning Revenue Strategies To Capitalize On A Banner Travel Year
Most forecasts and analyses say 2018 will be a boom year for global travel, including both business and leisure. The outlook for group travel in 2018 is murkier but probably stable.
A number of factors contribute to the optimism for 2018. A Goldman Sachs report forecasts 4% growth in global GDP this year, up from 3.7% last year. Growth is expected in most world economies, with China (+6.9%) and India (+6.3%) leading the way.
Recently enacted tax legislation in the U.S., as well as a political environment favoring fewer regulations on business, should lead to more optimism among corporate CEOs, which should spur additional business travel and perhaps more corporate meetings.
Likewise, increasing global prosperity will support strong leisure travel activity, especially from countries with emerging middle class populations, such as China and India.
And while the travel market continues to expand, its composition is also changing as younger travelers — millennials in particular — take center stage as the dominant demographic among business travelers. This group of road warriors — and those in other age groups who think like millennials — has specific wants and expectations from hotels.
Revenue managers and marketers need to develop dynamic, rational and actionable strategies to ensure their hotels receive more than their fair share of increased business.
Capturing Business Travel
A new survey from The GO Group confirms the notion of a banner year for travel and hotels. According to the research, 27% of respondents said they plan to travel more for business in 2018 than they did last year. A similar survey taken at the beginning of 2017 showed 15% of people planning more business travel.
Business travelers have different price expectations for hotel rooms depending on who’s paying the bill. Corporate travelers are less price-sensitive and often more driven by loyalty considerations. Entrepreneurs and others traveling on their own dime will often forego loyalty benefits in order to get the best rate.
Other corporate travelers are prone to booking rooms outside of their companies’ negotiated rate plans, again typically driven by loyalty considerations. A survey of business travelers in the UK showed that 70% of them booked outside of their corporate platforms at least once in the past year, and most of them turned to brand booking platforms.
For all these classes of business travelers, revenue managers need to have dynamic pricing strategies that appeal to their individual needs during various trip segments.
Many revenue managers, especially those working with sophisticated technologies, have a depth of knowledge about guests, especially business travelers, who might visit a location frequently. Such knowledge leads to the ability for RMs to personalize rate structures that will lead consumers directly to their sites and compel them to book.
Analytics can also provide revenue strategists with deeper profiles of first-time shoppers on properties’ direct channels, which can increase the chances the hotel can offer a personalized rate or package, even to an unknown guest.