A recent study by D-Edge into European hotel distribution trends found that the average length of stay in hotels fell by 12% between 2014 and 2018.
So how can hotel managers adapt their channel distribution strategies to counter the negative impact on occupancy rate?
One effective tactic is to focus on attracting international clients
On average, non-domestic guests stay for longer, reserve further in advance, cancel less, and spend more in their destination – helping hoteliers increase profitability.
Bedbanks act as wholesalers by offering hotel capacity to tour operators, airlines, travel agencies and other companies looking to provide accommodation to their customers. They can help you sell hard-to-place beds and bring in higher-value customers.
Fortunately for hoteliers, this distribution channel is on the up. According to the same study, bedbanks and wholesalers have grown their volumes by over 100% in the last five years.
1. International guests offer high value
Long-haul guests tend to have bigger budgets than domestic travellers, but the benefits don’t stop there.
As Carlos Muñoz, Hotelbeds Managing Director, points out, “Guests travelling from non-domestic source markets complement the hotel’s current distribution mix with customers whom they aren’t currently able to access easily. What’s more, our channel provides them with guests that typically pay a higher rate, cancel less, stay for longer, spend more at the hotel and come back more often – because bookings from B2B travel intermediaries such as tour operators, retail travel agents, airline websites and loyalty and point redemption partners all provide higher-value reservations.”
Join trusted global networks that expose your rooms to international clients
Not only is it time-consuming to research new markets, but traversing the cultural nuances in each new locale is complicated. Exploiting existing global platforms and networks reduces this complexity, leaving you more time to focus on customer experience.
Bedbanks like Hotelbeds can connect you to organizations that would be complex or too expensive to reach on your own due to their global reach, better connectivity and simpler processes.
2. Non-domestic guests stay longer and can increase your occupancy rate
Longer stays reduce front desk costs and other operational expenses like laundry, and housekeeping. They also increase the possibility of cross-selling ancillary services like room upgrades and transport. Choosing the channels that typically drive longer stays can help both maximize profit and optimize room allocation.
Hotelbeds was named the channel that provides the longest staying guests at an average of 2.77 nights. Hotelbeds offers hoteliers in Europe the longest average guest stay when compared to any other booking source, including a hotel’s own website.
Test different length-of-stay (LoS) restrictions for international guests to gauge how customers react to different minimum stay durations.
Consider running these tests in low season to minimize impact in more popular periods.
3. Long-haul clients cancel less
Cancellations, “no shows” and curtailment (when a trip is cut short) have a significant impact on the books. But beyond the financial repercussions, each of these scenarios represents a missed opportunity to leave a positive impression on the customer. Business travellers require comfort and proximity and offer valuable repeat opportunities for hotels situated near global headquarters that provide this.
Be aware of the cancellation policy expectations in overseas destinations.
Today, many leisure and business travellers have come to expect free cancellations. So, partnering with businesses or intermediaries that link you to clients with low cancellation expectancy is vital to make sure your occupancy rate doesn’t suffer.
4. Longer lead times let you research clients’ needs
Longer lead-times provide hotel owners with many benefits. Beyond the cash-flow advantage or the ability to anticipate staffing schedules more cost-effectively, longer lead times allow you to spend more time understanding the profiles of your customers. This gives you a better opportunity to provide them with a memorable experience upon arrival and foster loyalty in the long term.
Use longer lead times to better understand the profiles of your customers.
While it’s difficult to predict the needs of guests from diverse cultures, you have more time to survey their travel requirements before their stay. By understanding what each guest needs, the hotel is much more likely to succeed in cross-selling them a service, and by extension, gain their loyalty.
5. Increased stays drive higher spend in destination
Ancillary services are supplemental products or services that a hospitality brand can upsell in addition to its “core” hotel experience.
The longer a guest stays at a hotel, the more likely they are to consider these types of services. Hotels can enrich local experiences for travellers by employing the expertise of assistants offering services like:
- Concierge meet and greet on arrival
- Information on local infrastructure, services and transport
- Interpretation / translation services
- Booking of tours, tickets, attractions, events, transfers and car rentals
- Local guides with insider knowledge of culture, lifestyle, sports and traditions
These advantages can turn out to be critical to help your hotel recover from a critical situation. Unfortunate and unforeseeable circumstances can undermine the stability of every hotel, as the travel industry is often the first to be impacted. As we have learned from every crisis though, downtimes are always followed by an upturn and targeting guests that can offer you a better opportunity to recover faster can be crucial.
Consider promoting ancillary services through a loyalty programme as one of the options when clients redeem points. The psychological barrier to “cashing in points” is lower than that of “spending my budget”.
Want to learn more about how different channel distribution strategies can improve your hotel’s occupation rate?
Check out the Hotelbeds guide to hotel distribution in 2020 for a comprehensive look at the year ahead.