For hotels looking to boost revenues in a recession-racked economy, there are two customer bases they can attack: the Department of Defense (DOD) and government travel sectors.
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Wednesday, November 17, 2010
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The Renaissance Schaumburg Convention Center Hotel ran a special promotion from December 2009 to October 8 offering government and military workers a discounted rate starting at $158 a night (down from the standard $169), along with free breakfast and high-speed Internet service.
To borrow a currently popular military phrase, the 500-key hotel, located in Schaumburg, IL, witnessed a surge in bookings in the first quarter, when more than 300 room nights were reserved through the promotion, reported Jeanette Ulepic, the Renaissance Schaumburg’s director of sales and marketing. That translates to a 20 percent uptick in bookings in comparison to the same time a year earlier. And that’s in an area where demand from military and government personnel is generally not high, Ulepic noted. After the first quarter, she said, bookings were flat in comparison to 2009.
Nevertheless, the hotel considers the promotion a success.
“Any opportunity we have to increase awareness of our hotel and also provide a benefit to a (customer) segment, like the government and military, is always a positive opportunity for us,” Ulepic said.
Individual hotels don’t necessarily have to rely on one-off promotions like the one at the Renaissance Schaumburg to call in the military. TDY Lodging, an online marketing platform, lists hotels located primarily near military installations and major cities, allowing those properties to get in front of DOD personnel and government workers looking for lodging while on a temporary assignment that can last anywhere from a few days to six months.
Matthew Foster, founder and general manager of Ventura, CA-based TDY Lodging, estimated that there are between 400 and 500 hotels, stationed in more than 100 locations in the U.S., in the system. TDY Lodging also inventories corporate housing and furnished and unfurnished apartments.
There is certainly no shortage of potential guests in this sector. According to the U.S. Bureau of Labor Statistics, 1.4 million individuals current serve in the U.S. Army, Navy, Marine Corps and Air Force.
In addition to military personnel, defense contractors and any government agency employee working under the auspices of the GSA (General Services Administration) are eligible for the government’s per diem rate for lodging accommodations. That per diem rate is set by the GSA and a link to the numbers can found on TDY Lodging’s website, www.tdylodging.com.
Per diem rates vary by city and month, but the base starts at $77 a night. For example, in the District of Columbia the rate was set at $211 in October.
“So it’s advantageous for the hotel owners to market their properties at the per diem rate,” Foster explaind. “That way, they can ensure they are getting the full amount of per diem. The travelers are happy as well because they are getting nice accommodations. And a lot of the hotels will throw in other incentives like free breakfast and access to local gyms to bring in military travelers and keep them coming back to their hotel.”
Foster, an Army veteran who launched TDY Lodging in 2001, contends that hotels that don’t market to military and government workers are missing out on a potentially lucrative feeder stream to their properties.
“What TDY Lodging is able to offer is a diversified marketing campaign for a lot of the hotels that are looking to get an additional customer client base that they wouldn’t normally get just from vacation or business travelers,” Foster said. “The DOD and government lodging market is definitely a large industry to be able to tap into and should be incorporated into every hotel’s marketing plan.”
Foster could not give any numbers on room nights generated from the site. He said that hotels marketed on the site have been “more than satisfied with the results.”
Another advantage to joining up with TDY Lodging is that owners pay a flat annual rate of $199 per hotel. There are no commissions or third-party booking fees.
“It’s very easy for a hotel to recoup that marketing cost,” Foster said, “and then make some profit on top of that.”