In June, July and August, as vacation business fires up summer resort towns throughout the U.S., hotels in south Florida find themselves getting the cold shoulder from visitors seeking destinations to escape the heat. While revenue managers have plenty of ways to turn up the temperature, deciding which tools to use without compromising rate integrity or running afoul of contractual obligations can cause even the most seasoned hoteliers to reach for a sweater and wait until business warms up again.
As the post-Labor Day slump approaches, resort area hotels can take a page from Miami's
playbook and keep the heat on for a little while longer.
Historically, the Hilton Downtown Miami did not engage in OTA promotions. But as Alex Molgora, the new director of revenue management, faced his first summer season since joining in October 2013, he decided it was time for a change in strategy. Using packages and promotions, he was able to increase overall room revenue by 84 percent.
"I saw an opportunity to increase our room revenue and length of stay through our OTA partner, Expedia," said Molgora. "After reviewing the possibilities, we determined that we could build a base by offering tiered discount promotions and activating our package deals. This resulted in amazing production and growth in our package business. (Up 284 percent YOY) We've picked up an additional 5300 room nights, and our total occupancy has increased by 93 percent."
Summer is peak U.S. travel season for Europeans using their extensive vacation time and South Americans who are in the middle of their winter season and don't mind the heat. (For example, in July 2013, there were nearly 50 percent more French visitors to the U.S. than the yearly average, according to OTTI data) Using that basic premise, one South Beach hotel employed a simple, targeted sale strategy to boost business.
“In the past, we had accepted that late May and June bookings would be slow, because it typically is for this market,” said James Anderson, Sales & Marketing Director, of the 108-room, Art Deco-style Dream Hotel South Beach. “This year, we decided to test a sales strategy with our online partners, and it really worked well. We participated in a seasonal sale targeting our softer demand dates through the summer, with pricing promotions linked to length of stay. Our market manager pointed out how participation would not only capitalize on a big part of the domestic booking window, but also the peak travel window of various international points of sale, like July for the U.K. market and August for France. Expedia really ran with it, promoting it heavily and also offering double reward points. During the 21-day booking period, the initiative brought in more than $42,000. We also maintained rate integrity and rate competitiveness so we did not run afoul of any other contractual obligations. We never expected such great response in late May and June.”
The Catalina Hotel and Beach Club employed a mobile-only strategy to boost needed midweek business in hopes of turning nearby bargain hunters into regulars.
“In preparation for our dreadfully slow South Florida summer, we wanted to increase our exposure without taking a huge hit on ADR or risking a higher cancellation rate," said Lauren Koston, E-commerce Director, Catalina Hotel & Beach Club. "Expedia built us a non-refundable, mobile-only room type that we could fully control through our channel manager. We noticed that by offering even the slightest discounts off of our retail rates as needed on mobile, we were able to increase our summer conversion rates significantly. This boost has not only been especially helpful with our weekday business (which is a constant challenge), but has helped us to capture new drive market consumers who are more likely to become repeat guests.”
The mobile strategy gave the hotel a 29 percent week-over-week revenue boost for the duration of the sale.
Open the Throttle
Nayed Sarcos, director of sales for the Courtyard by Marriott at Aventura Mall, left no stone unturned to drum up summer business and nearly doubled her revenue.
"Since we implemented new strategies with the international market, length of stay and advance purchase promotions, our revenue coming from Expedia has increased 96 percent YOY, and 49 percent of those bookings are from promotions," said Sarcos. "It has been such an eye-opener to work closely with our account manager and see what happens when we make sure every possible promotion that fits our hotel is open and available to our guests."
"Sharing ideas and resources is one of the many benefits of working with a global network," said Marc Scholey, Expedia area manager, Miami. "Our partners and our team of market managers are a tremendous resource to one another, and everyone benefits when we collaborate."
About Expedia, Inc.
Expedia, Inc. is one of the world’s largest travel companies, with an extensive brand portfolio that includes leading online travel brands, such as:
• Expedia.com®, the world’s largest full service online travel agency, with localized sites in 31 countries
• Hotels.com®, the hotel specialist with sites in more than 60 countries
• Hotwire®, a leading discount travel site that offers opaque deals in 12 countries throughout North America, Europe and Asia
• Egencia®, the world's fifth largest corporate travel management company
• eLong™, the second largest online travel company in China
• Venere.com™, the online hotel reservation specialist in Europe
• trivago®, a leading online hotel metasearch company with sites in 45 countries
• Expedia Local Expert®, a provider of online and in-market concierge services, activities and experiences in hundreds of destinations worldwide
• Classic Vacations®, a top luxury travel specialist
• Expedia® CruiseShipCenters®, one of North America’s leading retail cruise vacation experts
• CarRentals.com™, the premier car rental booking company on the web.
The company delivers consumers value in leisure and business travel, drives incremental demand and direct bookings to travel suppliers, and provides advertisers the opportunity to reach a highly valuable audience of in-market consumers through Expedia Media Solutions. Expedia also powers bookings for some of the world’s leading airlines and hotels, top consumer brands, high traffic websites, and thousands of active affiliates through Expedia® Affiliate Network. For corporate and industry news and views, visit us at www.expediainc.com or follow us on Twitter @expediainc.