NASHVILLE, Tennessee — Leisure demand behavior is a puzzle to solve, but hoteliers using their toolbox of resources hope to crack the code and help them navigate the uncertainty in the segment.
Some of those challenges include the shrinking booking window and restricted access to future booking data — something that means data experts and hoteliers alike need to get creative with how they are looking at their data, said Brannan Doyle, senior data analyst at STR, during a presentation at the recent Hotel Data Conference.
Doyle said that when he looked at year-over-year weekend — traditionally Friday and Saturday — demand change compared to week, there wasn't a huge difference between the two. However, when he factored Thursdays and Sundays into the weekend column, there was a starker difference in demand growth compared to weekdays. This means those bridge days sitting on either side of the weekend are seeing growth in demand.
"Thursdays and Sundays are growing at about 3% and 3.5%, respectively. While every other day of the week is seeing a demand growth of about 1.5% to 2.5% at the most," he said.
The other thing Doyle looked into was booking windows for leisure compared to business demand. For this, Doyle said he tapped into STR's historic occupancy data to paint a clearer picture of booking trends. What he found was surprising to him: Rooms were increasingly getting booked at the last minute.
"To say that two thirds of rooms are getting booked in the last month and that almost a third of rooms are getting booked in the last week — that was that was really a big revelation to me," Doyle said.
Leisure bookings, he said, are either happening well in advance or the week of.
"We see two guests and two different clocks and two different plans," said Diane Koczur, senior director of marketing at Evans Hotels. "One guest type is deciding on decisions 72 hours in advance. Others are settling on their trips a couple of weeks in advance. What that means for us is the booking curve is now defined by channel readiness, not just lead time."
This affects her marketing strategy, she said. The early bookers warrant email and loyalty campaigns, but the last-minute bookers can be targeted with mobile, such as social media or on artificial intelligence platforms.
Getting creative with the data
Paula Weissend, senior regional director of revenue management at Pivot Hotels & Resorts, said this shift in traveler behavior has forced her team to look at pricing strategy, rather than looking at a calendar and working on a traditional binary approach. She said she has to look at those Thursday and Sunday shoulder days and "price them as their own micro segment."
An added challenge is changes within hotel booking channels, which shouldn't be categorized in the same way as they have been in the past "when the traveler behavior has become a lot more fluid," she said.
"Distribution has become increasingly opaque," she said. "Channel information doesn't necessarily tell us the same as it used to years ago."
Now, traveler intent is more indicative than traveler type, Weissend said.
"If a guest is a business traveler or they identify as leisure, that doesn't necessarily tell me anymore how they'll book, their price sensitivity or what kind of experience they're looking for," she said. "So, understanding why they're coming — whether it's a concert, a conference, a wellness retreat, a family reunion — that can really give us a better insight into pricing and how to market to that."
Looking at the leisure demand drivers, such as sporting events, concerts or amusement parks, hasn't changed too much, but how travelers travel for these events and destinations have in some instances.
Doyle said he compiled data from properties near leisure demand drivers and bucketed these "leisure-coded properties" to see how they were performing, particularly during the time around spring break and Easter.
"When we look at the difference by that split based on the performance during a high swing in leisure demand, we can see that the leisure-coded properties are doing a little bit better so far this year," Doyle said, also citing the effect of the BTS concert on El Paso, Texas.
Weissend said her takeaway is that the industry is improving its ability to identify these one-off events and cater toward them specifically.
"The lesson here is really adaptability. A mega concert, a Formula One (race), a college football championship — all of those are all unique events, but they all have unique booking curves as well. And so you can't assume that they are all going to behave the same way," she said.
Koczur echoed the thought, adding that marketing for these guests requires agility too.
Navigating these evolving waters means data is more important than ever, and, consequently, having the right technology in place to process and review the data is key, said Victoria Noe, senior territory account executive at IDeaS.
"What what we want to do in the technology space is be able to take a lot of that really granular information and that data to then understand what the behavior is around those different trends that we're seeing in patterns, and the behavior is what is ultimately going to drive revenue," she said.
With a shorter booking window, hoteliers' annual pricing strategy might evolve too, although Weissend said it wouldn't necessarily be hugely impacted and hoteliers can make decisions along the way.
"I think of long-term pricing as being more directional, so I think of it like a GPS," she said. "The route is going to change based on traffic, but you still need a general direction and the destination to start out with."
Also like GPS, Noe added, the hoteliers with the best technology platforms in place are going to get to their destination faster than hoteliers stuck in the past with their paper maps and compasses.
While using data to make more informed decisions, the panelists cautioned against relying too much on historic data, which, Weissend said, neglects the fact that a market may have changed inherently.
Koczur recommended hoteliers use historic data "as a trend — it doesn't have to be the roadmap that you take going forward."
Finding the future traveler trends
With all this information on current traveler trends, Weissend said thinking of future traveler behavior is going to affect strategy. She said she's seeing more spend from the middle and upper-middle class with "less rate sensitivity, but higher sensitivity to service and experiences."
"I think the traveler who values an experience over a destination is where we're going to see the the largest growth," Weissend said. "We've seen a lot of small-tier markets have really outsized demand spikes that are hard to forecast or explain, and it is because people are traveling for specific events, a food festival, a chef tasting, a solar eclipse and ignoring a destination's inherent pull, so being more intentional with figuring out why that customer is traveling and being able to target them accordingly."
Taking note of these trends is increasingly important, Koczur said, especially when it comes to marketing toward these evolving travelers.
"The traveler filling today's demand gap is often not the same traveler as before," she said. "Success requires a different message, different channels and a different timing, not just a lower rate."