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At What Occupancy Rate Are Hotels Most Profitable?

Seven trending hotel news stories that will impact your hotel Revenue Strategy.

1. How to strike the right occupancy, rate balance

As smart revenue strategists know, maximizing occupancy isn't their goal; maximizing profitability is, and that requires striking a proper balance between occupancy and rate. As STR numbers show, at most hotels there are diminishing profit returns once the property reaches a certain occupancy level, unless average rates are increased.

While an owner might like to see 98% occupancy every night, it's the revenue manager’s job to communicate how a slightly lower occupancy at a slightly higher rate actually puts more money into the owner’s pocket.

The article offers a lot of astute viewpoints on the topic, but the final message is that this balance differs from property to property, and DORMs must consider a variety of data points and performance goals to reach the correct point.

Full story at Hotel News Now.

2. Expedia executive extends olive branch to hotels

In a recent interview, a top Expedia executive pointed out how the company is partnering with some hotel companies—Marriott Vacations, Red Lion and Best Western, for example—on disparate initiatives to drive business both to Expedia brands and to the hotels. But he was coy about loyalty members-only rates promoted by some brand companies. He seemed to understand the reasoning behind the strategies but also believes them to be more of a PR move that won't yield long-term success for the brands and their properties.

Another underlying theme of the interview was online travel agencies’ ongoing wariness about Google and its long-range plans for the distribution sector.

Full story at Tnooz.

3. Why email marketing still matters for travel brands

Email is a better marketing tool than some people might think, according to a new analysis of 3 billion email opens from travel brands to U.S. consumers over a three-month period between July and September. The takeaway from the research is that email open rates are highest on mobile devices, and smartphones in particular.

Nearly 70% of emails delivered to mobile devices are opened, with a 55% open rate for smartphones. Open rates are considerably lower for tablets (14%) and desktops (31%). Day of the week makes a difference, too, with overall open rates highest on Saturdays.

Quality sometimes wins over quantity. In this case, the longest "read rates" are on desktops, with 55% of reads lasting 15 seconds or longer.

Full story at Tnooz.

4. 5 ways to improve your AdWords strategy

While a little geeky, this story provides some excellent advice on formulating a Google AdWords strategy to maximize eyeballs and bookings:

  1. Explore audience retargeting;
  2. Use structured snippets;
  3. Track booking conversions once the process moves offline;
  4. Understand the days and times when your customers are searching and adjust your ad scheduling accordingly;
  5. Use Google's call-tracking technology to better attribute bookings to specific ad campaigns.

Full story at Tnooz.

5. Actionable data is key to succeeding in the next downturn

Many hoteliers agree an industry downturn of some measure is approaching. The smart ones understand that, unlike past demand slowdowns, it's important this time to be rigorous in rate and distribution strategies. And the way to do that successfully is to rely on actionable data.

As one panelist at a recent conference said, it's important to break down data silos so hotel departments can work together to beat the downturn. As he said, “You only get meaningful data when systems meet up.”

Another theme of the discussion was the use of value-adds through personalized pricing and more basic tactics such as providing freebies to guests instead of lower rates.

Full story at Duetto.

6. Marriott clarifies brand strategy: All 30 to stay

In a wide-ranging interview about the company's plans in the wake of its acquisition of Starwood Hotels & Resorts, Marriott International Global Brand Officer Tina Edmondson claims the merged company will keep all 30 brands inherited from the two organizations. She further commented on how Marriott plans to organize and market its new brand lineup:

  • The company will group its eight luxury brands into two categories: “classic luxury” to include Ritz-Carlton, St. Regis and JW Marriott, and “distinctive luxury” to include the remaining five, such as Edition and W Hotels.
  • It plans to retain its 3 soft brands (Autograph Collection, Luxury Collection and Tribute) as well as Design Hotels, the looser affiliation of independent properties.

Full story at Bloomberg.

7. Expedia joins Kayak in voice activation

Expedia last week launched a partnership with Amazon that enables some voice-activated commands on Amazon's Echo and Echo Dot devices. Consumers with the devices can ask Alexa—the voice in the box—about their existing Expedia flight reservations, book a car rental or inquire about their Expedia loyalty program numbers. In the future, the service will extend to flight and hotel bookings.

Six months ago, Priceline Group announced a voice-activated “skill” for its Kayak metasearch site that allows consumers to ask Alexa to check flight, hotel and car-rental prices, but not yet make bookings.

Full story at Skift.

Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.


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Duetto Content Team

The Duetto Content Team is made up of some of the brightest minds in the hospitality space. Through a mix of blogs, videos, whitepapers, social media posts, email campaigns and more, we focus on developing brand and product awareness, lead generation, engagement and more.

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