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There is something new about to hit the hospitality industry: a huge wave of deferred demand. On May 26, 2021, three hotel management software experts came together to discuss this very topic in a lively webinar. Hosted by Event Temple, with participation from Duetto and Mews, the webinar, entitle ‘Industry Recovery and Deferred Demand, Preparing for the Revenge Travel Wave’, tackled just how big the spike is, the challenges it brings with it, and how hotels can use tech to handle it.
Introducing the panelists:
The webinar began by discussing the current market conditions. As vaccines reach more and more people travel markets are recovering, things are starting to open up again, and the wave of deferred travel is starting to hit.
Duetto’s Lloyd Biddle kicked the discussion off by saying: “Duetto’s [Pulse Report] data is indicating varying stages of rebound across the global hospitality industry. The Americas are reporting occupancy percentages that are very close behind [pre-pandemic levels], near 60%, and while occupancies across EMEA are much more uneven, they are somewhat revived after lockdown measures were recently eased across some nations. What was witnessed during the spring break period in the US could be the crystal ball clarity the industry needs as it awaits a Memorial day start to the summer vacation travel periods this coming weekend.
“What jumps out to me in the Duetto data is on-the-books ADR performance. It is up 50% year-over-year from May through September, and that pricing power carries over for the balance of the year and into early 2022.
“Latin America’s on-the-books rooms are 43% ahead of the previous year at a 13% higher average daily rate. US pace remains just off the charts over the Memorial Day to Labor Day travel season with new bookings up by 81% compared to last month, with a 150% month-over-month increase.
“Finally, the story in the EMEA region is consumer search behavior for the May to September period. It climbed another 15% month-on-month after posting an 88% jump in the previous month. So that signals a lot of pent-up demand to travel as hotels are starting to fully reopen in Europe.”
Mews’ Joseph Lapka went on to reiterate Lloyd’s comments, commenting: “We’ve seen over the past 30 days, 250+ hotels reopening in the Mews portfolio. We’re fairly European-centric, so the trends have been a little bit slower because we know that in the US there has been a much faster reopening trend. However, we’ve seen in the last 17 days occupancy jump to almost 60% across the portfolio.”
Joseph Lapka went on to credit this rise in activity to the overall success of the global vaccination programs and more clarity from governments across the board, adding that the subsequent demand being seen by hotels is likely to last for some time.
Looking at how hotels can prepare for this spike in demand, Event Temple’s Dan Wood’s said: “Revenge travel is definitely a thing, and we are seeing it right now. People are done. They’ve been cooped up in the house for too long. They have money to spend and they want to get out and enjoy themselves, which is fantastic.
“Hoteliers are getting ready for this pent-up demand, and looking at clean technology they can put in place to be able to facilitate it, as we will continue to see these waves as each major segment returns.”
However, despite all this positivity, the panelists admitted it was not without its challenges. Just some of the obstacles raised included:
Dan Woods mentioned that hotels can navigate some of these challenges by investing in tech. He commented: “You find clean technology at a cost-effective price and you will see your revenue increase and show a dramatic ROI.”
Lloyd Biddle added: “The disconnect between anticipated demand levels - especially elevated over the summer months - and staffing is a hot industry topic right now. Staffing shortages and rising labor costs have always been the primary concern of owners and operators. And, while a hotel’s forecast is the main driver of revenue strategies, it is also the key input into the operational forecast that determines staffing levels. So it is important to revisit and possibly revise cost inputs into your rate forecast, such as variable room type costs or check on your cost per occupied room figures that influence your group rate quotes. There’s also room turn cost inputs into transient price optimization to consider.”
Access to clean data will be vital to hotels wanting to capitalize on this wave of deferred demand.
“It's so important to have technologies that seamlessly exchange data. We've got a great partner in Duetto, where data transfer is so easy that it’s visible and transparent to all of the different departments within a hotel, especially if you have to cross-functionally operate in different departments because of staffing shortages. It's even more important,” Joseph Lapka said.
Dan Woods added: “I think it's important for hotels to have a strong pipeline to support their growth and understand their analytics, which is why it's so important to work with RMS solutions like Duetto.”
Missed the webinar? You can catch the recording on-demand here.
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