STR: Inflation-Adjusted ADR is ‘Mostly Flat’

by Jason Q. Freed, Managing Editor | September 24, 2018

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

1. Record Demand, But ADR Pressures Tell the Story

The U.S. hotel industry reported positive results in the three key performance metrics during August 2018, according to data from STR. In a year-over-year comparison with August 2017, the industry posted the following: 

  • Occupancy: +1.2% to 71.4%
  • ADR: +2.3% to $130.71
  • RevPAR: +3.5% to $93.37

“The industry once again set a monthly demand record and achieved its highest August occupancy level since 2014,” said Jan Freitag, STR’s senior VP of lodging insights. “ADR growth was up a bit from July but still below the long-term average. Pricing power remains a key topic around the industry as inflation-adjusted ADR has been mostly flat.”

Full story at Hotel News Now.

2. TripAdvisor’s New Business Model, Outlined

Last week, TripAdvisor announced that later this year, it will be launching a new site and mobile experience that includes a social feed. Currently in beta, the site is evolving towards becoming a personalized and connected travel community, enabling individuals with social assistive tools to plan and book better with relevant advice and information from people and experts they trust. 

The new TripAdvisor expands its community beyond travelers to also include brands, social media influencers, publishers and friends. Travelers can follow and connect with individuals or content creators who share information that is relevant to their interests.

TripAdvisor members will be able to create and view new forms of content including photos, videos, and articles. 

Full story at Lodging Magazine. 

3. Reduce OTA Dependence by Improving Your Website

Competing with OTAs for direct bookings continues to represent an uphill challenge for hotels. The likes of Expedia and Booking.com have become masters at conversion, investing millions to whisk shoppers from browsing to booking in the minimum amount of steps.

However, the transactional nature of this experience is far from inspiring. It also makes it hard for hotels to stand out and showcase their unique personality. Deals and limited offers therefore become the means of differentiation, which clearly isn’t good for business. 

To stand out from the crowd and drive more direct bookings, it’s important to think of your hotel website as a platform to tell a story— a story that shows off your personality, creates a distinct brand image, and offers a compelling reason to book beyond price.

Full story at Travel Tripper.

4. How Much Should You be Spending on Marketing? 

According to a recent study, Booking.com and Expedia return $16 for every dollar spent on marketing. This looks great on paper, but the reality is that over the last decade OTAs’ return on marketing investment decreased by 15%.

This explains why Booking.com dramatically decreased its advertising spend.

The same story is playing out across the hotel marketing landscape: Cost-per-acquisition is soaring, and if the Goliaths of the industry had to change their strategies, it’s probably time to sit down and address the elephant-in-the-room: how much should you be spending on marketing?

Full story at Tambourine.

5. Former Expedia Exec Sheds Light on Personalization Strategy

The real challenge for travel companies is to figure out what combination of air, flight, car rental and activities a consumer wants and make suggestions that will feel crafted just for them, says Tony Donohoe, Expedia’s former chief technology offer.

“There’s so much still to do on that personalization space,” said Donohoe, who has since left the company. “It’s a difficult problem to solve to get the right trip in a person’s hands, and technology has a place there. It will not be done solely with a travel agent. There’s just too much information to parse.

“So at the discovery phase, are we able to put in front of you the exact right trip or combination of travel products that you want,” he continued. “I believe that is what people are actually looking for. The basic table stakes of find a hotel, find a flight, choose an activity, that’s all there. But it’s pulling all of that together, knowing your personal situation, that’s the next wave of innovation, I believe, in the industry.” 

Full story at Skift. 

6. Check Out This New Building in Times Square

In some locations such as Times Square, the Strip in Las Vegas and the Ginza District in Tokyo, real estate has a distinctive use for not only experiential interior functions but also building exteriors that act as unique platforms for advertising and marketing.

L&L Holding Company, Maefield Development and Fortress Investment Group have plans for a massive $2.5 billion hotel in Times Square that will include a permanent, outdoor stage suspended 30 feet in the air, a building façade that will be equipped with LED-lighting across its full 46-stories, and an 18,000 square-foot wraparound sign.

Construction of the hotel, tech retail and theatre development and signage, called TSX Broadway, begins late this winter.

Full story at Globe St.

7. Data and Personalization Are Keys to New Dubai

Lorenzo Maravigilia, hotel manager at the Four Seasons Hotel DIFC, said recently that the use of data to personalize guest experiences will levy the playing field between hotels and Airbnb.

"A lot of people might say that we are scared of Airbnb, but we actually aren't. Airbnb simply sells rooms; a stay at a hotel is much more than that,” he said. “Guests want special and personalized experiences, and we can use technology to create those."

He also noted that data collection and analysis is vital to creating experiences. 

"With the right type of data, you can remember preferences, make check-ins easier and tailor a very unique experience," he said. "Millennials don't mind sharing their data with us.”

Full story at Khaleej Times.

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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Jason Q. Freed, Managing Editor

Jason joined Duetto as Managing Editor in June 2015 after reporting, writing and editing hotel industry news for a decade at both print and online publications. He’s passionate about content marketing and hotel technology, which leads to unique perspectives on hotel distribution and revenue management best practices.

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