How Hoteliers Are Inducing Future Demand

Flexibility With Cancellation, Attrition Rates Key to Group Offers

With demand for hotels still low, hoteliers are strategically thinking about how to start inducing future demand through discounted packages and promotions. The goal is to make offers palatable for guests while allowing hotels to retain some pricing power.

Sharon Andrade, VP of sales for Staypineapple, a brand of upscale, boutique hotels in urban markets across the U.S., said her company rolled out the “Core Passport” to provide flexibility and value for guests as they plan for future travel in cities such as New York, Boston, San Francisco, Portland, Seattle, Chicago and San Diego.

Staypineapple’s Core Passport offers guests fixed rates, with no black-out dates as long as the stay is booked within one year, of $550 for five nights or $1,000 for 10 nights.

Andrade said inspiration for the package came from timeshare models and golf course membership models.

Instead of a gift certificate for a dollar value, the Core Passport provides a package of room nights to be used on any date within 365 days after purchase — as long as rooms are available.

“We figured, why not? It’s the best time to try something new and out of the box to get the attention of people who are planning future travel,” Andrade said.

Earlier this month, Hyatt Hotels Corp. launched its “Choose Your Adventure, Choose Your Offer” promotion where guests can earn a free night with a qualifying stay or 10% to 20% or more savings at participating hotels if booked by April 2 for stays through Sept. 12.

The timing of this global offer extends through the fall so guests can take advantage of the deal “when they’re ready and feel confident,” said Amy Weinberg, Hyatt’s senior vice president of brand loyalty, brand marketing and consumer insights, via email.

The package’s participating hotels are in mountain, seaside and city/urban locations. Hyatt is also offering a variety of other packages, such as the “Work From Hyatt” and “Office for the Day” package for business travelers and students and a “Hyatt Night In” offering for staycations.

“Our extended-stay Work From Hyatt package booking trends show that families and pairs account for nearly 80% of bookings in March and April,” Weinberg said. “And some of the most popular Work From Hyatt hotels are in warm-weather destinations.”

Weinberg noted the packages geared toward business travelers and students will continue to evolve through the year, with more ways to transform the work- and learn-from-home experience.

Booking trends show Hyatt’s guests are also seeking shorter weekend getaways.

In most cases, she said the new Choose Your Adventure, Choose Your Offer stays can be canceled up to 24 hours in advance without penalty.

Rachelle Boudreau, director of sales and marketing for The Langham, Boston, said the property is offering perks for groups that book by June 30 and hold meetings by March 31, 2022. The hotel was closed during the pandemic to undergo a multimillion-dollar renovation and is set to reopen at the end of June.

As COVID-19 evolved, she said her team recognized a need to change and become more in tune with current travelers’ needs.

“In talking with a lot of professionals in the meetings business as well as working with the Boston Convention Bureau to understand what they’re seeing from the larger-scale events to the smaller-scale events, we tried to take a look to see what was most important,” she said.

The two biggest takeaways from those conversations were flexibility with cancellation fees and attrition rates. The key component is that every group’s expectations and needs differ, she said.

Her team made sure to create a flexible package without offering too many things that wouldn’t fit a group’s profile.

“We took the key elements and are working with customers individually to create their programs based on what they envision and how they feel comfortable moving forward with the program,” she said.

The Langham, Boston’s introductory group offer allows qualified events with 20-39 guestrooms per night to choose two “enhancements” and events with 40 or more guestrooms per night to choose four.

Enhancements include waiving cancellation terms, no attrition rate charges, complimentary Wi-Fi for a general session and one round-trip airport transfer.

Because the hotel has been closed for its transformation, Boudreau said it has prime dates available and can be flexible whereas other Boston hotels may have business that’s been rolled over from the past two years.

“We felt we had the ability to be more flexible with our terms and conditions as well as make sure we maintain the safety and well-being practices,” she said.

Revenue-Managing Packages

Andrade said her company is taking a risk with the introductory pricing and waiving amenity fees but decided this was the best time to take that risk.

She said package rates are in line with what’s seen today in many markets. The $550 package gets a customer five nights at an average rate of $110 per night.

Not only is it based off today’s average rates, but Staypineapple also intentionally priced it low to give travelers the confidence that they can afford the offer.

“We have a fixed number that we’ll sell at this price,” she said, adding as soon as a certain number of Core Passports are sold, her team will reevaluate the pricing.

Toward the summer, as travel comes back, she anticipates rates could start creeping above $200 in some urban markets.

Her team is also monitoring how many people are booking reservations as soon as they purchased the offer and how many have yet to make a future reservation.

The upside to offering pre-purchased packages, she said, is the cash being collected at the time of purchase.

Weinberg said each of Hyatt’s participating hotels could select and strategize the offer that would provide it with the optimal return.

Dawna Comeaux, chief operating officer and senior vice president of SPIRE Hospitality, said prepaid or advanced purchase programs that offer percentages off can be made available through the brand’s direct channels and online travel agencies.

“Especially for need periods, you can have it for advanced bookings and it can be months out. The further out they book, in a lot of cases they get a greater discount. As it gets a little closer, we pull those discounts back,” she said.

Continue reading >>