Hotel Expiration Dates: Fact or Fiction?
By Mark Lewis-Brown, CEO & President of Vertical Booking USA
Expiration dates: they're super common in some industries - they are regularly seen on consumer-packaged goods, food and drinks, medicine, etc. - but the idea of an expiration date isn't often applied to the hotel industry.
Just like with milk or medication, hotels' rooms also have expiration dates, after which the empty room becomes a liability, rather than an asset.
Think about it… like milk, a hotel room is a perishable product; unfortunately for hoteliers, hotel rooms expire daily at 11:59pm. That means hotel rooms' shelf-life is falling far behind that of the carton of milk, slowly curdling in the back of your fridge (this isn't just happening in my fridge, right?!).
When a room is left empty, the hotel loses potential revenue, which could have been earned through the booking and incidental purchases, AND still has to pay for the room's maintenance, etc. - in short, hoteliers are throwing money away, each and every time they let a hotel room expire.
It's a lose/lose situation, my friends.
So, how can hotels beat the dreaded expiration date, by getting a soon-to-be-expired room booked, even at VERY the last-minute?
For hotels to be profitable in the long-term, they must update their distribution strategies to help fill the (literal) void that an empty room causes. Here are two ways to fill your property's empty rooms, even at the last-minute - and increase your overall occupancy and RevPAR:
Last-Minute Booking Sites & AppsThis one may seem obvious, but you would be surprised how many hotels don't take advantage of this highly profitable distribution channel. There is a HUGE market of travelers who enjoy planning last-minute trips.
While it's not my preferred method of planning or booking travel, the stats are there to prove that last-minute bookings, especially done via mobile, are a growing trend:
- "Travel-related searches for "tonight" and "today" have grown over 150% on mobile, over the past two years." (Google Data, 2017)
- "72% of all mobile bookings made by U.S. travelers happened within a 48-hour window prior to the booking."
- "Forty-nine percent [of Millennials] take last minute vacations" - and that means that they will be booking a hotel at the last minute as well, often using their mobile devices (as you can't pry their phones out of their hands, even if you wanted to).
- And yup… "46% [of Millennials] book travel through a smartphone or tablet."
Last-minute booking sites/apps (i.e. HotelTonight, Hotwire, Priceline, etc.) are all designed to attract the bookers (hello, Millennials!) who prefer to book their hotels at the last-minute, often even after landing in the destination.
If your property isn't using these sites to fill empty rooms up until the final hour of each day, you are missing out on a huge number of bookings and, of course, revenue.
I know what you're thinking: most of the last-minute sites/apps require discounted rates in order to list a property's rooms - and so, you just don't want to use them!
I totally understand how that would be a turnoff… after all, who wants to give away money?!
Even though it's counter-intuitive, I challenge you to look at it a different way: I know it sucks to have to discount your room AND still pay a commission on the booking, but even if you only earn 30% to 40% of the regular room rate (plus potential revenue from food & beverage, onsite amenities, tours, etc.), it's better than letting the room expire, earning you ZERO revenue from the room.
30% to 40% of the revenue vs. NOTHING!!
That's really what it comes down to… which would you choose?
Hopefully, you're getting the gist of my argument. It's worth discounting on the last-minute sites and apps to earn some income from a soon-to-be-expiring room. (Of course, we don't recommend discounting as a long-term strategy, as I'm sure you remember from my previous articles, but in this case, discounting via these sites/apps is a good strategy).
Key takeaway: Hotels must update their distribution strategy today to list their soon-to-be-expiring rooms on as many of these apps and websites as possible.Trust me… Your bank account will thank you for it!
CRS AutomationIt's a fact: just over 70% of the last-minute bookers search for and book their room on their mobile device.
This growing trend gives savvy hoteliers another way to capture last-minute bookings via mobile devices: configure your CRS to offer special room rates for mobile, last-minute bookers through your website's mobile booking engine - ensuring that potential guests have a way to book these same amazing rates via the direct channel (instead of through the booking channels we discussed in the first tip).
It's important for you to know that most of the OTAs already have the technology that enables them to offer discounted rates to last-minute, mobile bookers, making it easy for them to capture last-minute bookings; as such, it is an operational imperative for all hotels - no matter what size or type - to choose a CRS company that makes this feature possible. Without it, your property will not be able to remain competitive, especially in the fast-paced, ever-changing hotel industry.
After all of that enlightenment, are you ready to expire expiration dates from your property altogether?
Mark Lewis-Brown, CEO and President of Vertical Booking USA, is a hotel industry veteran with more than 30 years of experience in the hospitality industry. At Vertical Booking, Mark is responsible for the commercial development of the company’s innovative CRS platform in North America and is involved in key decision making regarding the strategies and development of the group.More from Mark Lewis-Brown
About Vertical Booking
Vertical Booking is a leading, global reservation technology provider with hotel clients in more than 118 countries worldwide, offering solutions translated into 29 different languages and usable in all currencies. No matter the size of the property or group, Vertical Booking can provide a customizable reservation solution that supports the entire guest booking cycle, including a booking engine, GDS distribution, channel manager, OTA rate comparison tool and a reservation call center application, all through one unique dashboard. Because the solutions are module-based, hotels can customize the platform to only pay for the tools needed, keeping the suite of products affordable for everything from small boutique hotels to large groups and independent chains. Vertical Bookings solutions eliminate manual reservation input, inventory tracking and are fully integrated using 2-way XML connection, to ensure access to real-time reservation data.
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