Plotting the Comeback for Hotels in a COVID-19 Environment
By Dan Skodol, VP, Data Science & Analytics at Cendyn
For the past nine weeks since our original blog post, we've continued to track hotel selling rates, planned opening dates, occupancy, and usage of out-of-order rooms among our client hotels. It's been interesting to monitor the extent to which hotel reopenings have stayed on track with initial plans and how demand has responded to the reopenings. The interactive tool we provide here illustrates how the four key metrics we've tracked have changed week-by-week from May 5th to June 30th.
As of May 5th, 80% of hotels had sell rates available for June 1st and beyond. At the time it seemed there was a lot of optimism around a relatively quick closure period. Two weeks later, as of May 19th, only about 60% were selling for the June 1st to July 1st period, with July 1st and beyond still with 80% of hotel selling. This suggests that roughly 20% of hotels had to delay their openings for a variety of reasons. Even now, as of June 30th, we see only a gradual ramp-up from 70% to 80% that have rates available over the course of July, though August 1st and beyond are a bit better right now with about 85% of hotels open.
While our clients' planned reopening dates changed only somewhat over the nine-week period, the gap between their planned dates and the openings based on sell rate availability gradually closed. This could imply that hotels may have taken a more aggressive approach in selling for dates on the possibility of being open and then just canceling reservations should they have remained closed. At any rate, it seemed as though our clients' expectations as of early May were reasonably accurate.
Bounce-back of demand
As many theorized would be the case, there seemed to be some pent-up leisure demand among those who were eager to get out of the house following stay-at-home guidelines in many locations. However, the only discernable increase in week-over-week occupancy came after hotels already started to open around June 1, suggesting that guests took a bit of a "wait and see" approach, waiting for hotels to reopen before booking.
The usage of out-of-order (OOO) rooms going out about a month increased but then leveled off around 20% of inventory, keeping in mind not all customers use this capability within their PMS and RMS. It's interesting to note that this week is first time that a pattern emerged with notably fewer OOO rooms on weekends, suggesting some strength in demand in the leisure markets that Cendyn serves.
There is still considerable uncertainty and fluidity of the situation around COVID-19. Although certain observed demand signals are a good sign, given the resurgence of the virus in many locations, it is worth continuing to monitor closely. Hotels' enforcement of health and safety policies and procedures will remain critical for building and maintaining guests' trust and confidence in travel.
Dan SkodolMore from Dan Skodol
Cendyn is the leading innovative cloud software and services provider for the hospitality industry. Their software solutions drive sales, marketing, and revenue performance for tens of thousands of hotels across the globe with a focus on integrated hotel CRM, hotel sales, and revenue strategy technology platforms. The Cendyn Hospitality Cloud offers a complete set of software services for the industry, aligning marketing, sales, and revenue teams to optimize their strategies and drive performance and loyalty across their business units. With offices across the United States in Boca Raton, Atlanta, Las Vegas, and San Diego and offices in the United Arab Emirates, Germany, Singapore, Thailand, and Japan, Cendyn proudly serves clients in 143 countries. Their software solutions deliver billions of data-driven, personalized communications on behalf of their customers every year. For more information on Cendyn, visit cendyn.com.