How to manage revenue in a pent-up demand era?
— 20 experts shared their view
Considering the unprecedented global travel disruption and performance declines we've endured; hoteliers finally have something to look forward to. The world has spent the last 18 months dreaming about travel, but not actually going anywhere. Increasing vaccination rates combined with relaxed travel restrictions are bringing travel back… with a vengeance. Most agree that the worst is behind us.
But so far, this pent-up demand or "revenge" travel is different. Driven almost entirely by domestic leisure demand, the patterns have changed. Some premium locations are already exceeding 2019 pre-COVID levels, while hotels just a few blocks away are still struggling. Hotels that targeted the corporate, international, or group segments are reinventing themselves, with mixed success.
Considering the unique nature of the recovery, what should hoteliers do to optimize and manage COVID's pent-up demand?
Founder | CEO | Futurist
Having clients all over the world, I can say I have direct experience with the issue. And it's no fun. As a consultant, it's frustrating to go on a call and celebrate the hotel's best year ever, hang up and speak to another client running at 1/10 of 2019 occupation rate... I have a few clients that haven't reopened their doors since 2020, and some of them will -unfortunately- never be able to open again.
Scott is right when he says that, currently, results are driven almost entirely by domestic leisure demand, and hotels with a strong dependency on non-domestic, non-leisure markets have a long road ahead, whatever they do to reinvent themselves. I've seen properties offering staycations, creating alternative spaces, coming up with coworking stations, etc. Results were mixed (meaning: close to zero), as best.
The legendary Eugene Schwartz once wrote that "the greatest mistake marketers make is trying to create demand." I agree. This may sound nihilistic, but most properties will simply have to bite the bullet and survive until the market becomes less domestic/leisure-centered. Let's hope this will happen sooner than later.