The hospitality industry, particularly the hotel sector, experiences significant fluctuations in bookings during off-seasons. This seasonality is a key feature of the industry and has a direct impact on customer behavior and hotel occupancy rates.
What is Hospitality Marketing
Hospitality Marketing is a strategy that helps hoteliers advertise to the public. The goal of this strategy is to raise awareness and increase hotel bookings by highlighting unique selling points. This also requires hoteliers to understand their target audience, craft effectively, and utilize digital channels for promotion.
Hoteliers can use a variety of tactics to promote their business during off-season, including discounted prices, special offers, and discounts on room rates or amenities. Additionally, they can take advantage of seasonal events in the local area (such as festivals and concerts).
Why Hotel Booking Fluctuates During Off-Seasons
Generally, the hotel business operates in annual cycles that are punctuated by the seasons. The months of November to March are often considered off-peak periods for hotels, while June through August typically see peak attendance.
In Southeast Asia, some countries are experiencing a decline in hotel bookings for a period of time. Countries like Vietnam, Thailand, and Cambodia experience wet seasons from June to October. This can be one factor that affects hotel bookings in the above countries and may lead to decreased demand for hotel services.
The off-season fluctuation of hotel bookings can have a direct impact on the profitability of a hotel business. During periods of low occupancy, hotels often try to reduce costs and attract more guests by offering discounts or special packages. Hotels also attempt to keep their profit during the off seasons, hotel room pricing tends to be cheaper due to decreased demand3. As a result, many hotels implement strategies to manage these seasonal fluctuations and increase occupancy rates. These strategies include seasonal or progressive pricing, where promotional pricing rates are set during the off-season.
However, it’s also important for hotels not to obsess over acquiring more bookings during the low season if it doesn’t make financial sense or if there simply isn’t enough demand.
In addition to pricing strategies, hotels can also take advantage of the “shoulder season”, which refers to the periods between peak and off-peak seasons. For a location with a booking pattern that peaks during summer and winter, the shoulder season would be from September to November and March to May.
Despite the challenges, seasonality also offers opportunities for the hotel industry. By understanding the patterns of demand, hotels can optimize their revenue management strategies, balance supply and demand, and ultimately improve their bottom line.
The Value of Google Hotel Ads to Hoteliers
The hotel industry is a fiercely competitive marketplace where visibility and reach are paramount to success. In this digital age, one platform that has proven to be an invaluable asset for hoteliers is Google’s Hotel Ads.
Increasing Reservations Volume
According to a report on Hospitality Net, reservations secured via Google Hotel Ads grew by a total of 112% year-on-year to October 2022. This impressive growth indicates the massive potential that Google Hotel Ads holds for giving reservations. Especially in the Asia-Pacific region, which saw a staggering 389% increase in bookings, the impact of this platform is undeniable.
Capturing the Online Booking Market
Google Hotel Ads offers a direct channel for hoteliers to reach potential guests. The ads link directly to the hotel’s booking engine, providing a seamless transition for users from discovery to booking. This direct approach helps hoteliers capture a larger share of the online booking market, which is projected to reach 41% by 2020.
Boosting Direct Bookings
Direct booking often results in higher profit margins as it bypasses commission fees charged by OTAs. Google Hotel Ads prove to be a valuable source of these direct bookings. By increasing their online presence in Google searches, hoteliers can drive more direct bookings.
Commission-Based Model
Google Hotel Ads operates on a commission model where hoteliers pay a 10% commission to Google for each completed booking. While this might seem like an additional expense, the increase in volume and visibility offsets the cost. Plus, the advantage lies because hoteliers only pay for confirmed bookings.
Increased Visibility
Increased visibility on Google Hotel Ads can significantly boost a hotel’s ‘book direct’ strategy. With Google Hotel Ads, real-time information on availability and rates is provided, enhancing the user experience. The increased visibility enables any property, irrespective of its size, to compete with several hotels and reach a greater number of potential customers.