Wednesday, January 15, 2014

Understanding and Managing The Last Minute Traveler

A major trend shaping the travel and hospitality industries right now is the last minute traveler. People are booking their travel later than ever before and looking for deals in the process. Hotels would like to avoid the downward pressure on hotel room rates that devalues inventory, yet they also need to book as much of that inventory as possible. There are two major forces at work simultaneously driving this trend in the booking of hotel reservations. One that is entirely out of the control of hotel management and another that is clearly in the hands of hotel marketers and decision makers.

The world economy has been obviously struggling since 2008, with a clearly defined full recovery yet to be seen. The natural laws of supply and demand are in play and will affect hotel reservations just like all other segments of the economy. Consumers are aware of how the economic downturn has created inventory availability issues for the hospitality industry and they have learned how they can best capitalize on that availability.

The trouble with the economy in recent years has combined with technological developments during the same time frame to drive the creation of the last minute traveler. Behind the trend has been the rising tide of mobile technology and the emergence of dedicated mobile apps designed to steer users toward the best last minute deals in hotel room availability. This has led to a decrease in availability, but comes at the expense of average daily rate for the heavily discounted accommodations. Yet this is where hoteliers have some degree of control in determining what their pricing structure is going to be, even on last minute availability.

Over time the economy will turn around and the supply of available hospitality inventory will decrease. When this happens, the pricing of hotel accommodations will become more favorable for hoteliers naturally as the law of supply and demand reverses the current trend. However, there are ways in which hotels can speed up the process and garner more generous revenues from their daily rates while earning the potential brand loyalty of the last minute traveler.

We will explore this topic further in a future post.

 


Posted via OnFast - http://www.OnFast.com

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