The COVID-19 pandemic has revenue managers rethinking rate structures, but it has not led to cutting rates for most hotels, sources said.
NASHVILLE, Tennessee—Demand dropped quickly for U.S. hotels once the COVID-19 pandemic hit, which has led revenue managers to find innovative ways to bring in business, sources said.
During the “Revenue management best practices to get you through the downturn” session at the first-ever online Hotel Data Conference, Carolee Moore, VP of revenue management and e-commerce at Crestline Hotels & Resorts, said “there were a lot of things we would have never considered or even thought we would have to address when we walked into 2020 that we’re now doing.”
“Broadly speaking, we really had to rethink all of our rate structures; our structures were built for compression maximization, not for low occupancy, really looking at what demand is out there, what their needs are,” she said.
Crestline’s extended-stay properties have fared well throughout this crisis, so the company “modeled a lot of our other hotels off of those structures” and took different routes to appeal to travelers in that segment, she said.
Moore added Crestline’s strategy moved to finding active travelers and then rebuilding rate structures and rebuilding the way travelers are targeted to get those guests into their hotels.
For Karen McWilliams, VP of revenue strategy at Concord Hospitality, her day-to-day responsibilities have shifted because of the pandemic.
“In a pre-COVID world, we have different layers for how far out we’re looking depending on what our roles are … and strategy, we are crafting new and different things,” she said.
Now, Concord is investing time in what’s needed on a day-to-day basis rather than looking further out, she said.
“The very first thing we had to do was really look at our toolbox and decide where we needed to overhaul our tools to be able to look from a different lens immediately,” she said.
Since finding new sources of demand has been a must throughout the pandemic, McWilliams said her company had to restructure its data analytics to find out “if somebody booked five minutes ago, who were they, where were they coming from, why were they in town and how many friends do they have?”
Omni Hotels & Resorts normally sees a lot of corporate and group business at its properties, so the current challenge is trying to replace nonexistent demand.
Andrew Rubinacci, EVP and chief commercial officer at Omni, said a lot of his company’s average daily rates are currently over budget and there’s a lot of pent-up demand for leisure demand at resorts.
Some resorts sold out a week or two after reopening, he said.
“We didn’t know where we were because no one’s been here before,” he said.
Rubinacci added that he’s realized Omni can do “quite well in transient, more so than we thought we could.”
While the luxury segment is struggling, the pandemic so far hasn’t led to heavy discounting for luxury properties, Nicole Young, senior corporate director of global revenue management at Rosewood Hotel Group, said.
“This so far is not a situation where price is necessarily a motivator,” she said. “You can make a lot of mistakes with your pricing by discounting where it’s not necessary. It will not pull the commercial lever that you think that it will because people’s tolerance to travel is not predicated upon an economic factor, necessarily.”
She said Rosewood is letting its guests know that its hotels are not pulling back on services and are “creating the experiences that everybody needs.”
McWilliams said Concord expects to see “signs of life in the fall.”
Business from the medical community at hotels will continue, she said, and Concord is staying close to its customers.
Customers will return to travel again at some point and close communications will help the company prepare for that, she said.