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Sunday, November 27, 2022

Changing Fall Hotel Demand Spurs Programming, Pricing – CoStar Group

By Dana Miller
Hotel News Now

The transition from the summer to fall travel seasons has been different than in past years, according to some U.S. hoteliers, who are adjusting strategies for selling hotel rooms to meet the new demand.
Theresa Hajko, regional director of revenue management at third-party management company Spire Hospitality, said demand across the Spire's hotels dipped in the last two weeks of August and first week of September. Hajko said this drop felt bigger than in previous years, possibly due to a greater volume of students going back to school in-person.
However, in terms of fall leisure transient demand, Hajko said it's been "going absolutely gangbusters" and exceeding 2019. For example, Thursday through Sunday bookings are still considered the weekend, and rates are higher than pre-pandemic. Suburban Boston hotels, for instance, are seeing "crazy weekend demand," she added.
In contrast, corporate leisure demand for hotels is "still building," she said, but it's nowhere near the lows that segment experienced in the past.
In the fourth quarter, Spire's portfolio is at 94% of 2019 demand levels, driven by the group segment. Corporate transient demand is dependent on the market, with some hotels at 75% of 2019 levels and others at 30% to 40%, she said.
As of now, demand isn't expected to soften until the Thanksgiving holiday, Hajko said, which is typical.
George Cook, director of guest services at Deer Path Inn in Lake Forest, Illinois, said in an email interview that business travel has returned to healthy levels as the hotel caters to executive and C-suite business travelers who realized they "can't operate in the world of work-from-home or virtual meetings."
Pre-COVID-19, Deer Path Inn's leisure business was compressed primarily to the weekends. During the pandemic and during the recovery, day-of-week demand patterns became blurred, he said.
"As a result, we organically saw an upswing of weekday leisure business. We continue to see this business on the books," he said. "Our mix of business pre-COVID was 38% leisure and 62% corporate. Year to date, it was 52% leisure and 48% corporate. This is a nice balance that we aspired to have pre-COVID."
Steve Contos, executive vice president of Davidson Resorts, said in an email interview that fall demand for resorts overall continues to grow at more normalized occupancies compared to pre-pandemic. Revenues are also increasing due to continued rate growth.
Leisure demand at Davidson Resorts' properties reflects more traditional patterns, with higher occupancy on weekends and around holidays, events and entertainment. Business, meetings and group travel is increasing in pace but not yet at pre-pandemic volumes, he added.
"Citywide events are concentrating on future years in most markets with some good trends; it's just not back in 2022 for most markets," he said.

Contos said Davidson Resorts realized early this year that the cost for travel on all fronts would keep increasing. As a result, the company enhanced food-and-beverage offerings at its hotels as well as the marketing around them.
"Travelers demand more for their spend [now] so special packages and promotions showcase our bars and restaurants, golf, skiing, spas and amenities to their preferred getaway," he said.
Davidson Resorts has properties in the heart of Miami Beach, Florida; St. Pete Beach; San Diego; and along the Gulf of Mexico.
"The Don CeSar 'The Life's Rewards' package offer includes [a] two-nights minimum stay, valet parking, daily resort fee, $250 recreation credit per stay, $150 [food and beverage] credit per stay, two $10 3 Daughters Brewing vouchers," he added.
Hajko said parking, breakfast and points packages, which are offered year-round, are the best-sellers across Spire's portfolio.
The breakfast and points packages, in particular, are doing even better now than in the past, she added.
This fall, Deer Path Inn is incorporating the 60th anniversary of James Bond into its packages and promotions for those who are looking for an "over-the-top, memorable experience," Cook said.
"We like to offer our guests culturally relevant packages with our own twist — like our new 'Double Oh MartINNi' experience. As an English-inspired, sophisticated inn, it seemed fitting to create an offering around the British spy, incorporating decadent experiences from some of our local partners," he said. "These include a private suit consultation and fitting at Smith's Men's Store and a jewelry consultation and gifting with Lake Forest Jewelers, all before the guest goes on a drive with Chicago Aston Martin. They then enjoy dinner in the English Room and end the night with a martini flight in the inn's private wine cellar."
Other packages at Deer Path Inn include the "Girls Getaway," featuring an afternoon tea experience for two guests, and the "Gramping Getaway," which was introduced in response to an uptick in grandparents traveling with their grandchildren.

Hajko said Spire adjusts premium pricing on packages based on current demand. If it's a package that's doing well amid a high-demand period, then the premium would be higher. If it's during a low-demand period and Spire is looking to drive some occupancy via the package, the premium will be less and "more of a value-add," she said.
She said the Holiday Inn & Suites Boston-Peabody, which is seven miles away from Salem, Massachusetts, and its associated festivities, has achieved weekend rates of up to $599.
"We were not getting those rates in 2019," she said. "Events seem to be having bigger turnouts than in the past. So these fall events, even [on] the weekdays, in October are picking up better than they did in 2019."
Cook said packages and programming at Deer Path Inn are dependent on the season and the guests they want to target.
"In high season, we will focus on experiential packages that are more engaging or over the top and will draw someone to book, but doesn't deteriorate the rate," he said. "In a shoulder season, we will focus on a guest that might be more budget-conscious, so a value-driven package is more likely going to get more conversions when occupancy is historically softer."

Hajko noticed recently that bookings via global distribution systems — or centralized reservation systems used by large companies and travel agents to book trips — are starting to pick up.
"The GDS channel is seeing more year-over-year activity, and we're actually targeting some advertisement in the most active GDS markets to try to shift some share," she added.
Additionally, online travel agencies tend to produce the most bookings during October for her company's hotels, she said. Spire has also experimented with advance purchase strategies on online travel agency sites.
"We actually set our rate a little higher than the market, and then we did a 5% off advance purchase, which made our rate more competitive to the market. We have that open way out, far in advance … with a longer window. We had a lot of bookings from that," she said.
Contos said Davidson Resorts' direct websites and reservations teams who handle guest communication are the highest contributing channels for bookings.
"Our guests prefer personalized service, and we want to ensure they have a great experience so they return and reinforce our reputation, which leads to increased future success," he said.
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