The world as we know it has changed. And while there is still an appetite to travel (the search volumes clearly support this) there is still much uncertainty around international travel restrictions and hotel re-openings. One thing we know for certain is that consumers will behave differently after this. They already are.
Travel is incredibly complex with so many influencing factors. Even pre-Coronavirus, it was never a case of going to a hotel website and making a booking on your first visit. As consumers, we constantly drop in and out of brand.com. We visit online travel agents and do price comparison checks, we check review platforms – or consult with friends and family and we usually get remarketed to. There is a huge amount of research and consideration that comes into play before we take our credit cards out and make a booking.
As we look at markets that are starting to show signs of recovery we’re seeing that the user journey looks very different. In a time where we have more questions than ever before, this is hardly surprising. After analyzing our Allora GM report data, we have seen noticeable differences in the customer journey and changes to their buying behaviours on brand.com.
We work with hundreds of hotels across Europe and the US, however for the purpose of this article, we focused on one country – with more concrete exit plans – to get a more accurate insight into the customer journey.
In January Irish customers booked within 1 day of their first visit. In May, it now takes a customer 9 days to complete a booking from their 1st website visit. That’s a 9x change in booking behaviour.
Other key insights:
- In January, domestic customers took 4.38 moments/sessions to make a booking. In May it was as high as 7.71. The consideration phase has almost doubled!
- Booking lead-in has gone from 50 days in Jan to 129 days in May (a 2.5x increase)
- Year-on-Year length of stay (LOS) for domestic bookings in Ireland is up by 41%. (Social distancing will keep families and friends apart for months. We anticipate the increase in LOS will be from bookers that want to reconnect with their loved ones in the form of domestic holidays/leisure breaks.)
The post-Covid19 customer journey will redefine a hotelier’s digital marketing strategy. This could potentially be the ‘golden age’ for the direct channel and now, more than ever, brand.com is an essential part of the ‘new’ customer journey.
As hoteliers, we need to pay attention. If it now takes 9x longer for a domestic booker to book at your hotel – it means that they need a lot more reassurance and guidance before committing to a purchase. There is absolutely no way – in the current climate that a guest would book purely through an OTA without visiting the direct channel.
How can hoteliers adapt their strategy to the new customer journey?
We’ve already determined that guest conversion currently takes 9x longer than before. What previously took 24 hours for a guest to convert now takes 216 hours! It’s critically important that hoteliers understand this. There is ample time to market to a potential guest. However, the intent has changed. Traffic is not high intent.
How can you nurture low intent traffic?
- Remarketing the right message has never been more important
- Avoid a repetitive book direct message – communicate ‘why your hotel’ – not your hotel’s preferred method of receiving a booking.
- Abundantly clear flexible booking policies – are potential guests searching for a variety of dates before making a booking?
Earlier this month, we reported a 370% increase in domestic bookings after Leo Varadkars phased exit-strategy. After carefully analyzing our data, we’re pleased to announce that we are still seeing an upwards trajectory of direct bookings across our Irish portfolio of hotels. In fact, our bookings are pacing 25% ahead for net domestic bookings in August, 22% ahead in September, and 30% in October.
Despite a tentative open date of July 4th, there is still great uncertainty around when UK hotels will actually be able to reopen. For this reason, we have yet to see any increase in domestic bookings across our portfolio of UK properties. We anticipate that as the UK moves firmly into stage 3 and then into stage 2, we will see increased confidence in the domestic travel market.
Interestingly – considering the industry-wide drop in ADR – we have seen a substantial increase in average booking value (ABV) for all bookings made since late April.
1) Leisure Bookings vs Corporate Bookings
Current bookings are for leisure stay – not corporate or business travel. As a result, we’re seeing a longer length of stay (LOS) for bookings. Corporate bookings tend to only encompass 1.59 nights stay whereas the average length of stay for leisure bookings in April and May is 2.5+. The majority of bookings that have been made are for family hotels, coastal properties, or those with large garden estates. Resort stays typically cost more per transaction which may support the increase in ABV over the last few weeks
2) More occupants per booking
Social distancing has kept families apart for over months. It is understandable that families want to reconnect with their loved ones in the form of holidays/leisure breaks. We’ve seen a higher number of family bookings than that of individuals or couples.
Understanding when a guest is ready to book is more complicated than ever before and a hotelier should be focused on protecting their net REVPAR.
Avoid discounting and hold your rate within the comp set even if your conversion rate is dropping for now (it will recover when booking demand returns). According to a recent STR webinar, only 6 of Europe’s major cities returned to matching or exceeding post-recession REVPAR by 2014 due to aggressive discounting following the crash.
Many regions may be required to open at a lower occupancy, which will immediately reduce supply and if a race to the bottom on rates was to follow, a number of your competitors could be operating a reduced occupancy hotel below operational cost and with social distancing in place, there is limited opportunity for the in-house F&B outlets to make up the shortfall. Hotels have a great deal to consider over the coming months. From deep cleaning their properties to continued social distancing, and reduced staff, one thing is certain: generating cash and driving profitability will be vital.