COLLEGE PARK, GA—“Occupancy at U.S. hotels is coming back, but raising ADR to 2007-2008 levels is still a challenge.” This has been the top line of most industry overviews for over a year. Just how much of “a challenge” was the subject of a conference held in this Atlanta suburb last month by Hilton Worldwide’s focused-service Hilton Garden Inn brand. The day-long Summit was attended by 125 general managers and directors of sales from Hilton Garden Inn hotels throughout the Southeast. Six similar meetings were held in other cities in recent weeks.
“Revenue management tools and sales techniques have grown increasingly sophisticated, so it’s a good investment to make sure people’s knowledge base is up to where it should be,” VP of Brand Performance and Sales Support Alan Roberts told Hotel Business.
Competition in the focused-service segment is getting more and more intense, added Edward Robison Jr., Hilton Garden Inn’s director of brand performance support for North Carolina, South Carolina and most of Georgia. “Even if the GMs and DOSs only take away three actionable items on how to maximize revenue seven nights a week and three items on improving their sales penetration, the day will have been well spent,” he said.
Hilton Garden Inn currently has 544 hotels in its portfolio, 492 of which are in the U.S. Like many focused-service brands, its target market is business travelers Sunday to Thursday and leisure travelers on the weekend. Peak demand, when many of the hotels sell out, is Tuesday and Wednesday nights with Monday and Thursday being shoulder nights.
The revenue discussion at the Summit focused on achieving three goals: growing weekend occupancy, growing midweek rate and improving midweek shoulder night occupancy. “Based on the hotels’ comp set, market by market, there’s demand out there that our hotels aren’t getting. We’re here to start to change that,” Ana-Maria Baker, regional director of revenue management, began her presentation.
Weekend leisure customers are rate-sensitive, compared to midweek business travelers who have a corporate rate or are on expense accounts. “Accordingly, when it comes to kick starting weekend occupancy, position transient rates correctly, relative to competitors’ rates. Then be prepared to change on a dime if you’re charging more than the comp set,” Baker advised.
“Meanwhile, take advantage of discount programs as long as they’re price competitive with the comp set,” she continued.
Like other multibrand hotel loyalty programs, Hilton Honors is a major driver of bookings. Typically, frequent business travelers earn points on midweek stays and seek to redeem them on vacations. Program members seeking to redeem for weekend stays may
not have sufficient points for a full stay, but can still use the points they have for discounts on premium room rates,” she said.
The key to growing midweek ADR is to maximize the rate on the Tuesday-Wednesday peak nights, limiting low discounted business, according to Baker. “You want to yield corporate business more aggressively to increase ADR. You can also use length of stay requirements strategically to increase revenue on the Monday-Thursday shoulder nights,” she recommended.
“An ideal corporate account booking comes in Sunday and stays through Tuesday and Wednesday,” Baker added.
Similarly, many midweek bookings are likely to be part of national corporate accounts that have negotiated rates and been granted a provision known as last room availability (LRA). This means the hotel is obliged to release every room in that room category at the negotiated rate.
On the upside, corporate accounts are offered negotiated rates in return for a volume commitment. But granting LRA too liberally can have a downside. Corporate negotiated rates are finalized every fall for the following year. “You may want to evaluate your position on granting LRA,” she suggested.
For Kathleen Moore, general manager of the Hilton Garden Inn in Tifton, GA, attending the Summit provided not only a number of actionable items, but also a valuable reminder. “We have access to a huge amount of revenue data, but not always the time to study it in depth,” she said, adding, “Large full-service hotels are likely to have a dedicated revenue manager on staff. At focused-service hotels like ours, on the other hand, the job more often than not falls to the GM or DOS.”
As the percentage of Internet bookings continued to grow at an accelerated pace at focused-service hotels like Hilton Garden Inn through the 2000s, hotels invested in improving their websites. But consumer expectations have continued to increase, so hotels need to go back regularly and review their Web sites with a critical eye.
“Your visibility online is essential, especially for leisure travelers,” Baker advised. “Look at your site, not only for content, but for the effectiveness of the photos. ‘Do they tell the story you’re trying to tell?’”
Commenting toward the end of the Summit, Roberts said that the day should be like a wake-up call. “What with all the tools and expertise we have at our disposal today, if you don’t get serious about revenue management, it’s like leaving money on the table,” he concluded.