December 6, 2013

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Bargain Shoppers

Resorts and Attractions Grapple with Last-minute Bookings

By Gaylen Webb

December 6, 2013

A luxury boutique hotel in New York City used Twitter to broadcast daily discounts of 25 to 30 percent for unsold rooms, and savvy customers learned to wait—some in the hotel’s lobby—for the last-minute specials before booking their stays. Other patrons booked their stays in advance at higher rates and then demanded the lower, last-minute rate when they arrived at the front desk. After six months of discount mayhem, the hotel discontinued the Twitter broadcasts.

In the past, resorts and attractions could count on bookings being solidified up to a year in advance. But during the lean years of the recession, customers began waiting for last-minute deals before booking a trip. Has that become the new normal?

In 2012, hospitality industry blogger Max Starkov wrote, “Many major hotel brands report 80 percent or more of their mobile bookings are for the same or the following day. In this hyper-connected social and mobile world, the booking window has shrunk tremendously over the past few years and travel consumers have embraced the mobile Web as a legitimate booking channel.”

Proceed with Caution

Early on in her career at Red Mountain Resort in Ivins (formerly the National Institute of Fitness), General Manager Tracey Welsh says it was almost unheard of for a client to book a stay and arrive at the resort on the same day. Now it is almost commonplace, even for Red Mountain, which was named the No. 1 destination spa in the world for 2012 by Travel + Leisure magazine.

“I don’t have the level of confidence that I had in the past to forecast 60 or 90 days before a need period; however, I have much more hope now for the 30-day window, that things can correct themselves because of that last-minute booking trend,” she says.

Shorter booking windows make forecasting much more difficult, says Welsh, especially from a staffing perspective. “We have a very high staff-to-guest ratio, but with the shorter booking window, if a guest wants a spa treatment immediately we may have to call in a spa therapist to serve that guest,” she says. “The trend certainly demands more versatility and adaptability from our staff than ever before and makes forecasting challenging. We have learned to adapt to the last-minute clientele.”

Timothy Rutland, director of sales and marketing at Stein Eriksen Lodge Deer Valley, a Forbes five-star resort, says the trend toward shorter booking windows emerged during 2009-2010, at the height of the Great Recession, as cautious consumers waited to book their vacations. As the hospitality industry stabilizes, he believes the booking and travel windows will widen, despite whatever reservation channel customers use.

During the recession, he explains, projections didn’t extend much past 30 days, but now he can comfortably project six to nine months out. Meanwhile, demand is rising across all platforms, including mobile and online. It would be nice, he notes, if bookings extended out to a year, “but I don’t know if we will get there in the next few years. It depends on how stable the economy is, and it depends on consumer confidence.”

“We are certainly seeing much more activity from guests that book online, whether that is through our website or through online travel agencies,” Welsh says. “Our online clients want to be served immediately and want things to be presented easily and succinctly.”

Deal or No Deal?

The shorter booking timeframe has caused hotels and resorts to alter their marketing strategies.

About 60 percent of Red Mountain customers can be counted on to book their stays up to a year in advance, says Welsh. However, a growing number use online portals to book their stays under tighter booking windows.

The resort has adjusted its advertising to attract more attention from these online buyers. It occasionally opts in to deals from online travel agencies during short-term need periods. Welsh says the resort now spends 60 percent of its advertising budget in online advertising, verses 40 percent for print advertising. From a placement perspective the disparity is even greater, with 80 percent of the advertisements placed online verses 20 percent in print advertising.

She says customers who book online often do all of their research online as well, before they make their buying decisions. And they often look at several different travel portals in order to make that decision. “Deals are very compelling to them,” she says. “We have addressed that by offering deals during need periods or by offering things that encourage our guests to book online and to book earlier so we have a greater ability to forecast.”

On the other hand, Stein Eriksen has tried to remove the allure of last-minute deals by moving to what Rutland calls “single image pricing,” which means pricing is the same across all channels, be that online travel sites such as Expedia or the company’s own proprietary system. “Stein Eriksen customers know they will get the best price no matter what system they use to book their stays, and that has reduced the feeling that they need to shop around or look for last-minute deals,” he explains. “That doesn’t totally eliminate the desire for customers to look for last-minute deals, but it is getting better.”

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