Predicting demand at a hotel was never an easy task.
NB: This is an article from OTA Insight
With the arrival of a black swan event known as the pandemic, demand prediction was only exacerbated situation – adding extra layers of complexity to the process. In today’s dynamic market conditions, hotel demand forecasting has become even more difficult. Historical data is less relevant, markets can change in the blink of an eye, and ‘revenge travel’ is still occurring across the board.
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But, with a predictive market intelligence tool, powered by flight and hotel search data, you can quickly grasp pre-booking market demand and take advantage of potential revenue opportunities before competitors.
Forward-looking search data enables you to view unconstrained demand in your market. You can then create precise forecasts, based on real-time demand projections, for more informed commercial decisions.
But, is flight and hotel search data really a signifier of demand?
Comparison of flight and hotel search volume to OTB by lead time
Internal research conducted by OTA Insight has found that there is indeed a positive correlation between flight and hotel search data, and hotel occupancy.
By evaluating daily, weekly and monthly hotel performance against flight and hotel search data, we observed that high flight and hotel search volumes translate into high levels of market demand. This results in increased hotel occupancy in the specified market.
From the Market Insight example below, you can ascertain that flight and hotel search data is a reliable gauge of booking intent, leading to the anticipated occupancy.
The chart below displays a high demand stay date of 15/06/22, in New York City, where the final occupancy hit 94%.
As you can see from the chart above, hotel occupancy clearly follows the same pattern as flight searches (blue) and hotel searches (yellow).
Searches for 15th June 2022 in New York started to be recorded as early as 365 days prior to arrival date. 170 days prior to arrival date, flight and hotel searches started to surge, whereas hotel actual occupancy was still pacing at 4%.
Searches continued to rise, which in turn saw the occupancy increase until reaching its final occupancy of 94%.
How early can flight and hotel searches show signs of demand?
From the data displayed in the previous section it is evident that search data is a sound indicator of hotel booking intent.
But, how early can it detect signs of demand? Flight and hotel searches occur days, weeks, or months before hotels see any reservations pick-up.
The lead time from a search to an actual booking can vary depending on the destination and the seasonality, as displayed in the below examples.
In the following Market Insight example, search data offers an advanced window for hoteliers like you to revise their commercial strategy early on in the traveller’s booking journey and unlock previously unseen revenue opportunities.
For stays in Singapore in August 2022, Market Insight recorded:
Hotels in Singapore that saw bookings being made for the month of August 2022, in the same month, could see signs of demand picking up for these bookings, 145 days prior in the flight search data, and 80 days prior in the hotel search data in Market Insight.
With Market Insight’s forward-looking flight and hotel search data, you are now able to monitor and target unconstrained demand before they start receiving the majority of their reservations.
This can provide you with a head start on the competition, spotting key dates in advance before your competition. You can then make the most of short, mid and long-term revenue opportunities with the appropriate pricing and marketing strategies.
With Market Insight, information is also provided on the source country (or even city/airport) and how long guests are intending to travel. With knowledge on average length-of-stay and destination origin, hoteliers’ distribution and sales teams can work with key partners to optimise their budgets.
While your marketing team can create, personalised, targeted campaigns and offers for certain points of sale (especially in the form of digital advertising) and rolling it out where you know demand already exists, delivers improved ROI and increased revenue.
Read more articles from OTA Insight
The post Is Flight and Hotel Search Data a Reliable Indicator of Market Demand? appeared first on Revenue Hub.
