Despite the post-pandemic leisure boom, the hospitality sector was advised to “pay attention” to the group and corporate segments at today’s Resort & Residential (R&R) Hospitality Forum in Lisbon (11 October).
“Those hotels that remain steady with corporate and group segments, they will be looking at a better landscape in one or two years from now. We’ve come from a couple of years where leisure has been the main focus, but groups are coming back very strongly,” Gonzalo Ocejo, vice president, development at Preferred Travel Group told attendees.
Owned and operated by the Ueberroth family, the business rebranded as Preferred Travel Group earlier this year and represents more than 1,100 hotels, resorts and residences across 80 countries, including 14 recently added to its listings.
“Hotels have been in the driver’s seat for some time with having incredible revpar lift. The demand is strong for now, especially with US outbound demand into Europe,” continued Ocejo. “This, combined with the Olympics in Paris, will continue to allow hotels to push profits and rates into next year.”
However, he emphasised the importance of considering the longer-term strategy when it comes to distribution.
Operators acknowledged the necessity of OTAs in marketing their product: “The most expensive room is the unsold room,” said Jorge Rosillo, development director Iberia, Yotel.
“Better to have that room full than empty... you need to have a certain occupancy. If you are not reaching that occupancy, best to sell ‘cheap’ or with more cost than not sell it.”
Even Pierre et Vacances Center Parcs, which development director Alexis Boudrand said attracts two-thirds direct sales due to its strong brand awareness. He said OTAs were useful to reach a clientele that doesn’t know the brand or product and while guests have historically stayed for an average of seven days, the business was exploring how OTAs could support it to be more flexible and push unsold nights through their platforms. The group is also considering distributing some of its accommodation through Airbnb.
“People [now] have a very last-minute attitude while booking, so they need flexibility, we need partners for that to be agile, that can change prices very quickly,” he said.
“It takes time and effort to reach the good clientele, the good segment, and the right balance between the strength of the brand, guests that don’t know your brand or product we reach through our partners, and then the goal is to retain them in the brand and go direct.”
OTAs’ strength also lies in their technology background, and artificial intelligence is set to become a core part of hotel management. Pierre et Vacances, working with Duetto, has integrated AI into its revenue management system, while Ocejo pointed out the benefits it could bring in upselling through content.
“AI is going to help us identify any issues in the setup. You can maximise the content with the setup. Content right now is so crucial,” he said. “We need to use AI in a proper way to build content and reach the target audience.”
Meanwhile, OTA Destinia offers a version of ChatGPT on a beta version of its website for customers who wish to engage with it.
“We have to analyse how big it will be, but it is something that is here to stay,” said managing director Ricardo Fernández Flores. “You need to start giving more options to customers because the competition is about the customer.”
As a result, he stressed that each market needs a different distribution approach, with some markets offering a better conversion rate over the telephone compared with online. “You need to adapt at least for the countries that are really relevant for you,” he added.