Let’s start off with the obvious – group and corporate business are down. Especially for dense urban markets, where RevPAR remains down by 80% compared to 2019, when corporate business made up 50% of this segment’s demand.
But, if we look at the extended leisure business that comes from corporate guests, there’s an opportunity to transform this profile in your database from the “bleisure” persona to something new, as a result of the new virtual work and school environment we find ourselves in.
Say hello to the “Flexcation” traveler. If you haven’t heard of the term coined by Vrbo in August, Flexcation travelers are individuals (oftentimes families) who trade their home for a change of scenery to carry out their day-to-day life with the perks of a vacation due to the flexible remote work and school arrangements that can be done anywhere with WiFi.
As a result, the length of stay (LOS) for these types of travelers tend to be longer in comparison to traditional leisure/bleisure stays. Looking at our own client data across the country, we’re seeing some properties with a 33% increase in LOS for new leisure bookings in Q4 2020 compared to the same time last year, with December bookings sitting at an average LOS of 5.2 in 2020 compared to 3.8 in 2019, yielding a 36.8% increase YOY in LOS.
Flexcationers are staying in urban markets amid COVID-19
For urban properties in a dense market that rely heavily on business travel vs. family, there’s hope on the horizon. A study conducted by Destination Analysts in early October gauging thoughts, feelings, perceptions, and behaviors of American travelers amidst the pandemic, found that 34.9% of travelers ranked cities or metropolitan areas as their most desired destination. In fact, 40% of respondents planned on traveling within1-3 months.
How to serve the flexcationer: What they really, really want
Some visionary hotels, such as the London West Hollywood at Beverly Hills, took action on this trend in June by converting some of their guestrooms into “Offices at the London,” which are booked on a monthly basis, to begin accommodating the Flexcation traveler and their needs.
One of our clients, Montage Hotels & Resorts, also added an additional amenity to their suite of offerings by launching their own e-learning environment – “Montage Academy.” The curriculum couples tutoring for students with “electives” such as hiking or cooking.
So how can you generate Flexcation stays? Create and advertise safe, beautiful hospitality experiences to be had amid their unique circumstances amid COVID. Delivering consistently on this creed is what forges loyalty, repeat business, and reviews that drive new customers. If creating loyalty is a critical element that has long-lasting benefits, then it should be at the forefront of factors to keep top of mind in your revenue generation strategies. When we peel back the layers on loyalty, what Gartner Research firm has uncovered is that 53% of guest loyalty is created during the sales process. One can see how imperative it is to make sure that it is your brand that secures the reservation.
Getting past the OTA’s
Unfortunately, for many properties that are OTA reliant (OTA’s making up 40% of their business or more), earning this loyalty is going to be a long uphill battle compared to those that aren’t. Expedia Group compiled a report called “Quality Counts: The Value of OTA Travelers”, and the research done by BVA BDRC found that 57% of travelers are more likely to book through an OTA now that before COVID-19, especially Millennial and Gen X travelers. Not to mention with Google getting into the metasearch vertical within our industry, headlines in the news are noting how OTA’s are feeling stifled by the unfair competitive advantages Google has advertising on their own search engine – so how is your brand going to compete with Google?
Luckily, there are multiple opportunities to intercept your potential Flexcation guests while they’re still researching your property to lead them to book direct vs. an OTA. Within the Expedia Group study, 69% of survey takers said getting the best nightly rate. Utilizing RMS solutions, such as IDeaS, is great for ensuring your rates are competitive relative to your market. The next step would be able to ensure that the rates that you set are in alignment with the budget of your potential guests. Another tactic would be to identify “who” are the Flexcationers who are getting all the way to your check out page but don’t book, and “what” they’re looking for. This will allow your team to segment your potential Flexcation guests based on LOS, # of guests, and room types, and retarget them through an email campaign with fenced packages that can only be reserved through booking direct.
Seeing above the fog
There’s a slew of strategies that can be deployed to attract and serve the Flexcation demand, without significant cost to your bottom line – something no hotelier can afford in today’s economy.
Events like 9/11 and The Great Recession have proven one consistent truth throughout the past 2 decades. The properties that took the time to invest in their teams and tech stack to drive revenue for their market vs. let their market drive revenue for them during these times prevailed over their competitors, and it’s no different today. A question to ask yourself today is, when 2026 comes around and our industry has hopefully recovered from this insidious pandemic, what type of property do we want to be on the other side of this odyssey?