How hotels can tap into the growing package market

International package demand is growing. Hoteliers can learn from the top international feeder markets to tap into this increasingly valuable market.

Downunder, new data from Expedia Group shows that inbound package travellers into Australia booked 40 days further in advance, stayed 1 day longer, canceled 15% less and paid a 10% higher daily rate than standalones. This data looked at the top five Australian markets – Sydney, Melbourne, Cairns, Perth and Brisbane – over the past 12 months. The year-on-year figures told a stronger story still, showing that inbound package demand – and the value to hoteliers – continued to rise. In fact, inbound package demand was up 25% and the average ADR grew by 10%.

Here are six tips on how hoteliers can tap into this burgeoning package market.

1. Know your top origins and their specific travel habits

Package offers many benefits, to both hotels and travelers, and to get the most value from packages, hotels should know their top origins markets. You can then look at the specific bookings habits that each origin brings: do they tend to book 5-star or 3-star? Prefer beach or city properties? Are they sightseers, shoppers or both? For example, nearly 40% of international package demand to Australia was for a 5 star property compared to just over 25% of international standalone demand.

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2. Offer origin-specific deals & promotions

When thinking through advertising and marketing dollars, properties should leverage origin-specific deals. If you know, for instance, that a high percentage of one origin market’s visitors come through the package path, offer a higher discount to draw even more guests from that market. If you are offering a “stay five, save 20 percent” for international packages, you may want to do a “stay five, save 25 percent” to tap deeper into that package-heavy market.

Another tip: don’t miss out on the shorter packages and instead provide discounts for multiple length of stay tiers. A lot of international package promotions focus on seven-plus nights, but they lose out on the four-to-five-night stay, which is often more common. A tiered discount strategy, with discount increasing with nights booked, can ensure you capture every length of the package.

3. Know your international packages peak times

Be aware of top booking periods from your top origins, which can vary by country and region. For Sydney, international visitation spikes over December and January, whereas in the hot tropical region of Cairns, April and May were more popular. Peak times for specific markets can help narrow your strategic focus. For example, in Perth Chinese visitation spiked in February, which aligns with the nation’s Chinese New Year holiday.

Another tip: Knowing that packages have longer booking windows, properties can also keep costs down by targeting only on the package path for travellers’ booking 40-plus days out.

4. Money matters: Keep an eye on exchange rates

Properties should be aware of currency conversion rate changes related to top origin markets. If the Australian dollar strengthens versus the currency of your target origin, the same discount that worked in the past may no longer have the same value to the customer. Conversely, ADR growth can be felt more.

5. Differentiate your property

With the typical package paid for in advance, the traveller likely has more funds available to spend on-property, whether at the restaurant, bar, spa, or on activities. There are numerous ways that hotels can stand out from their competitors and attract more looks and books. Knowing that package travellers are more likely to upgrade and spend more on property, hotels should target guests with special discounts and offers, value add promotions, and complimentary amenities leading up to their arrival.

6. Leverage insights and data

Putting big data to work for your property is the smartest thing you can do, because data doesn’t lie. It gives you invaluable insights into origins, seasonal trends, compression periods, buying habits, and your comp set.

About the author

Alejandro Moxey is Director of Market Management at Expedia Group. Expedia Group has thousands of market managers across the world who are all experts in their local market – who exist to help you identify your guests and maximise occupancy and pricing. Use them!

Expedia Group Partner Central, is a platform that offers free insights and tools for lodging partners. Whether it is Property Analytics, Guest Review Insights or Packages Competitive Price Grid, which shows how your pricing measures up to a specific market, it helps hotels be smarter about their targeting, pricing and promotions. For international bookings specifically, Rev+ revenue management tools will also compare how a property’s rate looks in any currency, which is immensely helpful.

Tags: international travellers, package market


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