Late bookings at high prices give hoteliers a reason to cheer

MUMBAI: More travellers are booking rooms close to travel dates, benefitting hotels that charge more for late bookings, industry executives said. The change in customer behaviour is a relief for hoteliers, who have struggled to raise average room rates (ARR) despite rising occupancy in the last two years.

Last-minute bookings—where customers book rooms within seven days of travel—have surged in the last one year, according to online travel agent MakeMyTrip. In its India Travel Report released on February 22, it said such bookings have grown significantly, with 58% of all customers booking their hotels within two days before travel in 2016, against 49% in 2015. As per the report, around 82% of the bookings have an advance purchase window of only two weeks. This last-minute booking is driven by penetration of smartphones and the growing number of young travellers, say hoteliers.

Large hotel chains such as Accor Hotels, Marriott Hotels and Berggruen Hotels are enhancing technology and infrastructure to help predict such last-minute demand accurately and strengthening their revenue management systems to take advantage of it.

“Nearly 40% of the hotel businesses in India is getting booked from between 0-3 days (of travel). Getting sold out is bad business. It’s okay not to be sold out 100%, but make sure you are driving the rates by having availability,” said Arif Patel, vice-president, sales, marketing, distribution and loyalty, AccorHotels India.

The French hotel chain runs around 45 hotels in India under brands like Sofitel, Novotel and Ibis. When a hotel, particularly at the mid-scale and economy brand, approaches a ‘sold out’ situation, the company targets 10-12% of the total inventory getting booked within a period of 24 hours at a higher rate, Patel said.

At Marriott Hotels, one-third to one-fourth bookings are made between three to seven days before travel. Marriott has activated online channels specially to reach out to those who require rooms at the last minute.

At Berggruen Hotels Pvt. Ltd, which runs 21 Keys brand of hotels in 17 cities, as much as 40% of the inventory was sold through last minute bookings in the last one year. For last-minute bookings, the company charges 5-25% more than regular tariffs.