Hospitality execs on competing with rentals, driving more loyalty

The hotel sector is continuing to see strong performance in most countries outside of Asia, with RevPAR in the United States expected to pass 2019 levels by nearly 8% this year, according to data from STR. That trend is expected to continue in the coming years, with STR predicting RevPAR, average daily rates and occupancy in the U.S. will grow each year through 2025.

But even with this positive data, hospitality executives recognize that they are competing with short-term rentals for consumers’ lodging spend. 

According to Phocuswright, global short-term rental gross bookings are projected to grow 20% this year to $137 billion and should exceed $184 billion in 2026. And in the U.S., Phocuswright finds 64% of those that booked a rental considered a hotel for their stay.

In a session at The Phocuswright Conference, Executive Panel: Hotels – Holding the Line, hospitality executives acknowledge they need to better understand consumer wants and needs – and to communicate more effectively about why their properties are the right choice.

“We need to do a better job of understanding what that trip occasion is and what the requirements of the customer are for that stay and then meet those needs,” says Drew Pinto, global officer for global sales, distribution and revenue management at Marriott International.

“And it all comes down to asking questions and then being very clear about the product that you offer.”

And says Dorothy Dowling, who served as global chief marketing officer and senior vice president of sales for Best Western Hotel Group for more than 17 years, hotel companies need to “tell the story” more effectively – not just regarding the products and amenities they offer, but also about the work they are doing related to sustainability and diversity since these factors are very important to younger generations. 

“Gen Z and millennials will hold us accountable,” she says.

Panelists also discuss staffing, new revenue opportunities and how to drive more app engagement and loyalty.

“Our mobile app is critical,” says Robert McDowell, chief commercial officer at Choice Hotels International.

“How do you expand it so the app is the first travel app they go to, the credit card that is associated with the loyalty program is top of wallet. So there is an ecosystem for our set of customers that really look to us as their travel provider and we continue to want to lean in and engage with them.”

Watch the full session moderated by Phocuswright Research founder and analyst Lorraine Sileo in the video below.