Why Hotel Marketers Must Think “Backyard and Bundle” When Demand Returns
[Updated July 8, 2020]
I wrote something in the early days of the pandemic as part of HospitalityNet’s world panel to help hotel marketers think about their “Post-Crisis Marketing Action Plan.” And, while I’d definitely recommend that you read the fantastic advice offered by the entire panel, I keep coming back to one item again and again. That is the need to think “Backyard and Bundle” as you plan for your market’s recovery.
The piece on HospitalityNet explains:
Think “Backyard and Bundle.” While it’s possible that the economy might come roaring back, given the larger economic effects and potential for lingering concern on the part of guests, it’s also likely that they may want to stay closer to home, have less to spend, or simply want to keep a little money in their pocket for the next big shock to the system. There’s a clear downside to discounting your product. But you should also think about offering packages or promotions that allow guests to get the most bang for their buck, especially with drive and local customers.
As the pandemic, its related recession, and the recent attempts at recovery have evolved, that doesn’t just look like a good idea. It may be your only real option to attract guests and revenue for your property. Here’s why I think “Backyard and Bundle” increasingly makes sense as you plan for the future.
Air Travel Will Take Longer to Recover than Drive Market Business
The single biggest factor driving the need for Backyard and Bundle is that air travel to your destination is going to take longer to recover than drive will. Some experts suggest that it’s will be five years before air travel return to pre-crisis levels and that Covid-19 represents “an existential threat to airport business.” That seems overly pessimistic to me people are still booking cruises(!!!), for Pete’s sake,which seems much higher risk than air travel.
At the same time, it’s undoubtedly true that air travel is taking a huge hit. Demand during the first few days of July is still down 70% year-on-year. United Airlines has signaled they may lay off as many as 36,000 workers later this year nearly half of their staff1. And that’s before we get to the fact that most Americans are banned from flying to Europe and few would blame European travelers from avoiding America at the moment.
Of course, even if travelers could fly they may fear or lack the money to jump on a plane for a while even after the recovery truly gets started.
Consumers May Fear Risks of Air Travel and Want to Stay Closer to Home
As I noted the other day on our Covid-19 resources page, guests will absolutely need clear assurances of health, financial and emotional security before they’ll be ready to travel again. Getting in a car and driving a couple hours from home is less risky and less costly than flying in most cases. That suggests that drive market business will provide a greater share of your guests even as travel overall itself starts retiring to normal.
Government Restrictions Continue to Limit Air Travel
As I’ve already talked about government here, actions are going to play a role with regard to air travel for a while. Europe has banned Americans and Russians, some states require a quarantine depending on where you’re coming from, and all that. You obviously don’t want to wait for air to return to get your fair share of whatever travel demand exists or lose out on two-plus weeks of potential revenue.
How to Make “Backyard and Bundle” Work Best for Your Hotel
So, it’s pretty clear that you’re going to need drive market business to support your property as both your market and your feeder markets recover. But what would that look like in practice? Here are a few ideas from that same HospitalityNet panel article for putting a “Backyard and Bundle” approach to work for your hotel .
Sell Your Destination First
Anytime we face difficult times, it’s important to get back to the basics of why guests travel. And that starts with the fact that you want to sell your destination first. Data from Within.co’s Retail Pulse https://go.within.co/retail-pulse/ and Morning Brew show that overall consumer internet use is skyrocketing. While travel hasn’t yet started to see similar patterns, it’s a given that guests will want to start exploring the world around them once they feel it’s safe to do so. You can’t afford to be late to the party here. Your content and your website need to answer guest questions and sell the destination in an appealing, persuasive way.
You don’t need to go it alone, either. As noted in the article,
Partner with other local businesses all of whom will also be looking to dig out to create videos, content, and offers to help attract travelers to your destination. OTAs have invested heavily in content over the last few years. Don’t let them reap the rewards. Instead, demonstrate directly why your destination in special and the right choice for guests venturing out again.
This may work with folks a little further away too. Again, from my HospitalityNet writing,
Of course, you don’t want to think only of the “backyard and bundle” crowd. You also need to cast a wider net. This is a little bit “old school” or “Hospitality Marketing 101,” but before guests can choose your hotel, they need to choose your destination.
My recent piece on Hotel News Now takes this idea further, explaining why you need your digital presence to do the heavy lifting for your hotel in troubled times. OTAs and intermediaries are investing in these efforts right now so that they’re best positioned to capture interest and demand once it returns. They won that fight in 2001-2002. They won the fight in 2008-2009. How many times must we as an industry learn this lesson? We simply cannot allow OTAs to win this fight again.
Speaking of the OTAs: Why Expedia’s Partner Recovery Program May Be Bad for Your Hotel
So, yet another Hospitality Net World Panel asked whether Expedia’s Partner Recovery Program is a wolf in sheep’s clothing or real help? The fact that you have to ask the question ought to give you some clue as to the answer. However, if that’s not enough, here are my thoughts on the offering:
Maya Angelou famously said, When someone shows you who they are, believe them. Expedia is not a wolf in sheep’s clothing. It is a wolf in wolf’s clothing. That doesn’t make them evil. They’re just doing their job. Expedia’s job the job their shareholders expect of them is to acquire as much inventory as possible to attract as many travelers as possible. Without access to all of the inventory from each hotel it displays, Expedia’s value proposition fades. Chains and independent hotels have increased their use of member rates and book direct offerings over the last couple of years, which hurts Expedia as the one-stop shop it must be to deliver on its value proposition. It’s no coincidence that Expedia has faced increased competition from Google at the same time that book direct campaigns have thrived.
Never one to let a good crisis go to waste, Expedia is using the existential risks facing many hotels right now as an opportunity to regain access to your inventory — all of it. Whenever Expedia says they’re doing something solely in the interest of hotels or the industry it’s a good time to keep an eye on your wallet. Just as we saw after 9/11 and the Great Recession, Expedia views the current downturn as a way to (re)position itself as the default choice for travelers by ensuring it has access to 100% of your hotel’s inventory.
Does that mean you should avoid their partner recovery plan? Yes, with one caveat. That one caveat: Your job during the current downturn is to survive. Do what you must to get through the current situation. Yes, it’s likely a short-term win at best if your property does well on Expedia during this recession. And there are almost certainly ways you can attract your fair share or more from the relatively small number of travelers in market at the moment without giving away access to inventory you’re better served keeping for direct channels. Using a backyard and bundle strategy to reinforce your property’s value proposition can offset many of the benefits you might achieve from OTA’s. That doesn’t mean you won’t use them. It just means you won’t give up more to them than necessary to gain the “benefits.” But, if you’re facing imminent financial peril, you’ve got to do whatever it takes to stay solvent. Ideally, you can manage that without letting the wolf further inside your doors.
The Bundle Component of Backyard and Bundle
It’s obvious what backyard refers to when we’re talking about Backyard and Bundle. But what about the bundle part? Really, it’s about how you package your product to show value to guests who are definitely stressed and potentially strapped for cash. For instance:
Focus on value-adds in your promotions and offers that help you hold rate, but show clear benefit to the guest. And target those first to the people for whom your property is closest to home.
It’s also likely that guests will want to spend time with their families and friends, many of whom they’ve been forced to isolate away from throughout this crisis. Consider offers that encourage and reward multi-generational travel, girlfriends’ getaways, etc. And it will be time to test geo-targeted mobile offers to increase share of wallet for folks already in market once they’re traveling again.
Use Paid Search and Meta to Harvest Demand
Of course, your content only works if your guests see it. And that’s why you must use paid search and meta to harvest demand that exists. Many of our clients are receiving ROI-positive bookings right now for future dates because they’ve continued to let their paid search and metasearch campaigns run. As I argued in HospitalityNet,
Keep meta and paid search running later and right now. Meta and paid search spend automatically declines as demand declines. The single biggest problem at the moment it’s that there’s limited demand. Shutting off meta and paid search removes you from consideration among anyone even thinking of travel. Or those looking in advance of when they can travel again. It also may hurt your ranking relative to those who’ve consistently kept their media running even at the lower levels that match current demand. Waiting until the downturn ends might put you at a disadvantage to those who’ve kept the lights on during the current period and takes you out of consideration of anyone who needs to travel right now.
The great thing about both paid and meta is that, if you run them properly, you’re paying in exchange for booked revenue. Guests who book cover the cost of getting in front of a wider audience. And with ROI’s currently running 8:1, 10:1 and greater, it provides you bookings at a far lower cost than OTA business.
If you’re looking for some specific details on how to target drive markets on email and paid search, you’ll definitely want to check out Fuel Travel’s excellent “how-to guide” on the topic.
“Backyard and Bundle” Conclusion
Travel isn’t coming back tomorrow. The best case scenario is that we’re still facing months of uncertainty before the overall travel picture clears up. But, it seems undoubtedly true that your first guests will come from local and drive markets.
Air will take some time to recover due to financial and emotional concerns from travelers and from government restrictions continuing for a longer period. Customers will choose to stay closer to home for reasons of safety and cost.
Your destination offers “backyard travelers” a way to get out of the house, explore a little, and earn a little relief during a troubled time. They’ll choose your destination, and your property, if your content and your overarching digital presence helps answer their questions and fulfill their needs. Your local partners can and should provide additional resources to enrich that content and the offers your provide your guests.
Build on your content with metasearch and paid search to affordably reach guests at time of need without relying heavily on OTAs. Adjust budgets where needed, but remember you’ll likely have more money available than demand at the moment. Put your money to use the right way to gain the greatest benefit.
Travel will come back. Guests will come back. Your business will come back. The key is to focus on where you can find that demand and how you can convert that into revenue for your property. Right now, the data shows that they best way to do that is to think about your local and drive market guests and to put together offers that provide a great value for their limited travel budget. And that’s why “Backyard and Bundle” offers you the right path to success as the travel recovery begins.
Note: I suppose it’s possible that United is threatening these layoffs at least in part to exert political pressure for some bailout relief. I’m not going to make any guesses on that one way or the other at this point, but I’ll be watching closely.
Previous updates about Backyard and Bundle:[Editor’s note: The following items were originally included and have been moved here for your reference. Any insights or items removed from earlier versions of this post will be archived here unless they contain factually inaccurate information. However, the information posted in this section is likely out of date and may no longer be entirely accurate.]
Isreal’s Post-COVID Re-opening Plan — [published April 15, 2020]
For instance, Israel has released its plan to restart its economy, opening hotels and restaurants in Phase 3 of its efforts and loosening air travel restrictions in Phase 4. Given that there’s a two-week pause between each phase if Covid-19 cases spike, air travel can’t even begin to rebound until hotels have been back in business for a couple weeks. And I wouldn’t be surprised if other countries follow similar paths as they restart their economies and attempt to get travel back in business. [Editor’s note: This one was certainly on the money. All our predictions should go so well. ]
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