Hotel Booking Windows Are Shrinking. Don’t Panic-Discount.

Glenn: [00:00:00] Hey, my fellow hospitality. It’s your friendly neighborhood. Glenn here, and I got John Schultzel, Chief Growth Officer with me at Olympia Hospitality. Having a lot of fun getting to know this guy over the last year because he’s a straight shooter and tells it like it is. Before we get to him, I want to thank my friends over at Actabl. Actabl, they give you the power to profit. Do me a favor, check them out at actabl.com. All right. So we’re here at NYU IHIF like we’re following some of the other conferences. I’ve been to a lot of unearned optimism, and I’m try to be as optimistic as I can. But lately I have not been I want to go to you. I feel like you’re going to tell to me straight what is really going on right now. And before you start, tell us where your hotels are located so they could.

John: [00:00:45] Yeah, we have a geographically, our home is New England, Portland, Maine, but we operate up and down the East Coast and as far west as as Colorado. So we get to see a lot of different things. But in the spirit of misplaced optimism or or accurately placed optimism. Having been through a couple of cycles in Maine and New England in general, when we get into these periods of economic stress, and I mean that globally and locally, we actually see shallower troughs. And actually we believe there is room for optimism. You know, $4.50 gas doesn’t keep people from getting on the highway and driving to a destination instead of flying. And we tend to benefit from that. So for us, I think it’s actually we care more about the weather forecast for the coming weekend than we actually do about the macroeconomic stress, because we think people are going to get in their cars and go, all.

Glenn: [00:01:34] Right, so let’s break that down a couple, a couple of little different points there, which I all agree with you. I’ve been saying for decades that people aren’t going to cancel trips because gas is going to cost a little bit more, right? Americans fundamentally feel like it’s a right to travel. What might change is the flying thing to driving, like you said. Or maybe they won’t drive 400 miles. They’ll drive 150 miles or something like that.

John: [00:01:59] We’ve always used it as a tank of gas. Yeah. Right.

Glenn: [00:02:01] Yeah. And the weather thing also makes a lot of sense because my entire 30 year career, I’ve been hearing about shrinking booking windows. And now basically people are booking the trip two days after they’ve stayed. If that’s outside the booking windows are right. So the weather thing makes a lot of sense because you’re probably on Wednesday looking at your phone going, are we going to go away this weekend?

John: [00:02:18] Yep. And the booking pace is a little bit off. And so the pessimists are going to say, oh, booking pace is off. It’s a negative sign for us. It’s it’s people really taking more of a wait and see approach. It’s like, okay, we’re going to be able to a, the rooms are going to be available because not everybody’s sold out already. And then you can sort of make a, you know, game time decision on Wednesday or Thursday, whether or not you’re going to hop in the car. And chances are there’s still going to be room inventory in destination markets. We’re sort of seeing that. So we think the booking window is going to be sort of hyper short. It’s a little bit uncomfortable to sort of like take a wait and see approach. We’re really trying to manage pricing, not overreact to discounting way out.

Glenn: [00:02:55] Well, you can’t discount your way out. You could give people an extra drink at the bar or something like that. But I think discounting is the worst thing.

John: [00:03:03] I think our industry has gotten a lot smarter about that over the last they have.

Glenn: [00:03:06] But I remember after the Great Recession, there was a lot of discounting, and I think that there was a lot, a lot less professionalism in it. Not that they weren’t professionals, they just didn’t have the skills yet. It wasn’t as mature of an industry. And I think people have learned that even if you’re a mom and pop business, you lower your rates. It’s not going to help you. So to put us back on track, if they’re booking at such shorter booking windows, how do you compensate with connecting with that customer? So you’re there when they’re ready to say yes.

John: [00:03:35] Part of it is the technology piece. And I think we’re all getting better at using it, but maintaining more of a constant conversation, especially on the boutique independent space where we’re really in charge of it ourselves, as opposed to relying on our franchise partners to do that messaging for us. You know, part of it is just how clever and thoughtful you are about advanced promotions, what your messaging is going to be like, and then what rate plans you have out there. I agree with you. I mean, it’s it’s tempting when you just want to get something on the books. Yeah. To just put it on there with rate. But I think you can put it on there with creative packaging and promotions. It makes a lot of sense. And then people do believe there’s a value proposition by booking at the last minute. Right. And so do you have to play a game of chicken with your pace. Yes you do. Right. Will it pay off if we all do it together? Yes it will.

Glenn: [00:04:18] And the whole point is not to blink.

John: [00:04:21] Don’t overreact.

Glenn: [00:04:22] But. Right. Don’t overreact. But but setting yourself up for success. Be prepared. And that’s where creating interesting packages from giving people things they would not have otherwise maybe had access to would work great. I would recommend paying attention to all the local events going on in your area. Maybe there’s a cool concert or something like that. Do a happy hour focused for those people at your bar.

John: [00:04:42] Absolutely. You know, one of the things we always say in our group, because we do operate a collection of small boutique hotels, is a lot of times we’re actually marketing the destination more than we are marketing our individual hotel asset under management. And so leaning into that goings on that are happening, you know, on the sidewalk in the pavilion are really where we get the food for our our marketing campaigns because, you know, local sounds like it’s like a cliche thing. It really isn’t. It’s why people are traveling.

Glenn: [00:05:08] It’s not. And we it’s kind of like we don’t look at it enough. We. You are inextricably linked to where you are. And I don’t know a lot of people that are saying, I want to go to X, Y, Z hotel. It’s typically I want to go to X, Y, Z city, and then you get in the conversation for the hotel. Unless of course, you’re a destination resort, blah, blah, blah, that kind of a thing.

John: [00:05:29] My good friend and colleague, Sarah Masterson taught me this years ago about pre-arrival messaging and, and marketing and promotion, which is, if you know, rain’s coming, change your images. So one of the things that we do is that, you know, people may not be going out on the coast to enjoy their weekend, but if they can cozy up by the fire and have a cozy indoor weekend at a boutique destination, you just have to change the vision.

Glenn: [00:05:52] Oh my God, that is so simple, simple and clever because you’re priming the audience to give the response that you’re looking for, as opposed to set themselves up for going crap, I want to be in the sun now.

John: [00:06:05] Yeah, you have to have the right digital assets. You have to think about it. But but our team has learned how to pivot with the forecast, which means we just have to recreate the vision. And if that means you’re doing more indoor shots and restaurants and dining, because those things are really independent of the weather, then you just pivot and do the best you can.

Glenn: [00:06:20] Where are the where do you think the biggest opportunity to get closer to the customer is right now?

John: [00:06:25] Oh, I think we’re all sort of saying the same thing in terms of using artificial intelligence to help us understand that better and do it more quickly and in in, in a way that still feels somewhat genuine. We’ve always been a little bit reluctant to automate stuff because it doesn’t come with our voice. It doesn’t look the way we want it to, but I think we’re starting to trust the tools more so that they can sort of customize the message with the voice to the consumer whose habits we know from prior visits and really try to make that feel the way it’s supposed to and be able to do it more frequently with more automation.

Glenn: [00:07:00] Yeah.

John: [00:07:01] I mean, that’s not a new answer. No, no, no. The way we’re sticking with.

Glenn: [00:07:04] But hey, listen, the fact of the matter is, John, if that’s the way it is, that’s the way it is. We don’t need to go crazy cuckoo solutions if there’s something staring us right in the face.

John: [00:07:13] Well, I think the AI conversation has always been about, you know, how do you use it for efficiency? And, you know, we’ve never viewed AI as a replacement for staffing, but it does allow our marketing team to do more in the same amount of time. And it does allow us to automate all the stuff on the back end so that when you do arrive, you know, we’re available to you.

Glenn: [00:07:30] Well, glad you feel that way because that seems like all the mega corporations are realizing that maybe human beings are pretty good too.

John: [00:07:36] I think our industry is going to be one of the case studies for industries that didn’t have AI replace the entire job corps.

Glenn: [00:07:44] Yeah. No, I’m telling you, I think you’re right. From two years ago, I had the honor of being a keynote speaker at a high tech. And I was preaching keeping the humanity and hospitality. And I’m proud of our industry for using technology and in the right spirit of. We can do more with less, not fewer people, just less resources that we that we currently have.

John: [00:08:04] Our industry is going to be able to offer humanity in an era where humanity is sort of a declining resource. And so I think we have we have a lot to be excited about.

Glenn: [00:08:13] Yeah, man, I think that’s the that’s the edge. I’m seeing young people. My children are Gen Z. They’re starting to reject technology in a lot of instances. And I think the human interaction, the hospitality environment can find a lot of opportunity. Couldn’t agree more. Yeah. And not, not those stupid PR things where they’re like we’ll put your phone in a safe for the weekend. More meaningful, more deeper. Something that connects people. I think that might be why wellness is taking off as well.

John: [00:08:39] Yeah, I think it’s all part of the same malaise as we’re trying to combat. Yep. Yeah.

Glenn: [00:08:41] All right. So more to come on this. I’ll talk to him probably the next time we’re at an event together because we always have a good time chatting. So he’s John I’m Glenn, you are going to like, share and subscribe right now. I know you will. Thanks so much. Love you guys. Bye, everybody.

John: [00:08:55] Yeah.