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during the national day golden week, high occupancy rates and high prices can only guarantee one?

2024-09-30

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there is only one day left before the start of the national day golden week, and people who "please take 2 days off and 10 days off" have begun to enjoy a wonderful holiday. the hotel also ushered in the most important sales season of the year in the traditional sense.

can the hotel take advantage of this year's last opportunity to improve performance and make a comeback?

let’s first look at the fundamentals—the performance of the tourism market.

according to the market forecast data released by major ota platforms, travel orders during the national day golden week are booming across the board. the "2024 national day tourism forecast report" released by ctrip group pointed out that domestic travel numbers and tourism consumption are expected to hit record highs. li yang, vice minister of the ministry of transport, introduced at a press conference of the state council information office on september 27 that the cross-regional movement of people throughout society during the national day golden week holiday will reach 1.94 billion, with an average of 277 million people per day. amap's "2024 national day holiday travel forecast report" predicts that there will be peak highway outbound congestion from 9 am to 12 am on the first day of the holiday (october 1), while the return peak will be concentrated on october 5 and 6 in the afternoon session.

the above trend forecast shows that during this year’s national day, a large number of tourists will flock to major popular tourist destinations. "the tourism market during the national day golden week in 2024 will usher in explosive growth" has become a unanimous judgment, especially for long-term travel and outbound travel.

doesn’t it sound exciting? but don't worry, we have to analyze it calmly.

although tourism data is improving and the market is very lively, especially in popular destinations, behind the excitement, the prices of air tickets and hotels are much more affordable than last year. air ticket prices have dropped, and hotel prices have generally fallen. everyone wants to get a piece of the pie during this golden week. after all, starting from q2, the overall hotel operation has been very difficult.

taking the mid-autumn festival that just passed as an example, most hotels did not perform well in terms of occupancy rates and room prices. qunar data shows that compared with last year’s mid-autumn festival, hotel prices are about 20% cheaper. among the top 100 destinations for hotel bookings, 30% have the same price as in the off-season, including many popular tourist destinations such as yili, changzhou, wuhan, changsha, xi'an, qinhuangdao, beijing, shanghai, nanjing, and zhengzhou.

will hotel business be good during the national day golden week?

specifically, how is the business at the national day golden week hotels? maidian chatted with several people in the industry.

zhao huanyan, a senior economist in the tourism and hotel industry, said that this year’s national day hotel market is expected to be relatively stable, with little change expected. according to xia zifan, chief consultant of the asia-pacific region of lausanne hotel management agency, the overall occupancy rate of national day hotels is good, but prices will not rise, and only some areas will rise slightly.

"staying the same as last year" has become a common perception, but many front-line hoteliers said: "being the same as last year" is already the best result.

mr. a, general manager of a high-end hotel in shaoxing, told maidian - our goal is to be the same as last year. at present, the overall traffic is not as good as last year, and it is difficult to achieve the goal. mr. b, who is also in the high-end hotel group, also said that the number of reservations made one week in advance is decreasing, and he hopes that consumers who are more likely to book hotels the day before departure can bring a wave of traffic. the argyle hotel group, which has several projects located around cultural and tourism scenic spots, said that thanks to the diversion of popular tourist destinations and rich national day tourism activities, jiangsu zhenjiang xijindu argyle pudi hotel and other hotels have achieved good bookings.

mr. yao jiajiang revealed that the current booking volume in jiangsu and zhejiang is not bad, reaching 70-80%, but it is mainly concentrated on the 2nd to 4th, and the booking situation after the 5th is slightly worse. this year, it is obvious that high-priced housing types cannot be sold, while basic housing types can maintain their previous levels without a premium. overall it is quite challenging, especially in oversupplied markets such as anji.

data released by huazhu group also shows that as of september 23, the overall booking rate of hotels during the national day holiday was basically the same as last year. among them, the overall booking rate of high-end hotel brands such as huajiantang, meilunmeihuan, shibago and shibago grand view was compared with that of last year. there was an improvement during the national day holiday last year. among them, huajiantang and meilunmeihuan increased by 5 percentage points and nearly 8 percentage points respectively.

in the high-end hotel track, maintaining stability and making slight improvements have become the basic development trend. converging with this is the mid-range hotel track.

mr. c, who has invested in many hotels in xi'an, said that the overall booking situation this year is very good, especially for no. 1 to no. 4, but the average price is not as high as last year. the long ritz hotel, which has many stores in beijing, said that its current pre-sales are concentrated in first-tier cities, beijing and shenzhen. for example, the long ritz hotel beijing tiananmen square qianmen subway station, the long ritz hotel shenzhen luohu port branch and other hotels near scenic spots the peak occ of the store exceeds 80%.

in addition to these hotel brands, milestone discovery serviced apartments has also joined the battle for the national tourism accommodation cake. ascott china said that so far, bookings in shanghai, hefei, macau and other places have been higher than last year. “thanks to our long-term guest base and ascott’s membership program, the national day holiday is a good time for long-term guests to change cities for leisure vacation, and they often choose to stay at ascott properties in another city. in september, the four new stores opened in hong kong, nanjing and changsha were also very popular.”

judging from the current hotel booking situation, it is no longer possible to make a fortune by "increasing both volume and price" during the national day. here comes a more serious question - should i protect the quantity (occ) or the price (adr)?

insure occ or adr?

"occ or adr, which kind of insurance will the hotel provide?" faced with such a problem, hotel general managers often have a hard time making a choice. xia zifan’s views represent the aspirations of most hoteliers: “hotels definitely want to take both into consideration and maximize benefits by increasing room rates while doing a good job in occ. however, in actual operations, they often need to make flexible adjustments based on market feedback.”

for many hotels, maintaining high occupancy rates is key to boosting revenue. especially during peak seasons like the national day golden week, high occupancy rates can not only bring direct room fee revenue, but also increase non-room fee revenue through other value-added services such as catering and conferences. therefore, many hotel brands tend to increase occupancy rates through price reduction promotions and increased room availability. taking the longlitz hotel as an example, despite facing the challenges of market changes and its own opening structure adjustment, the store still takes actions based on the current market conditions and strives to maintain the occupancy level compared to the same period last year. this strategy helps stabilize brand image and market share, laying the foundation for long-term development.

guaranteed adr also has its irreplaceable value. high room prices can not only directly increase the hotel's income level, but also reflect the hotel's brand value and service quality. during the national day golden week, some high-end hotel brands, such as huajiantang and meilunmeihuan, maintained high room rates by improving service quality and increasing added value. however, maintaining adr also faces many challenges. on the one hand, excessively high room prices may scare off some price-sensitive tourists; on the other hand, if hotel service quality and tourist experience cannot match the high room prices, it will have a negative impact on the brand image.

faced with the current hotel booking situation, many hoteliers are already weighing their concerns.

many hotel general managers have said they dare not raise prices this year, and may consider a small increase later when bookings increase. mr. a, general manager of a high-end hotel in shaoxing, also believes that occ is the priority, but said that he will set an adr bottom line. mr. c, who has invested in many hotels in xi'an, is also lowering the average price to help occ.

mr. b, a high-end hotel group, believes that preferring adr when bookings decrease can reduce some labor costs and improve employee satisfaction through time off. the general manager of a hotel in beijing also chooses adr, "the traffic of this store in beijing is not bad, so we can still make some profits during national day."

respond flexibly, you can have both needs and wants

the drums of war during the national day golden week have already sounded. at this critical moment, should we use price reduction promotions to attract more tourists and increase occupancy rates, or should we stick to the bottom line of prices and win reputation and revenue by improving service quality? everyone has different trends based on their own project situations and the market conditions they face.

is it possible to protect both occ and adr? maidian believes that during the long national day holiday, “the need for both different locations and time periods” is promising.

from a spatial perspective, bookings for hotels around popular tourist destination cities and scenic spots are already booming, and occ and adr are being actively implemented. for hotels in non-core areas, mid-range economical hotels with no shortage of passenger flow have launched a general attack on adr. high-end hotels with little room for adr growth give priority to improving occ. among them, hotels in counties where demand exceeds supply can still gain market fans under consumption models such as reverse tourism.

in the time dimension, current booking data shows that hotel bookings have increased in the first half, but the response in the second half has been mediocre. this is mainly because the national day holiday is long, and more casual consumers tend to choose accommodation products the day before travel, or even when they have already arrived at the tourist destination. this provides hotels with greater operational space - proactively adapt to market changes and improve bookings for the second half of the holiday through flexible adjustments in price systems, revenue management, content experience and other aspects.

in terms of hotel brand quality, high-star hotels give priority to occ due to limited growth, and can adjust adr appropriately when bookings increase; mid-range and budget hotels have gained sufficient support from occ as they are friendly to price-sensitive consumers. guarantee, we are actively exploring the possibility of increasing adr. during this process, it has become a consensus to enrich hotel activities and improve service quality.

on these basis, the core still needs to achieve flexible price adjustment through dynamic price adjustment and differentiated pricing. for example, room prices can be dynamically adjusted based on market supply and demand and booking conditions. increase prices appropriately when demand is strong to obtain higher profits; lower prices when demand is low to attract more guests. in addition, differentiated pricing strategies can also be implemented for different customer groups and room types. for example, provide luxury rooms and value-added services to high-end customers and charge higher prices; provide basic room types to economical customers and keep prices relatively low.

this year’s national day holiday focuses on flexibility. what the final situation will be will be known after the national day.