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You may have noticed that my previous articles have been shorter than usual…this is because I’ve been preparing a rather thorough report for you to read and reread during the summer: a detailed analysis of 600,000 reservations.
Below you will find some excerpts from the infographic, along with my personal comments on the points which I find interesting or which require immediate action.
Please feel free to share this study of our hotel market. You may be surprised by some of the results!
The analyzed reservations were taken from a selection of hotels in France during the following periods:
- First quarter of 2016 (January – April);
- First quarter of 2017 (January – April).
The primary goal of this infographic is to improve your understanding of the market. But it also serves a secondary purpose: to compare 2017 to 2016, which was a difficult and tumultuous year, and draw some conclusions from the results.
In 2016, the average cancellation rate was 18% (all reservation sources combined). In 2017, this rate jumped to 24%.
This means that 24% of guest reservations are likely to disappear even before the guest arrives at your hotel. It is crucial that you take this figure into account while working on your forecasts.
If we take a closer look at this figure, we find that the biggest leap in cancellations comes from tour operators, who rose 7 percentage points, from 20 to 27%. However, tour operators are not the real source of the problem, for nowadays they only account for a small number of reservations. The rise in cancellations is actually caused by Booking.com, whose cancellation rate increased from 31 to 33%. These two “little” percentage points, when applied to the scope of Booking.com, amounts to a major difference for hotels.
No big changes with regard to the main sources of reservations here in France. French, English, and American guests still make up the Top 3.
However, we note the following for 2017: Germany, Switzerland, and Spain have risen up rankings, while Belgium, Italy, and Romania have fallen.
From now on, it might therefore be a good idea to also have your website and customer communication tools translated into German and Spanish.
Length of stay
The infographic reveals its first major surprise: a 23% drop in the average length of stay. This duration, which was 3.2 nights 10 years ago, had already dipped below the 3-night mark. But now it’s approaching 2 nights!
More specifically, it’s the 4-night stays (or more) that have dropped and not the 3-night ones, which means we’ve yet to hear the last from the famous “3-night package!”
The most significant decrease involves extremely long stays, or those of 10 nights or more.
Type of guests
The analysis reveals the following differences between 2016 and 2017:
- 4% more tourists;
- 2% less businessmen;
- 2% less people coming for a seminar or trade show.
These differences are hardly surprising considering the criminal events of 2016, which clearly had a negative impact on the market.
In the image below, you will see an increase in the number of couples and families but a dip in the number of solo travelers:
Is something causing travelers to behave differently? I’m not sure. I think the results simply reflect a return of tourists to our beautiful country.
We’ll have to keep an eye on these figures to see what happens in the long run.
Average amount spent
Second big surprise of the infographic: a 21% drop in the average amount spent!
Is this really a surprise? Yes and no! In fact, this percentage only takes into account the figures analyzed above on the average length of stay. If we break the reservations down into categories based on average price, we mainly see a decrease in those reservations over €600.
We can therefore conclude that the “recession” is being caused entirely by long term reservations.
The final criterion deals with the average number of days between the purchase of the stay and the guest’s arrival.
Two things stand out here:
- On average, people reserved 3 days earlier than in 2016;
- 36% of reservations were made for the same day.
We see two sharp increases, both in advance bookings and those made at the last minute. It is therefore imperative that you prepare Early Booking and Last Minute rates.
The full Infographic: