Back in the day, before the advent of the internet, the world was a much larger place. Budget airlines were only beginning to emerge, and international travel itself was an occasion. Hotels primarily catered to domestic travelers while international guests would mainly comprise of corporate clients. Booking systems for hotels weren’t necessary in this scenario. Marketing could only be afforded by the likes of Hilton and Marriott, leaving independent properties to make do with word-of-mouth.
Things have certainly come a long way since then – independent hotels today attract guests from around the world, and are competing head-to-head with the evolved brands. The internet has been a game-changer for these small and mid-sized properties, enabling them to sell rooms on major OTAs frequented by millions of guests globally. Cloud-based distribution had taken over.
So should your hotel focus more on international guests or domestic travelers? Let’s take a look at what building each segment entails, and the potential rewards.
Domestic travelers – a consistent, source of revenue-
Regional travel is becoming increasingly popular, as millennials begin to flood the spending sector of the economy. As a result, a lot more people are traveling domestically. This is an extremely valuable market for hoteliers. Although regional travelers may not be the most lucrative guests to have, they offer properties a reliable, consistent option for the off-peak months.
Guest loyalty is of especially high importance when it comes to domestic guests – since many of them live a few hours away from the destination, repeat visits are highly probable.
Organizing campaigns and promotions for domestic travelers is also easier, as hotel managers are well-informed of local happenings and the current market scenario. Tools like revenue management systems can especially help with this.
Global travelers – the extra edge for competitive hotels-
With major advancements in aviation technology coinciding with a spurt in hospitality world-wide, the gates to international travel were suddenly flung open to middle-class travelers. As a result, independent regional hotels now had a new audience they could target almost as successfully as the larger properties.
And with sites like Booking.com and Expedia spending billions of dollars annually on marketing and advertising, simply listing on these OTA & GDS portals allows hotel owners to leverage their powerful branding efforts to boost their own occupancy.
Moreover, travelers from countries enjoying a stronger economy are likely to stay for a longer duration and spend more money during their stay. With the appropriate pricing and segment profiling, hotels can generate significantly more revenue from these guests.
Events are another major benefit – hotels in regions hosting popular events such as a major sporting tournament or a music festival can make the most of the inbound travelers to fill their rooms. They can do this rather inexpensively, by simply adopting a theme relevant to the event and screening the show at bars or restaurants.
Challenges to attracting international guests-
Political events, regional unrest and ironically, economic strength can have a major detrimental impact on international tourism. A good example is when the Swiss Franc rapidly escalated in 2011, leaving foreign travelers to look elsewhere for holiday destinations.
Organizing campaigns to attract international travelers can also be quite challenging, as it’s harder to account for all the various factors influencing their booking decision at the time.
There’s also lesser value for hoteliers from a loyalty perspective when it comes to international travelers as they may not travel often to the same destination. As a result, customer acquisition costs on the whole are generally higher.
Hoteliers today are a position of unprecedented strength. They have a variety of markets in front of them, and the world at their feet when it comes to reach. With the right blend of channels and rate management practices, properties can make the best of both worlds – international and domestic – to maximize revenue and maintain occupancy throughout the year!