Process Establishing Seasonality

Process Establishing Seasonality

Process Establishing Seasonality : When determining seasonality for a property, it’s very important that seasonality be evaluated for each segment: Transient, Group and Contract.

Thorough understanding of the three main segments and their individual seasonality trends enables an effective pricing strategy.  The same is true for their sub-segments.

For example, within transient, an evaluation of each sub-segment may shed light on what is driving the overall transient seasonality

Process Establishing Seasonality

Outlined below is a recommended process for determining seasonality.  Once this process is completed and seasonality is determined, it’s important to put a re-evaluation process in place to ensure any changes or shifts in seasonality are caught pro-actively.

Process Of Establishing Seasonality

  • Evaluate Demand and Price Sensitivity
  • Review Historical Pricing
  • Understand Market Share Performance
  • Analyze Competition
  • Consider External Factors

After you have completed this process, you will be ready to set or adjust your seasonal benchmark rates and rate structure as well as your group rates.

  • External Factors

List all events affecting seasonality for the past 5 years and into the future (where possible). The list Should include, but not be limited to:

  • Special events, holidays,
  • School vacations,
  • Weather changes and world events.
  • Indicate specific dates where appropriate.  Utilize the notes column to record any overarching factors that haven’t been mentioned or to elaborate on a specific factor noted.

  • Competition 

This section is designed to help identify which competitors the hotel competes with for which segments of business.

    • Start by listing the hotel’s competitive set down the left side of the grid and your hotel’s major segments of business.
    • Next, indicate which competitors compete for business within each of the segments.  Finally, determine if there are any competitors, outside of your primary competitive set, that compete for the business segments outlined and add them to the grid.

  • Select segments.

    • Using the drop down boxes at the top of the worksheet, select the segments of business to analyze.
    • Once selected, save the spreadsheet under another name and print a copy for analysis and presentation purposes.
    • Suggestion: Select total transient, total group and total contract first.  This will give a baseline understanding of the seasonal trends for the three main segments.

  • Determine season changes per segment.

    • Start with the Historical Demand graph and determine where each segment changes season.
    • Note: A season change is not indicated by a peak or valley, that’s “the season,” the change to be looking for is the transition from the valley (low season) to the peak (high season).  Ideally, pricing would be in place for the transition – going into and out of a specific season.
    • Next, repeat the same process with the
      Price Sensitivity graph.
  • Complete, or obtain the most recent, Competitive Assessment.
    • If the hotel is in a cluster, analyze the hotel in its entirety first, and then compare it to the cluster hotels to ensure it makes sense.
  • Set seasons.
    • Once all of the data is gathered and patterns begin to emerge, set the seasons for each segment and sub-segment.
    • Each should be done independently of the others.
    • After setting seasons for all segments and sub-segments, look at them and how they line up with each other.  Make any necessary adjustments.
    • Season changes can be executed in two different ways:
      • 1) through a rate change, or
      • 2) through a selling strategy change.

In the first approach, a pricing change is made to a specific rate program.

In the second, “Process Establishing Seasonality” a seasonality change is implemented by taking existing rates and changing when they are quoted (i.e., taking the booking rules off of the Stay for Breakfast rate for a period of time).  As in all instances when changes are made to 2 ways-Interface “Channel Manager“, perform test sells to ensure the hotel is selling according to the intended strategy.

If assistance is needed when making changes to 2-ways Interface “Channel Manager“,

  • Price Sensitivity and Demand are not affected by group base as much as other indicators are.

This positions these two indicators as barometers of seasonality against current pricing strategies:

  • When demand is spiking and price sensitivity is going down that could indicate a season change
  • When price sensitivity is spiking and demand is going down that could indicate a season change
  • If demand falls and price sensitivity does not increase that could indicate no season change.

  • Consider transient segment or sub-segment pricing season

    • changes and group patterns separately and then in combination.
    • For example:  If there’s a large group in over the dates of a transient season change, determine if the season should be extended to capitalize on the group demand or if it should change as transient patterns dictate.

Questions and Answer to clarify The whole Picture of Seasonally

  • How did historical pricing decisions affect market share and/or price sensitivity results?

Ensure any cause or effect of past pricing decisions is fully understood so that it can be copied (when there was a positive result) or replaced with alternate strategies (when the results were not what was needed or expected).

  • What external factors were in place that affected the segment under consideration?

Is the external factor a recurring event?  If so, how should the strategy be adjusted, if at all?  If not, evaluate and set the future strategy knowing that the conditions are different.

  • Review external factors that will impact seasonality and may warrant extending .

These factors include (but are not limited to) significant

    • Weather patterns,
    • Holiday placement and
    • School calendars by feeder market,
    • Citywides and convention calendars,
    • Events such as sporting competitions, and
    • New competition / repositioning.

  •  Evaluate changes in competition.

Taking a look at the Competition grid, did any of the competitors for the segment make any changes to give them an advantage or disadvantage? 

  •  Consider the customer’s past expectations for seasonal pricing breaks

    • For instance rates are lower after the Easter Holiday in some destinations).
    • Pricing and inventory strategies need to be set based on demand.
    • This consideration ensures all facets of demand are considered – the target customer for a certain segment of business and their willingness to pay.

  1. How does this work for new openings?

    • New openings can benefit from existing International properties in the market, when one exists.
    • The existing property’s information can be used as a baseline and then considerations such as positioning, location and external factors can be taken into account.  If there isn’t a property in the same market, contact your regional team to determine if there are any in similar markets.
    • In the instance where no properties exist to use as a baseline, refer to the list below to further your analysis.
    • This list should also be used to supplement hotels that are benchmarking against an existing property.

Process Establishing Seasonality / Total Hotel Competitive Assessment

Information from the Marriott development team

Arrival statistics from National and Local tourism or visitor authorities

Airline flight schedules and interviews with station managers

Interviews with the competition

Monthly climate reports for rainfall and temperature variances

Source market climate changes

Source market & local public holidays

School schedules for both local and source markets

Convention or exhibition center schedules, if applicable

Schedules for special events

  • How do you apply seasonality in a cluster?

    • Each hotel must be evaluated separately.
    • Then, once seasons are set for each property, view all of the cluster hotel’s seasons together.  Any changes that occur must benefit the property being adjusted.

  •  What is the right number of seasons?

    • The number of seasons can vary greatly by region, market and property, and can change from year to year; however many properties have four seasons.
    • Seasons also vary in length and can be as short as a
    • few days (i.e., a holiday) or as long as one year.
    • We should however be careful to not have too many short seasons as they can hurt our rate integrity and be hard to manage.
    • In addition, the less complicated the season structure, the easier it is to work with wholesalers.

  • Can different segments have different seasonality?

    • When we evaluate seasonality, we need to evaluate each segment individually as each segment may have different seasons.
    • For example, a hotel that runs around 85% year round may not appear to have seasonality.  However, after analyzing the property, it’s discovered that the hotel mix changed through the year to achieve the basically flat occupancy – group, wholesale and transient seasons were capitalized and utilized to achieve the results.

  • What is the right amount of history to review?

    • Look at up to five years of history – has the seasonality changed over the years?
    • What are the consistent trends?  Chances are you will be able to see a clear pattern of demand and price sensitivity that will tell you where the seasons fall.

 What factors should I consider when deciding whether to extend (or shorten) a season?

Assess each source market and whether/how the holidays change year over year; this affects seasonality.

Monitor school vacation schedules in primary and secondary feeder markets as an indication of where the property may be impacted by fluctuations in demand.

Flexibility is important and the willingness to extend a season based on business on the books, holidays, demand, group base, price sensitivity – and weather.

Groups on the books can extend seasons and provide compression for additional rate opportunities or mini-seasons within a pricing season.

  •  Continually reassess seasonality.

You may not realize you need to extend a season until you get into the segment’s booking window.  The evaluation process should be fluid, not stagnant. 

  •  Focus on customer expectations.

Realize that different seasons can have different customer bases (for example, high season could have more couples, summer / off season could have more families, etc.). 

Also look at the value – what are the customer expectations by season?  People want bargains especially in low season.

  •  How does data integrity affect seasonality decisions?

    • Garbage in, garbage out!  Ensure good data standards are adhered to in the Sales and Catering systems, Front Office systems and 2-ways interface.
    • This will ensure data captured and utilized to make seasonality decisions is accurate.

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