Gabor Hevessy_Changing Patterns in Hotel Room Demand

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Changing Patterns in HotelRoom Demand

Case Study of the AquaticumThermal and Wellness Hotel****

Gbor Hevessy Ph.D., University of Debrecen

International Conference on Tourism and Sports ManagementDebrecen, Hungary, 27-28.05.2010

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Contents

Introduction Methods

Results

Guest arrivals andmarket share in the past years

Time of making the reservations by the guests

Booking curves

Reservations received through the Hotels website

Conclusions

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Introduction The 4-star Hotel was built in 1998 on the top of

the Thermal Bath building which was built in

1984.

Located in the first nature conservation area ofHungary, in the heart of the Great Forest.

It has 40 apartments and 56 double rooms.

Totally renovated inside in 2007.

The Mediterranean Water Park can be

accessed directly from the Hotel.

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Methods

Primary data were obtained:

by field research

from data collected in the

Hotel this year and lastyear.

Secondary data were obtained:

from the database of the Hungarian Central Statistical

Office

from the Hotels databases (2006,2007,2008).

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Methods 9678 room reservations and

price offer requests have

been analyzed.

These enquiries were sentbetween 01.01.2009. and

31.03.2010.

The analyses and

comparisons were carried out

by means of the software

Microsoft Excel 2007.

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Guest arrivals

From Hungary

From abroad

- More guest arrivals from Rumania and from Slovakia.

- Demand from Germany decreasing.

(Source: Aquaticum Hotel database)

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Ratio of guest nights

The ratio of the domestic and foreign guest nights has

changed. In 2007 the proportion of domestic guest nights

was 82%, in 2009 it was 76%.


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Ratio of guest nights


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The ratio of the domestic and foreign guest nights has

changed. In 2007 the proportion of domestic guest nights

was 82%, in 2009 it was 76%.


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Guest nights spent in Hotels

Despite the global economic downturn, the Hotels market

share of guest nights spent in the Hotels of Debrecen and

in the Hotels of the region was greater than ever before.

Debrecen

North Great

Plain Region Aquaticum Hotel

Marketshare

(Debrecen)

Marketshare

(Region)

2006 318 322 1 237 761 52 348 16.4% 4.2%

2007 304 510 1 252 821 48 602 16.0% 3.9%

2008 288 800 1 243 771 56 525 19.6% 4.5%

2009 232 162 1 081 029 54 159 23.3% 5.0%

(Source: Hungarian Central Statistical Office, Aquaticum Hotel database)

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The time of sending inquiries by

the guests

- Weekdays are much busier than the weekends.

- Most of the inquiries have been sent during the business hours.


By day-of-week

By hour-of-day

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the guests


By day-of-week

By hour-of-day

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the guests


By day-of-week

By hour-of-day

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the guests


By day-of-week

By hour-of-day

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Booking curve of the New Years

Eve


In 2009, 60 days before arrival the occupancy rate for the New

Years Eve was only 52% while in 2008 the occupancy rate was

92% 60 days before arrival. In 2009, a significant number of

bookings are still taken, in the 40- to 15-day window prior to arrival.

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Eve






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Eve






52%

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Eve






52%

92%

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Eve


- Much fewer reservations on hand 60 days before arrival than ayear before.

- What should a Hotel do in this disappointing situation?

52%

92%

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Eve


- Price reduction?

NO!

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Booking curve of the New YearsEve


98%

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- Price reduction?

NO!


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Booking curve of the New YearsEve


- Price elasticity of demand for a Hotel room is not a simple question.

- The study of the Hungarian Association of Hotels pointed out that in spite

of the decreasing rates the demand for Hotel rooms unfortunately did not

increase dramatically.

98%

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Booking curve of the NationalHoliday (15th of March)


In 2010, 11 days before arrival the occupancy rate for the 15th of Marchwas only 36%! Finally, the Hotel could reach 92%! Almost 61% of the

reservations were received in the last 11 days. Such a great increasing in

an 11-day-term had never been registered before.

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36%!

92%!

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61%

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Reservations received for 2009through the Hotels website


The Hotel received 3890 bookings through their website for 2009.These bookings were made by individuals.

This chart shows that the proportion of room nights booked through

the Hotels website by individual guests has a growing tendency.

2009

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Reservations received for 2009through the Hotels website


The Hotel received 3890 bookings through their website for 2009.These bookings were made by individuals.

This chart shows that the proportion of room nights booked through

the Hotels website by individual guests has a growing tendency.

2009

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Conclusions

The ratio of domestic guests decreased in the past years.

Increasing demand can be found from Rumania and from Slovakia while

demand is decreasing from Germany.

Reservations are made from workplaces, usually in the beginning of the

weeks on Mondays and on Tuesdays, through the Hotels website.

Individual guests book their rooms in the last minute.

Accordingly demand forecast became much harder. The accuracy of

forecasts decreased which causes headache for revenue managers.

Do not panic! Dropping prices may not be the best answer to the

economic crises.

The proportion of room nights booked by individuals through the Hotels

website has an increasing tendency.

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Thank you for yourattention!

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Gabor Hevessy_Changing Patterns in Hotel Room Demand