Hotels worldwide faced a difficult decision regarding which hotel marketing tactics to apply when travel levels plummeted in 2009. They could try to drive room-nights by matching competitors' discounted rates, or they could hold rates steady and watch occupancy drop. A new hotel management study from the Cornell Center for Hospitality Research found that many hoteliers admitted engaging in price wars but they wished they had held firm on rates while using other tactics. The study, "Successful Tactics for Surviving an Economic Downturn: Results from an International Study," by Sheryl E. Kimes, is available at no charge at .

Kimes, the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration, surveyed 980 hotel managers worldwide early in 2010 to determine what tactics they used in response to the Great Recession, and how well those tactics worked. The tactics used were, in descending order: discounting, marketing initiatives, obscuring room rates, and cost cutting.

"Discounting was the most commonly applied tactic, although the managers often blamed their competitors for starting a price war. They rated marketing initiatives as the most effective set of tactics," said Kimes. "These hotel operators reported that in the next downturn, they'll focus more on marketing and less on price cuts. They also will be using rate-obscuring programs in 2010. Regardless of the tactics, the respondents urged all hotel operators to have a recession plan in place."

Most hotel marketing plans suggested that the best way to combat the recession was to develop new market segments, which the hoteliers rated as reasonably effective. About four of ten hotels attempted rate-obscuring tactics, most notably value-added packages and offering a free night with purchase. Kimes noted that hotels in the Americas were less likely to offer free nights and more likely to focus on adding value or using opaque distribution channels. One-quarter of respondents had used such cost-cutting tactics as closing facilities (sometimes for renovation) or reducing operating hours.

Asked for their comments on recession-busting tactics, hotel managers warned against broad-scale discounting. Instead, they focused on rate-obscuring packages. Respondents also recommended maintaining marketing programs and service levels.

Thanks to the support of the CHR partners listed below, all publications posted on the center's website are available free of charge, at .

About the Center for Hospitality Research

The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.

Center Members: Accenture • Access Point Financial, Inc. • Barclaycard US • Cvent • Davis & Gilbert LLP • Deloitte & Touche USA LLP • DerbySoft • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Host Hotels & Resorts • Hyatt Hotels Corporation • IDeaS Revenue Solutions • InterContinental Hotels Group • Jumeirah Group • Marriott International • NTT DATA • Preferred Hotels & Resorts • priceline.com • PwC • The Rainmaker Group • RateGain • ReviewPro • Revinate • Sabre Hospitality Solutions • STR • Taj Hotels Resorts and Palaces • Tata Consultancy Services • Wipro EcoEnergy • Wyndham Hotel Group

Glenn Withiam
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