NASHVILLE, Tennessee — The recovery of group and business transient hotel demand requires careful layering on top of strong existing leisure demand, Aimbridge Hospitality's Andrew Rubinacci said.
In a video interview at the 14th Annual Hotel Data Conference, Rubinacci, executive vice president of commercial and revenue strategy at the hotel management company, said that while guest segmentation shifts are a challenge, they're also an opportunity to get the right pricing and mix.
"Getting the right average daily rate is more about mix than it is actually pricing, so if we layer in the right business at the right price points, we actually can raise our ADR with actually not changing the pricing itself," he said.
Aimbridge's multifaceted approach to revenue strategy has helped it to capture demand from all segments, he said. In transitioning to a new divisional structure, the company has dedicated a vice president with expertise to each focus area, from full-service to economy hotels.
As business transient and group demand continue to recover, the corporate rate negotiation process has changed somewhat, Rubinacci said. Corporate rate negotiations used to happen seasonally, but now they're happening all the time.
“We’re having conversations with our best customers and working with our brand partners to try to level set,” he said.
Over the past two years, Aimbridge didn’t make any changes for the most part in pricing rooms, allowing previous rates to roll over, he said. The conversations going on now reflect ongoing inflation and the recovery in demand. The company is balancing that with the knowledge some clients have pulled back a bit from travel.
Though the industry continues to face external headwinds, there are always outside factors that challenge the industry, Rubinacci said. What’s important now is that compared to three years ago, the industry has figured out how to move faster and adapt its operational models to make hotels profitable with rates and occupancy levels not seen before.
“If there is a point or two pull-back in occupancy, with an upward rise of rates we should be fine,” he said. “We should be able to change our operations to match that quite easily.”
For more from Aimbridge's Andrew Rubinacci, watch the video above.