The industrywide discussion around hotel technology and innovation has taken on new dimensions as a result of the COVID-19 pandemic.

The need to maximize revenues and do more with less operationally — side by side with the critical importance of finding ways to parse and understand vast collections of customer data — has encouraged revenue leaders to take a broader view of the traditional travel booking funnel and connect parts of the funnel that were previously unconnected. Our experience at Red Roof throughout the pandemic suggests that the convergence may be happening more quickly than anyone expected.

Forced to operate within the unfortunate constraints of the pandemic, hoteliers have been given the opportunity to understand the micro data around guest stays, preferences, booking patterns and more. We have moved aggressively in that direction at our company, and as a result a great deal about the guest journey has been demystified throughout the past year. This data is helping us provide recommendations to our franchisees on how they can improve the end-to-end guest experience while optimizing revenue, increasing operational efficiency and growing profits.

Here is some of what we have learned.

As COVID-19 emerged and the mainstream corporate and leisure traveler sheltered in place, traditional travel norms were uprooted or turned upside down. In an interesting twist, average guest stays lengthened — as many guests were in need of safe shelter during the early days of the pandemic, hotels became a refuge for displaced persons and other “pandemic nomads.”

For example, even excluding extended-stay hotels, the average length of stay within Red Roof’s portfolio has increased significantly since the beginning of the pandemic and has held strong throughout.

By analyzing the bookings of Red Roof’s RediRewards loyalty members, we determined that local trips were the main drivers of revenue for traditional extended-stay guests, and other customers as well. Deploying this knowledge enabled us to empower franchisees to anticipate the needs of local travelers in advance of their arrival, adjusting rates and offerings to meet their needs efficiently in a challenging time. Our expectation is that increases in guest satisfaction scores will follow.

While anticipating customer needs is always critical, the growing premium on customer data is helping push the industry toward the holy grail of personalization, something hotel decision-makers have come to see as a Rosetta Stone for future revenue acceleration. In an ideal world, every guest’s journey would be tailored specifically to them based on historical data. While there is still some distance to go before we arrive at this point, it is possible to apply the principles of customer relationship management with existing technology to bring it closer to reality. Through data-driven marketing strategies it is now possible for a hotel’s message to reach future travelers by knowing their preferences and leading the conversation over social media, email campaigns and more.

To make this happen, a strong business intelligence and analytics infrastructure must be in place, supported by a substantial data layer. As technical knowledge improves, so does our ability to bring this data to life by quickly drilling down into the components of a property's performance, and identifying the critical drivers behind guest preference and satisfaction.

For example, during the early stages of COVID-19, Red Roof was able to tap into its guest data analytics to understand who was traveling, who was abstaining from travel, and to identify specific challenges or booking peculiarities that might have appeared as a result of the pace of change and extraordinary circumstances surrounding guest movements.

With so much going on, and flights grounded to prevent the spread of the virus, we became aware of a number of international students left stranded stateside near Ohio State University, just miles from Red Roof’s headquarters in Ohio. Thanks to customer data, it was possible to identify these stranded guests and work with them to secure temporary housing on-property at an agreeable price until a longer-term solution was identified. Without a global database of guests, such a complicated situation in such a tumultuous period could have potentially been much more difficult to resolve.

Having the data and the ability to parse it to the level of individual stays, a number of guests were spared the confusion and difficulty of finding housing during this strenuous period. The same tools are also useful for identifying where customers are coming from, whether or not they have a history at the property, and how to modify pricing strategies to better capitalize on incoming bookings. We expect to build out these tools and approaches robustly in the future.

Again, the key is collecting the relevant data, understanding it in the context of your business mix, and deploying it into actionable recommendations.

The pandemic shifted our focus at Red Roof in other ways, as well.

In order to counteract unprecedented revenue fluctuations and disruptions in normal travel patterns — and to leverage the longer average length of stays — we started building weekly rates for properties that did not have them before. Local businesses became more important targets for our marketing, in addition to a group of online resources we had not previously fully tapped.

Automation has also become a major priority, especially in revenue management. The ability to make more informed pricing decisions in a fraction of the time is indispensable at a time when personnel and hiring restrictions remain tight, especially for brands in the economy market.

Then there is the impact of reduced business travel. While many economy and midmarket brands may not see the immediate pain, as they lack a significant group business base to begin with, upscale brands are lowering rates to attract what business travel is in circulation. This may inevitably result in pushing prices lower across the board and, once again, shifting rate structures.

These are all unprecedented challenges felt by every operator across the hotel value chain — from hotel owners and franchisees, to managers, brands and the partners who serve our space. What once seemed like a reasonably stable rate forecasting and pricing environment is now much more uncertain and volatile.

On the other hand, the advancements made during this period have given us the ability to react quickly and with flexibility, which is a potential upside for the near future.

Thanks in large part to a focus on seizing data-driven insights related to our customer base in the economy segment, Red Roof has been able to steadily recover occupancy and revenue since July 2020. During one week in mid-March, Red Roof hotels were close to 80% occupancy systemwide and even outperformed sales figures from 2019.

The recovery is likely to be uneven, with fits and starts. But it’s difficult to argue that it has not already begun. The good news is that every crisis brings opportunity. In this case it’s the chance to make connections about guest behavior behind the scenes in ways that weren't possible before, thanks to a plentiful amount of consumer data and new ways to understand it.

These connections and the technology supporting it are now necessities. Brand success in the new era depends on it, and so will the success of franchisees and guests looking for a best-in-class hotel stay experience.

Alex Javier Cisneros is Senior Vice President of Revenue Generation and Analytics at Red Roof.

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