Pre-COVID, hoteliers relied on decades of occupancy and rate trends as key metrics to forecast occupancy trends and set competitive rates with astonishing accuracy. This gave hotels a distinct advantage (especially when paired with a sophisticated Revenue Management System) to set competitive rates and terms with confidence.
Today we are living through an unprecedented period of time, with unprecedented market conditions – and those once reliably predictive pricing and occupancy trends – are out the window.
In recent years, buyer behavior has also become unpredictable. The days when a buyer could confidently contract for accommodations a year, or even years, in advance, are gone. Buyers can no longer predict usage nor commit to onerous performance agreements (pick-ups). Under these circumstances, there is a general reluctance with buyers to commit to long-term room blocks and minimums in advance, due to the general uncertainty of the travel industry and the dynamism of travel regulations and travelers’ comfort levels.
Welcome to Dynamic Sourcing
Even before the pandemic, some buyers of contracted accommodation were moving away from annual or multi-year contracts for lodging in favor of a dynamic sourcing model; where shorter-term, re-negotiable contracts replace longer commitment contracts. In this model, buyers can search comprehensive databases of worldwide accommodation (like Vindow!) and use the platform’s built-in AI and machine learning data analytics to compare available properties and find the best and most cost-effective property for their RFP. New technologies allow buyers to source and contract much faster and more efficiently, making to easier to move between properties when looking for more favorable rates and terms than those they may be currently locked into.
That’s why dynamic sourcing using sophisticated sourcing platforms, with built-in data analytics and machine learning capabilities, is the way of the future; you’ll find the best accommodation when you need it, at the best possible price, without any of the risk or uncertainty that has plagued the industry throughout the pandemic. Can you think of anything better?!