Analyzing data on package bookings vs. standalone hotel bookings, Expedia Group found that for full year 2017, package bookings delivered higher average daily rates and had longer booking windows, particularly internationally.
Overall, ADR for package bookings compared to standalone bookings was higher at about 30% premium, and the booking window for package bookings was about one month longer. Cancelations for standalone bookings were 2.6 times higher than for package bookings.
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International package bookings averaged about the same percentage higher ADR, but the booking window expanded to almost two months out, and cancelations were four times lower than standalone bookings. International package bookings also resulted in a longer length of stay, the report found.
Expedia says one possible reason package bookings deliver a higher ADR is because hotels that offer steep room discounts in package bookings may succeed in upselling customers on room type, due to the overall perceived value.
Cancelations are also less likely because in package bookings - which in addition to hotels can include flights and car rentals - the hotel reservation is often tied to a nonrefundable flight.
Tips for hotels
The markets in the United States that attracted the most international package bookings in 2017 included Manhattan, NY (52%); Oahu, HI (29%); Las Vegas (24%, and where Expedia has entered a deal with MGM Resorts to grow package bookings); Orlando (21%); and Miami (16%).
For hotels, knowing the top origin markets as well as travelers’ specific booking habits relative to these destinations can inform how they sell package bookings.
For example, driving is common in Miami and Orlando, so hotels in Florida should offer flight, hotel and car packages rather than just flight and hotel.
Hotels should also leverage origin-specific deals to markets that see a lot of package bookings - for instance, in the United Kingdom or Canada - to boost package bookings in those areas.
Although international package bookings typically result in longer lengths of stay - and promotions tend to target travelers looking for seven-plus nights - hotels miss out on guests staying four to five nights.
A tiered discounting approach - which raises the discount for each night booked - can appeal to travelers searching for a variety of durations.