Insights Type: Articles

Emily Peck, CRME, Corporate Director of Revenue, Kampgrounds of America, Inc., HSMAI Rising Leader Council  Member 

Bleisure travel reflects the trend where professionals are extending their work trips to get some extra time to explore and relax…blending business and leisure. Combining business trips with leisure activities helps employees maintain a healthier work-life balance, reducing stress and burnout. Employees who can explore new destinations and enjoy leisure activities during business trips often report higher job satisfaction, better mental health, and improved productivity. 

The frequency of this type of trip has grown immensely following the pandemic, and research indicates this market is expected to grow by around 500% or more over the next decade. Based on this anticipated continued growth, it is crucial that rising leaders in the industry – who are very likely partaking in the trend itself – understand its impact on travel patterns, guest expectations, and opportunities to leverage these guests to drive revenue growth. To accommodate the growing bleisure trend, hotels and unique stay providers such as campgrounds should consider the following: 

1. Flexible Booking Options: Offering flexible booking policies that allow guests to easily extend their business trips to add leisure time without burdensome hoops to jump through. 
2. Amenities and Services: Providing and promoting amenities that cater to both business and leisure needs is crucial. This includes high-speed internet, comfortable workspaces, leisure facilities like pools and gyms, and concierge services that can assist with local leisure activities. 
3. Special Packages: Creating special packages that combine business and leisure elements can attract bleisure travelers and generate repeat business. These packages might include discounts on extended stays, complimentary breakfast, or vouchers for local attractions. 
4. Location and Accessibility: Hotels should emphasize their proximity to both business districts and popular leisure destinations. Easy access to transportation and local attractions can make a hotel more appealing to bleisure travelers. 
5. Marketing and Communication: Effective marketing strategies that highlight the  property’s suitability for bleisure travel can attract more guests. This includes showcasing testimonials from previous bleisure travelers and promoting the property’s amenities and services that cater to this demographic. 
6. Partnerships with Local Businesses: Collaborating with local businesses and attractions to offer exclusive deals or experiences can enhance the bleisure experience for guests. 

As remote work and flexible schedules become more prevalent, bleisure continues to appeal to employees and as such present a unique guest segment to leverage. Properties that are strategic in their approach to attracting bleisure guests now will continue to benefit from revenue growth as the segment expands over the next several years. 

 

Further Reading 

• Hotels recover from the pandemic with “bleisure” and fewer workers : NPR 

• What Is Bleisure Travel and Why Is It Important? (hoteltechreport.com) 

• Even as Lines Between Business and Leisure Travel Blur, Hoteliers Say Segmentation Is Key (costar.com) 

• Bleisure Travel: The Rise Of Mixing Business With Pleasure (forbes.com) 

 

Questions for Your Team 

1. As Rising Leaders in the prime bleisure demographic, what are the key factors that impact your likelihood to take a bleisure trip? What specific amenities or services do you think are most attractive for a bleisure traveler? Is there a change that needs to be made in how we revenue manage those offerings?  
2. What role does technology play in capitalizing on bleisure travel trends, and how can we integrate tech solutions to boost guest satisfaction, length of stay and revenue? 
3. How does the role of segmentation shift as the purpose of a trip becomes more blurry? 
4. Looking forward, based on anticipated 500% growth in this type of travel, what future trends do you foresee in evolving in bleisure travel? How can we adapt revenue strategies to stay ahead of these trends? 

Revenue Optimization is poised for significant transformation in 2025, as insights from HSMAI’s Revenue Optimization Advisory Board highlight emerging trends and pressing challenges. Hotel revenue leaders are tasked with embracing advanced strategies and technologies to maintain competitiveness in an increasingly dynamic business environment. Below, we explore the critical trends and challenges shaping revenue optimization over the next few years.

1. AI and Machine Learning

AI and machine learning (ML) are revolutionizing dynamic pricing, demand forecasting, and decision-making. However, practical adoption remains a challenge as leaders strive to balance automation with essential human oversight.

2. Personalization and Guest Expectations

Guests increasingly expect personalized pricing and booking experiences. Revenue strategies must also adapt to emerging traveler demands for hyper-localized and experiential offerings, which require seamless pre-arrival and post-reservation interactions.

3. Total Revenue Optimization

Expanding beyond room revenue, hotels are focusing on ancillary services such as food and beverage, spas, and curated experiences to maximize overall profitability. This holistic approach mirrors strategies employed by other industries like airlines.

4. Evolving Distribution Landscape

The proliferation of online travel agencies (OTAs), affiliate networks, and omnichannel distribution creates challenges in managing channel costs and maintaining rate parity. Optimizing channel profitability while improving direct booking experiences is critical.

5. Economic Pressures and Rising Costs

Inflation and labor cost increases are narrowing profit margins, necessitating a shift from revenue growth to profitability-focused strategies. Simultaneously, fluctuating economic conditions and uneven demand patterns complicate forecasting and budgeting.

6. Workforce and Talent Gaps

Recruiting, retaining, and upskilling skilled professionals in revenue management remain significant challenges. Workforce shortages and evolving expectations around work-life balance further intensify the issue.

7. Technology Integration and Data Fragmentation

Revenue management systems are advancing but often struggle with integrating alternative data sources and consolidating fragmented information. Hotels need to adopt platforms that enable seamless connectivity and actionable insights.

8. Regulatory and Ethical Considerations

New regulations on fee transparency and data privacy laws are reshaping pricing strategies. Additionally, ethical concerns surrounding AI usage and data management demand responsible implementation. 

Underlying all the trends is the fact that revenue optimization is no longer a siloed function but a critical component of a hotel’s overall commercial strategy.  

Dorothy Dowling, Managing Director, Horwath HTL, HSMAI Foundation Strategic Advisor 

Breffni Noone, Associate Professor, The Pennsylvania State University, HSMAI Foundation Board Member, Revenue Optimization Advisory Board Member 

Last month, HSMAI hosted its first Commercial Futures Forum, Understanding the Changing Dynamics of Business Travel, in San Antonio TX. Industry experts shared insights on the evolving business travel landscape and outlined opportunities to capture a greater share of the business travel market. Here are some of the key takeaways:

1. Business Travel Recovery

• 2024 forecast: Expected value of business travel in 2024 is $1.48 trillion in 2024, up over 6% from 2019 (GBTA). U.S. business travel is expected to be $472 billion (+13.4% vs. 2019; WTTC) 

• Regional breakdown: APAC leads with the largest share of global business travel, followed by North America and Europe.  

• Group travel recovery: Group travel has rebounded to 2019 levels in terms of value and RFP volume, with an 8% growth over 2023.  

• Meeting planner expectations: Meeting planners expect to spend more in 2025, with a preference for face-to-face meetings (60% F2F, 20% virtual and 20% hybrid) 

2. Market segment opportunities

• SME market: Small and medium-sized accounts are at 130% of 2019 levels, indicating substantial growth. The competition for capturing SME business is intense, with various players like Expedia, Booking.com, and brand.com platforms vying for this segment. Because SMEs often lack the resources and expertise of larger corporations, partnerships with technology providers and intermediaries are central to reaching and servicing the SME market effectively. Hotel companies need to develop more comprehensive and user-friendly platforms that can handle the diverse requirements of SME travelers, from booking to expense management. Hotels also need to consider developing specific strategies and offerings to cater to the unique needs of SMEs.  

• Workforce travel: This segment includes workforce crews (e.g., construction, transportation and logistics), with a market size of $23 billion (global annual spend). Workforce travel primarily occurs in tertiary markets, where hotels are less likely to be at full capacity, making this segment valuable for driving volume. There is also a growing importance of loyalty programs among workforce travelers. 95% of workforce travelers are members of at least one loyalty program, with 65% being members of two to three programs. This indicates a significant opportunity for hotels to engage with this segment through loyalty initiatives. 

3. Corporate Travel Trends

• Travel managers are pulling double duty: 90% of travel managers are involved in sourcing hotels and venues for their meetings and events program, in addition to sourcing hotels and venues for employee travel. 

• Fresh blood: 65% of organizations sending group RFPs through Cvent are new, with a significant portion of planners being Millennials and Gen Z. These younger planners are optimistic and eager to spend on travel. 

• Pricing model preferences: Hotels are pushing for non-last room availability (NLRA) and dynamic agreements, but corporate travel managers need to see clear value in these arrangements. The RFP cycle is also being rethought, with some companies considering longer-term agreements.  

• Focus on costs: Corporate travel managers are focusing on demand-side savings by nudging employees to make better travel decisions. 

• Booking platforms: There is a shift in how corporate travel bookings are sourced, with some coming through OTAs rather than traditional TMCs. Other types of companies are also offering alternative ways to capture corporate travel demand (e.g., partnerships with financial services). There is also a rise of bookings through platforms like Agoda, which can obscure the true nature of corporate bookings. This trend poses challenges for tracking, managing, and capturing corporate travel effectively. 

• Blended travel: There has been a significant increase in blended travel, with a 4X increase year-to-date in travelers adding personal days to business trips (vs. 2023). Companies are formalizing travel policies to accommodate blended travel, specifying when and how employees can add personal days to business trips. This includes functionalities like split payments and extending stays within the business travel booking experience. Innovations like AI-driven booking tools, direct folio billing, continuous rate monitoring, and small meeting technology are emerging as key differentiators. 

• Sustainability: Companies are increasingly mandating stays at sustainable properties. Properties need to actively engage in sustainability programs, and measure and report their sustainability efforts. 

• Customization: Companies are increasingly looking for customization and unique preferences in their travel programs. The ability to meet these customization needs is critical, especially with the shift in generations. Properties need to think about collaborating with clients to enable them to curate their experience. For example, tools like AI-generated 3D event designers are being used to allow planners to design their own events within set parameters, enhancing collaboration and customization. 

4. Loyalty Programs

• Credit card competition: Credit card companies are innovating in the loyalty space, posing a potential challenge to traditional hotel loyalty programs. 

• Loyalty evolution: Loyalty programs need to evolve to meet the changing expectations of travelers, particularly younger generations. This includes offering more personalized rewards and experiences that go beyond traditional points-based systems.  

• On-property execution: Loyalty programs have to be effectively executed on-property. This involves recognizing and rewarding loyal customers in meaningful ways, whether through simple gestures or more significant experiences. 

• Speed to market: There is an increasing need for speed in leveraging digital opportunities to reward customers quickly and build strong customer profiles. Instant gratification and timely rewards are becoming essential in customer engagement. 

• Nimbleness and personal touch: Independent brands have the advantage of being more nimble and able to offer personalized touches that larger brands might struggle with. This can include unique loyalty programs tailored to individual properties, and/or operationalizing loyalty in ways that highlight their unique attributes and create memorable experiences for guests. 

5. Retailing: 

• Retailing attracts more bookings and revenue: A case study from Sabre demonstrates the power of a modern retailing platform. A midscale chain with 21 properties had 10 of those properties use SynXis Retailing. The remaining 11 did not. The properties using SynXis Retailing saw a 2.7% increase in YTD (i.e., Jan. to Sept. 2024) net bookings, while properties not using SynXis Retailing saw a 6.9% decrease, a 9.6-point difference. The properties using SynXis Retailing also saw a 3.9% increase in YTD net revenue, while properties not using SynXis Retailing saw a 5.6% decrease, a 9.5-point difference.  

• Retailing accelerates TREVPAR growth: A luxury property using Sabre’s retailing platform earned $670K in ancillary revenue YTD (Jan. to Sept. 2024), and a TRevPAR lift of 12% (i.e., % total revenue increase from retailing above “traditional” RevPAR calculated as ancillary revenue divided by non-ancillary revenue). 

• Operational challenges: While the previous examples demonstrate the potential of retailing to drive direct bookings and improve TRevPAR performance, there are challenges in operationalizing new technologies and ensuring that systems (e.g., CRSs) can support innovations like day-use bookings and attribute-based pricing.  New connectivity solutions facilitate connectivity between traditional CRSs to power these solutions and allow hoteliers to sell a full book of experiences to their guests. 

The recovery of business travel, significant growth in blended travel, and the opportunities associated with SMEs, workforce and group travel, present new opportunities for capturing share of the business travel market. The increasing importance of sustainability and customization highlight the need for hoteliers to adapt and innovate. The evolution of loyalty programs and the integration of advanced retailing technologies are crucial for enhancing customer engagement and driving revenue. The development and application of AI-powered tools will be key to success: facilitating the development of booking tools to provide personalized recommendations and streamline the booking process, enabling management of blended travel by supporting functionalities like split payments and extending stays within the business travel booking experience, and enhancing operational efficiency.  

 

Nick Doble, Area Manager Partner Services at Booking.com, Revenue Optimization Advisory Board Member 

We’ve all struggled with budgeting and forecasting. From misaligned industry predictions to unrealistic owner expectations, this resource-intensive process poses many challenges. I brought this topic to the Revenue Optimization Advisory Board to discuss strategies to make the budgeting and forecasting process more efficient, realistic, and aligned with both industry trends and stakeholder expectations. 

Identified Challenges: 

1. Misalignment of Industry Predictions: Industry predictions often do not coincide with the budgeting timeline, leading to discrepancies and unrealistic forecasts. 
2. Resource Intensive: The budgeting process ties up significant resources, diverting attention from revenue-generating activities. 
3. Owner Expectations: Misaligned expectations between hotel management and owners can lead to last-minute changes and inefficiencies that could be avoided. 
4. Inflexible Forecasting: Fixed revenue targets based on current forecasts can lead to unrealistic budget expectations, especially if initial forecasts are overly optimistic.

Potential Solutions: 

1. Frequent Updates: Industry predictions should be updated more frequently to align better with the budgeting process, ensuring more accurate forecasts. 
2. Streamlined Meetings: Breaking the budgeting process into shorter, more frequent meetings can reduce the time spent on revisions and ensure continuous alignment among stakeholders. As well as ensuring all relevant stakeholders are at the table.  
3. Year-over-Year Growth: Focusing on year-over-year growth percentages rather than fixed revenue numbers can provide a more flexible and realistic approach to budgeting. 
4. Early Owner Engagement: Engaging owners early and frequently in the budgeting process can help align expectations and reduce the need for extensive revisions later on. 

Further Reading
Five Tips to Improve Hotel Forecasting
What are the best ways to streamline the budgeting process?
How do you use your influence to drive change? 

Questions for Your Team 

1. What are the key issues? 
2. How can we influence change to streamline/ fix the budgeting and forecasting process?