Power of Packages for San Francisco Hotels

Hotels are always looking for new ways to drive demand – and packages have been a solid vehicle to do just that especially in San Francisco. Packages (combined hotel, airfare and/or car bookings) offer valuable benefits to hotels, as well as consumers. Packages are a great way to maximize revenue and minimize cancellations.

Packages Drive Increased Revenue
Overall for 2016 in San Francisco, ADRs for package demand were higher than standalone by $8. This shows a substantial rate boost for hotels, and an incentive to include their hotels in package offerings. One potential reason for package demand delivering a higher ADR? Hotels offering deeper room discounts in package demand may successfully upsell consumers on room type, due to the overall perceived value.

Another potential reason packages have a higher average rate is because of last minute rate declines. Consumers have been bombarded with information pushing last-minute bookings for great deals or discounts. Looking at the Expedia, Inc. travel demand data from Q1 2017, as the booking window in San Francisco shrinks ADR declined 35% from 90 days out to same day in San Francisco. With 60% of package demand coming outside of 30 days, the rates end up being $26 higher than standalone demand made within 3 days of arrival.

Fewer Cancellations
In package demand, since the hotel stay is commonly linked to a non-refundable flight, packages may have half the cancellation rate of a hotel-only demand. According to the Expedia, Inc. travel demand data during Q1 2017, in San Francisco package travelers cancel 75% less than standalone travelers. This is especially important for hoteliers, particularly during a time when consumers are paying for trip protection or potentially booking refundable, standalone hotel stays in a separate booking to get the most competitive rate.

For more information, check out the full white paper here!

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