Aró Client Trends

Showing clearly that customer confidence is a massive indicator to a speedy return

1. The Irish Market

   
   By the 19th of May the Irish market has seen a growth from an average of 9.3% of last year’s activity to an average of just over 55%, giving an overall average for this 19-day period of 40%. Visitors are 36% of last year’s number for the same 19-day period, with no client seeing less than 10% of visitor activity over last year.
   
   Some hotels have experienced more than 60% return and believe it or not, 2 of our Irish hotel partners, that have an excellent self-catering offering, have achieved over 100% growth. (i.e. their online sales and visitors from 1st to 19th May in 2020, is higher than the same period last year).
   
   As Hotels are preparing to open on the 20th of July, it comes as no surprise that most of the bookings are for the periods between August and October, with a particularl surge in bookings after the 11th of August, which coincides with the opening of Spa’s, Pubs and Pools. They are mostly for 2 people, sharing, but the business mix is far more varied for clients that offer self-catering accommodation.

   What type of hotels are winning and why?

   The hotels that are winning have very similar traits, they are typically a resort or destination type of property, always offer a quality product, have a very loyal client base, have a great client communication strategy. They have put their ‘Cleanliness and Safety’ strategy to the forefront of their client communications. Their rate is not discounted but they are very upfront about their ‘Best Rate Guarantee’ from their own website and typically are offering a lower rate if their customer books direct. They also present a very good selection of packages together and while referring to the need for ‘Social Distancing’, do not over labour the point.
   
   As can be expected, City Centre hotel bookings are lower, in some cases still less than 10% of where they were last year and hotels that focus on Weddings and Events are also still performing poorly.
   
   The home market is where the majority of the bookings are coming from but there is still some confidence in bookings from The US and The UK. The consumer from the States in particular is still very keen to travel, though they are not as much aware of the risks or the possibility that they might have to ‘self-isolate’ on landing in Ireland. So, it is expected that there is considerable risk of subsequent cancellation of any bookings from this market in the short term.
   
   In discussion with a selection of clients that are getting bookings, it is apparent that they are putting a lot of weight on Irish people’s confidence that the roadmap to recovery, put in place by the government, will work. They are relying on the fact that people will be able to safely visit and stay in their favourite hotel or destination in Ireland after the 20th of July.
   
   It is also interesting to note that on average, the clients that invested in the Aró Covid-19 Recovery Plan (45% of our Irish clients) are achieving an average of 45% of visitors over last year and 51% of room revenue, versus 36% visitor activity and 40% room revenue for the average of all Irish clients.

2. The UK Market

   
   Unfortunately the UK market has not improved during this period, regardless of hotel type (i.e. City Centre, Resort, etc.).
   
   Visitors to their sites are down to an average of 26% of last year’s number and many hotels are showing a dramatic reduction in online reservations. Online reservations are running at just 4% of last year’s levels for this 19-day period and only one client is achieving a booking rate higher than 15% of last year’s levels.
   
   There seems to be a lot more uncertainty in the UK market and their population does not have the same level of confidence in their Government’s plans. This reflects the fact that there are still very different results in most key areas of the country and some local authorities are not yet in a position where they can implement the Governments Roadmap. Some regions still have high infection rates locally so they cannot open up schools as per the schedule set by the UK government.
   
   However, as in Ireland, those clients in The UK that maintained their investment in their online digital strategy are achieving higher visitor and room revenue results than those that did not.

3. International Clients

   
   The International Clients we analysed are operating in 10 different countries and each of these countries are at different stages of their recovery. Some of these clients have also taken very different approaches to the crisis, (1 hotel client is closing for the year). This makes it more difficult to establish trends or generalise in terms of activity and recovery as we would with a data set in markets like Ireland and the UK. Never-the-less, there are some interesting findings here also.
   
   In general, and as expected, there has been little growth during the 19-day period over April of this year and visitor activity for the period is at 45% of last years activity. This compares very favourably with the UK markets 26%. Revenue however is only running at 12% of last years level indicating a lot of “wishful” online activity. There are always exceptions however and one of our clients has enjoyed Revenue of 150% of last year and 85% visitor numbers, well done to them indeed, a super achievement.
   
   Most of our International clients have invested in continuing their investment in their digital strategy so no real change there.

Conclusions

1. For people to start booking breaks, they need to have a lot of confidence in the Governments ‘Roadmap to Reopening’.
2. Consumers are booking Resort (or more remote) style accommodation over City centre. This is understandable in Phase 1 of the Roadmap and we do expect more people to start booking City accommodation as the Roadmap moves through the phases.
3. Hotels that have a self-catering option are booking well online, in some cases, they are tracking ahead of last year.
4. Brand loyalty is another key factor as customers have confidence in putting their safety in the hands of brands they trust. This also really highlights the importance of online reputation.
5. For the moment, our clients room rate is holding firm and the best business is done with hotels that are only offering discounts from their own website.
6. Hotels with plenty of packages on offer are also doing the best business.
7. Hotels that have continued to invest in their online digital strategy are achieving the best visitor and booking results.
8. In this early stage of recovery, there seems to be an appetite for the consumer to take their leisure breaks and we would have confidence that the leisure market will return quickly as confidence continues to build.
9. This is a fragile recovery and to continue to build momentum it is very important to ensure that everyone plays their part in ensuring that we remain in control of the Virus and do not witness a second wave.