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Shifts in marketing department expenditures reveals changes in tactics during recession

11/17/2021| 3:47:15 PM| 中文

Despite rising levels of revenue, sales and marketing department expenditures are still on the decline for most of the property types.

According to the 2021 edition of CBRE’s Trends® in the Hotel Industry report, total operating revenue for the average hotel in the sample declined by 62.2 percent from 2019 to 2020. This is by far the greatest decline in revenue recorded during the 84-year history of the Trends® survey. For reference purposes, operating revenues declined by 18.4 percent during the Great Recession in 2009.

Hotel sales and marketing department expenditures can be viewed as an investment to obtain revenue. However, facing such extreme reductions in revenues, the marketing department, like all others, was tasked in 2020 with the mandate to cut costs. A review of the changes in marketing department expenditures from 2019 to 2020 provides some interesting insights into how U.S. hotels adjusted their unit-level marketing tactics in response to the industry recession.

To assess how U.S. hotel sales and marketing executives altered their plans in response to the dramatic fall-off in performance, we have examined the sales and marketing department expenses of a same-store sample of 4,028 properties during the years 2019 and 2020. The study sample consisted solely of hotels that have on-site sales and marketing personnel. In aggregate, the properties averaged 214 rooms in size, with a 2020 occupancy of 34.9%, and an average daily rate (ADR) of $144.48. This is down from an occupancy of 74.9% in 2019, along with and ADR of $184.03.

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TAGS: hotel marketing | America | resorts hotel
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