What Seasonality Means for the Hotel Industry

Editor’s Note: We’re very proud to welcome Grace back to our blog to write about an important topic that affects hotel pricing way more than most of us could imagine — seasonality.

How much does seasonality affect hotel occupancy? According to Trip Advisor, you could save up to 26 percent for booking within a specific time frame. 

Due to weather changes and the holidays throughout the year, seasonality affects hotel occupancy immensely. It is important for business travelers to be aware of these specific times because the price points and availability of hotels change during peak, shoulder and off seasons. You don’t want to get caught in the middle of a peak season rush unprepared with nowhere to stay, and you don’t want to end up overpaying for a hotel!

The main factors of seasonality are economic, employment, ecological and sociocultural. Public school calendars and trade shows also play a part in seasonality because school and conference schedules determine when high-volume traffic might occur. As you probably guessed, holidays and weekends usually have a sizeable occupancy rate across the board. Business travelers have to venture out for work no matter what … which means they often intercept peak seasons.

Here’s what each of the major factors means as well as practical implications for the traveler:

• Economic Factors – When business is booming, hotel rooms are scarce, which drives up room rates. Consider this when building your business travel budget for the year.

• Employment Factors – Economic ups and downs impact leisure travel, and the rates and occupancy are sure to follow. If people don’t have money to travel, they may not be able to finance frequent trips.

• Ecological Factors – In this case, seasonality is just what it sounds like. It makes sense that weather plays a huge part in seasonality in the hotel industry. Plan ahead when you know destination markets are experiencing their most desirable weather, or you will pay the price. Also, watch for extreme storm seasons — these wildcards can have extreme impacts on the markets they hit.

• Sociocultural Factors – Culture, religion and tradition can all affect people’s schedules and ability to travel. Travelers will want to take into consideration the times of year people of different cultures and faiths tend to travel.

• Public School / Trade Show Schedules – When kids and teachers all have the same days off in the public-school system, this affects the popular times of the year these people will be traveling. According to Huffington Post, it is projected that by 2021, 91% of students will go to public schools in the United States, so this is a large number of students who will all be on the same schedule! Similarly, if you find out if it’s trade show season somewhere (e.g., the Consumer Electronics Show in January or Dreamforce in September) and consider staying as far away from these markets as possible! 

So what can you do?

With prices being higher during these times and room availability becoming more limited, you might have to take some action ahead of time. Booking a room within a magic time frame will help reduce the expense and will ensure you have a room. You should start researching hotel prices at least 40 days in advance and check up on them daily until you see a price that satisfies you. The prices per night can fluctuate day to day.

According to TripAdvisor …

• Chicago: Book within 2 months for 18% savings
  Average summer hotel rate: $292/night

• New York City: Book within 2 months for 23% savings
  Average summer hotel rate: $325/night

• Orlando: Book within 6 months for 9% savings
  Average summer hotel rate: $163/night

If an airline raises their prices, hotels will as well; this is something to keep in mind. As a business traveler during peak seasons, you might also have to stay a little further away from where you want to be depending on where you’re going. For example, if you have a business trip headed to New York City during the holiday season (peak), your budget may preclude you from staying one block away from where you will be working. In order to stay within a certain price range, it is important to research and become acutely aware of seasonality.

According to Trip Advisor, these are the standard prices per night of hotels depending on the area and time of year (Data from 2016 check-ins):

U.S.
Most expensive- July ($221)
Least expensive- Jan ($186)

Mexico
Least expensive- Sept ($286)

UK
Most expensive- June ($256)
Least expensive- Jan ($170)

India
Most expensive- Dec ($176)
Least expensive- May ($101)

You can see that depending on the part of the world you are in or going to, prices change immensely during different months of the year. How much does seasonality influence hotel prices? TripAdvisor estimates that it can make a 26 percent difference — for better or worse. Doing your fair share of research, looking into discounts and planning/booking ahead can better position you for finding a room at a reasonable price despite variables. Partnering with a travel management company allows you to leverage their expertise and hotel partnerships to help control costs – making travel possible regardless of seasonality swings.

About the Author: Grace is going into her final year of college as a marketing major at West Chester University, located in Pennsylvania. She is currently managing the social media accounts for her sorority, Alpha Xi Delta, promoting the group’s philanthropic events. She is spending the summer furthering her knowledge about marketing by interning at Creative Lodging Solutions, a business traveling company that has booked over 13 million traveler nights for clients nationwide. She loves spending time with her yellow lab, Indy, and eating Funfetti cake.