Hotel room prices vary throughout the year depending on the type of season. From peak season to off-peak season to shoulder season, successful hotels anticipate the fluctuations that are likely to happen and strategize accordingly. But what is shoulder season, exactly, and how can hotels make sure they don't lose business during these periods? We take a deep dive into that, and much more, in this guide.
What is shoulder season?
Many hotels experience their peak season during the warm summer months and their off-peak season during the cold winter months. Other locations, such as ski resorts, see opposite travel patterns. Shoulder season falls in the months between your peak season and your off-peak season.
If you operate from a coastal hotel, for example, you likely experience the height of your booking demand from June-August, and your lowest demand December-February. The shoulder season for a location with this booking pattern would be from September-November and March-May.
Due to the unique challenges of shoulder season travel, hotels need to implement targeted strategies to drive business during these months.
How can shoulder season affect hotel revenue?
Shoulder season is the median travel season that influences the business and revenue that comes into an entire area. Restaurants, area attractions, and local tourism booms in the area, and then simmers down. Hotels will see a drop in demand, as there is less overall business to be captured in the area during shoulder season.
Still not the slowest time of year, hotels will need to find other sources of travel to help bridge the gap during shoulder season. Hotel managers must also keep in mind that seasonal travel grows in proportion to the general growth of tourism in an area.
College towns, for example, tend to see a huge surge of business around student move-in and move-out dates, visitor weekends, and popular sporting events. After students have moved in, the collegiate market driver will slow down until the next major event. When there is not a high demand for college-related accommodations, hotels may need to look at corporate travel, group business, or other market segments to offset the revenue loss and fill rooms during slower seasons.
What are the pros and cons of shoulder season?
While shoulder season can be challenging, there are certainly benefits for hotels and travelers during median months. Consider some of the common pros and cons of shoulder season before implementing your revenue strategy.
Common shoulder season pros:
- Shoulder season can be appealing to travelers who don’t like crowds.
- Many travelers aim to book during shoulder season to take advantage of reduced prices.
- Shoulder season prices can attract event and group travel planners.
- Shoulder season is a great time for hotels to complete minor renovations or small maintenance projects.
- Shoulder season allows sales teams to experiment with varying booking pattern restrictions, LOS requirements, and rate fluctuations.
- It’s a good time to test new F&B items or package ideas to gauge interest.
Common shoulder season cons:
- There is less overall travel to the area.
- Many demand drivers, such as area attractions, may be closed outside of peak season.
- Decreased revenue in the area means stricter competition between hotels as they fight for a piece of a smaller pie.
- Shoulder season often results in lower ADR and occupancy rates.
- Different rate structures and stay patterns often need to be implemented to maximize revenue during these periods.
- It can be difficult for hotels to identify and implement successful sales strategies without a few years of data and tracking analysis.
Identify the unique pros and cons for your property’s shoulder season. No one should know your unique market demands better than you!
3 steps hotels can take to plan for shoulder season
Schedule time for operations, sales, and guest service managers to get together and plan your property’s shoulder season strategy. Shoulder season requires a lot of preparation, so we recommend breaking your efforts down into these three simple steps.
1. Identify your shoulder seasons.
Review local event calendars, as well as calendars for large area attractions, to get a firm idea of the different factors that influence surges and dips in your area’s travel demand.
Common shoulder season influencers:
- Special events
- Area attractions
- Sporting events
- Outdoor recreation opportunities
- School year travel
- Holiday travel
- Weather patterns (e.g. hurricane season)
Even for seasoned sales managers with years of experience in their region, there’s always something new to learn. Run reports that track occupancy and rate changes throughout the year. When looking at detailed reporting, you may be surprised to learn that your shoulder season start or end dates may fall outside of your initial estimations. Leaving any stone unturned can leave revenue on the table.
2. Set balanced shoulder season revenue goals.
Balance your shoulder season revenue goals with the entire year in mind. If your primary goal is a 5% overall revenue increase, construct a rate strategy that breaks that 5% down into seasons to maximize profit potential. Instead of seeking a 5% increase each month, for example, it is likely a better strategy to set a higher goal of 7-8% during peak seasons to offset a lower increase of 3% during shoulder seasons.
3. Strategize sales and marketing efforts.
Once your shoulder seasons have been accurately identified and attainable revenue goals are set, it’s time to start marketing. Hotel managers will need to develop shoulder season sales strategies based on the drivers and travelers specific to their market. Factoring in area attractions, competition, and potential objections to shoulder season travel, focus on targeting your efforts toward market segments with the most potential for growth.
7 sales strategies to implement during shoulder season
From one hotel to another, shoulder season sales strategies will differ. But no matter what, we recommend implementing targeted sales and marketing campaigns based on travel patterns in your area and the unique features and amenities that your property has to offer travelers.
1. Implement seasonal pricing.
Hotel rates need to reflect both the service and status of the property itself while staying proportionate to the overall travel demand to the area. During shoulder season, your rates should be lower than peak season, but still higher than your off-peak season. When planning your annual budget, keep this in mind and set a separate rate structure for shoulder seasons that will stay competitive and still fit within your overall revenue goals.
2. Run discounts and promotions.
Consider offering early booking discounts or other value-based promotions. Offer a deeper discount with stricter cancellation policies that require booking earlier than other discounts offered by the property.
Target these discounts to fall during shoulder season so that you have a solid base of discount business early on. Building a strong base will give the opportunity to increase rates as the booking dates approach and attain a higher ADR during the mid-demand months.
3. Manage length of stay patterns.
Enable LOS requirements for certain rate levels and discounts during shoulder season. Requiring longer stays for the deepest discounts will help your hotel increase occupancy and maintain a steady ADR after peak season.
4. Create seasonal or holiday packages.
Identify holidays, events, or other seasonal influencers that could help bring in business during your shoulder season. If Christmas falls inside a shoulder season for your property, consider constructing a “Christmas Carol” package or other festive promotion. The package could include a holiday welcome basket on arrival and tickets to see a local concert or play.
By offering a unique experience that your competition isn’t providing, you can help drive more of the limited Christmas season leisure travel to your property.
5. Implement rewards or loyalty programs.
Implementing loyalty programs that offer incentives based on repeat stays will help build your base of return customers while providing your best guests with additional value.
6. Take advantage of unused hotel space.
Hosting a happy hour or Manager’s Reception in unused hotel space will allow your sales team to greet guests, network, and uncover leads for future business.
7. Organize and host events.
Utilize unused lobby or event space to host local events and fundraisers. Consider working with different networking groups in your area to host a monthly meeting or a business lunch. You can even promote these events for free.
Take advantage of shoulder season by making as many connections in your community as you can. Hosting events, fundraisers, or networking meetings will also give you an opportunity to showcase your hotel and amenities to individuals who may not have seen it otherwise.
Pay close attention to hotels in your comp set. Keep an eye on what their shoulder season strategies are and always remember that you’re competing against the competition as well as against your hotel’s previous shoulder season performance.
4 tips to help you analyze shoulder season results and identify best practices
Run revenue reports that break your hotel’s performance down over the last few years, focusing specifically on shoulder season performance. Note patterns, opportunities for improvement, and time periods where there’s a large disparity between rate and occupancy.
1. Track discounts and promotional rates.
Look at previous promotions and discounts run during shoulder season. Which promotions were successful? Did certain discounts cost you rate, occupancy, or both? Look at upcoming shoulder seasons. Are there booking patterns you can see already taking place? Are they going to benefit your bottom line?
2. Track LOS patterns.
Analyze weekday and weekend length of stay patterns over previous shoulder seasons. Were there long LOS patterns that you should put more effort into marketing this year? Would providing additional discounts for extended stays be beneficial to your property, or do you need to focus on building ADR instead?
3. Look for RevPAR and ADR changes.
Were there sudden dips or spikes in ADR or RevPAR during last year’s shoulder seasons? If so, can you identify the cause? Were you unaware of an area special event or group demand driver during those seasons? Were you priced too high causing you to lose occupancy?
4. Compare departmental expenses.
As you develop and institute new targeted shoulder season sales efforts, track your expenses closely. Whether operational expenses increase due to hosting a Manager’s Reception, or the sales budget goes over due to online advertising, be meticulous about tracking your expenses. By doing this, you’ll be able to identify which strategies are bringing in the most money and allocate your budget to best suit your needs.
Now you know all about shoulder season!
Revenue planning and budgeting are two of the most massive and time-consuming tasks that hotel revenue managers will undertake each year. By breaking down the year into seasons of travel, however, the task can become much more manageable. Don’t let annual revenue overwhelm you. Treat peak, off, and shoulder seasons separately in order to develop successful revenue strategies for each.
Up next, want to learn how to increase your business even further? Check out our guide on how to increase hotel direct bookings.