Discover how key data-driven marketing strategies and promotional adjustments made on Playa Nicuesa Rainforest Lodge´s low season promotions maximized 2023 YOY Green Season Revenue by 183.6%. This blog post outlines the challenges faced by the lodge´s legacy promotional structure and provides suggestions on how your business can strategically optimize its promotional design using Data Science and Generative AI tools (such as Visplore and ChatGPT). Learn how to leverage historical data analysis, adjust promotional offers, target specific room options, and emphasize key competitive elements to attract more guests and increase occupancy rates. Includes suggested multi-channel advertising strategies and corresponding methods to measure cross-channel effectiveness.
Legacy promotional structures can pose several challenges when it comes to maximizing revenue for any type of hotel, ANYWHERE in the world. These structures can often be outdated and thus, not effectively aligned with evolving target audiences or showcase the unique hotel offerings of the day. In the case of Playa Nicuesa Rainforest Lodge (PNRL, an exceptional rainforest jungle lodge located in the South Pacific coast of Costa Rica), their legacy promotional structure was hindering their ability to attract guests during the 2023 low season (which runs yearly from May to December 15th). They provided me with the opportunity to optimize their strategic promotional program to maximize revenue for the remaining part of the Green Season. The resulting optimized program which was released in July 1st 2023, had the following KPI results during the first two months of deployment compared to the same period in 2022 (a screenshot of the corresponding Tableau Public dashboard which was setup to track results is shown below):
The first thing assessed was the quality and quantity of data the lodge had at hand. This process helps define immediate data cleansing and standardization procedures to make sure that all conclusions generated out of the optimization process will be precise. As in all matters where data processing is involved: bad data in, bad resulting data out.
Documenting your Data Architecture in a graphical format (I show PNRLs instance as an example below) facilitates the understanding and necessary agreements that need to be defined between all incumbent parties over what data your organization has, where is it stored, who owns it and who is responsible to upkeep it. Data Governance Policies need to be set in place for an organization to continuedly improve the quality of its own data-centric business activities, and a graphical Data Architecture facilitates this process.
EXTEND YOUR ULTIMATE RAINFOREST ADVENTURE FOR THE GREEN SEASON!
Reserve for 2 Nights, receive 3rd Night at 50% Discount OR
Reserve 3 or more Nights, receive 1 Additional Night Free
Includes: Nicuesa’s deluxe accommodation, three fabulous authentic locally grown meals, unlimited self-guided hikes to preserve and use sports equipment.
Book your stay using our website's booking engine (where specials are automatically applied) or call us to assist you in visiting Nicuesa Lodge soon! [US Toll-Free: 1-866-504-8116 / All other countries: + (506) 8899-6685 / + (506) 2258-8250]
* Applicable on both Regular Rates and Special Packages.
** Applicable on new reservations to visit Playa Nicuesa Rainforest Lodge between May 1st and September 30th, 2023.
With this promotion in place, during the first 2 months of the 2023 Green Season (May-June), the Lodge had been able to achieve an average occupancy rate equal to that achieved up until the end of June 2022 [35.93%]. The World Travel Organization’s May, 2023 Travel Barometer report was taken in consideration to reason over such lackluster result. It advised that international tourist arrivals had reached 80% of pre-pandemic levels in the first quarter of 2023. The Middle East (+115%) and Europe (+90%) had shown the strongest performance supported by robust intra-regional demand, whereas the Americas achieved +85% of 2019 levels. Notwithstanding the expectation for better performance during the May-August 2023 period, a full recovery to 2019 levels was foreseen by the WTO to happen until 2024 or later.
For PNRL this was far from motivating, and the concern was primarily focused on the remaining part of the Green Season (July through Sept), where the occupancy rate outlook was 17.7% (Q3 2022 had achieved 32.2% occupancy by that same time, see the KPI breakdown below). For PNRL to achieve 40% occupancy by the end of the Green Season (90 days ahead), it would need to book around 36 additional room nights -which was then set as a goal.
To support the achievement of said initial booking volume goal, PNRL had already taken action and updated its Green Season promotional canon by including a Limited Time Offer (LTO) component into its Green Season strategy. by means of an LTO Widget integrated into their website. The LTO Widget would allow PNRL to leverage the sense of scarcity and urgency inherent in LTO strategies, deploying short-term promotions with a validity of 15 to 30 days for potential guests to enjoy on their booking. Two types of offers were initially defined to be used on the LTO Widget:
Nicuesa Lodge needed to optimize their promotional design to overcome these challenges and effectively attract more guests for the low season.
To optimize the promotional design for PNRLs Green Season, Data Science and Generative AI tools such as Visplore and ChatGPT, were used. These tools allowed to accurately apply statistical analysis to historical sales data and generate personalized offers & promotional assets that would effectively resonate with the target audiences defined.
By leveraging a statistical multivariate correlation analysis, patterns and trends were identified in booking configurations & customer preferences out of PNRLs historical roster of booking data which spanned all the way back to 2006. This enabled the reconceptualization of the promotions in a way that they would be effectively aligned with the guest persona profiles that had a higher propensity to make a booking to visit PNRL during the Green Season.
Visplore, a powerful data analysis tool, was used in this process, facilitating data-driven decisions for us in minutes (the quick data setup process of this tool makes it a MUST HAVE for any business). For example, by analyzing the statistical correlation between all the available attributes on PNRL´s historical direct Booking Engine database, we identified and learnt that:
Considering an average historical Booking Window for all bookings of 85 days:
- There was a statistically significant direct correlation between the Booking Window and the Travel Season:
o GREEN SEASON: 75 days
o HIGH SEASON: 88 days
o HOLIDAY SEASON: 140 days- This of course, translated to a direct correlation between the Travel Season and Average Revenue per Booking ($2,545 overall):
o GREEN SEASON: $2,139
o HIGH SEASON: $2,768
o HOLIDAY SEASON: $4,260
On the other hand, a deeper analysis of bookings historically received by PNRL within the booking window of Up To 90 Days (our marketing action time window left to achieve our goal) during the Green Season, revealed that:
- With booking windows beyond the 30-day threshold, the larger the window, the more nights booked and thus, more revenue was generated:
- Regarding the Number of Adults in the booking group, the Green Season resulted comprised of Couples and to a lesser degree Single Adults.
- Therefore, solely relying on promotions that were aimed to increase the Number of Nights per Booking would only favor occupancy for the Types of Rooms already preferred by Single and Couple bookings, but not really affect the occupation rates for the Jaguar House and the Two Bedroom Cabin which were favored by Families and Groups:
- Additionally, clarity was generated over the precise structure of Family bookings within the 90-day booking range (comprised of 2 Adults and 1 Child), and of Groups of Adults bookings (which were mostly comprised of 4 Adults - most likely 2 Couples or a Couple with 2 Young-Adult Children):
By garnering the necessary historical booking insights during the Data Analysis phase of the project (see previous section) we were able then to apply adjustments over PNRL's promotional strategy. Solid historical sales data-backed insights enabled the definition of promotional adjustments which would effectively resonate with the different target audiences defined and highlight PNRL's competitive advantages; all effectively aligned with the booking and occupation rate goals defined.
The promotional adjustments made were the following:
GOAL I: INCREASE NUMBER OF NIGHTS PER BOOKING ACROSS THE BOARD via three approaches:
i. COSMETIC APPROACH:
Alter the wording of the current offer (Book 3+ Nights, 1 Additional Night Free) so that it would suggest the booking range first and then make the discount offer: Stay 4 Nights, Pay 3 … 1 Night Free on when Booking 4 or more. All details count to make your marketing efforts play along effectively with what a client trully has in their mind when planning a vacation (or purchase).
ii. PRICING OPTION APPROACH:
A detailed benchmark analysis was performed using ChatGPT allowing PNRL to assess the competitiveness of the current offer (shown in table below, download Excel workbook). Of most relevance to this case, we found that only one hotel at the time was explicitly offering a Non-Refundable Rate option as a way transfer the risk burden of potentially cancelling their booking (a 10% Discount was offered in exchange). Much to our own surprise, PNRL was ALSO offering this option, but it was buried as a canon in the regular Booking Policy and not being capitalized as a potential benefit we could transfer to the client. We therefore defined to offer the Non-Refundable Rate Option as a general perk for those clients sensitive to discount offers and willing to assume the risk.
iii. AGGRESIVE APPROACH:
Create a promotion that would take into consideration the actual historical booking nightly ranges the hotels' operation had had, to make the most profit during the target booking period. In this case we took the highest range of Nights historically proven to be booked for the 30 to 90 booking window: 7 Nights and processed a promotional feasibility assessment (shown below, download Excel workbook) to come down to the break-even point of offering 2 nights free. This way PNRL confirmed that based on a probable market behavior scenario, it would effectively obtain a profit margin on the promotional configuration.
GOAL II: INCREASE THE NUMBER OF GROUP AND FAMILY BOOKINGS, explicitly tied to the Jaguar House and Two Bedroom Cabin options which had critically low projected occupancy rates. These set of promotions were tied to the restricted window of having to visit the lodge before September 31st and having to book their stay in either the Jaguar House and Two Bedroom Cabin options. The specific set of promotions below were marketed under the title of HUMPBACK WHALE SPECIALS, making reference to the booking group size and capitilizing over the humpback whale mating season which happens right in front of the lodges private sea cove on a yearly basis from July till September.
i. PROMOTIONAL SCENARIO DEFINED FOR GROUPS:
PNRL's promotional canon to date catering to Group Bookings offered:1 Leader Free on Groups of 8 to 15, and 2 Leaders Free on Groups of 16 to 28 which upon detailed analysis of the historical record of Group Bookings at the lodge proved the specs to be out of effective range (see table below, download Excel workbook). During the Green Season, Adult Groups visiting the lodge did not book in configurations beyond 4 Adults. We therefore defined to take the highest range of Adults proven to have booked during the 30 to 90 booking window: 4 Adults and offered a Free Stay to one of them. A promotional feasibility assessment (shown in the second table below) was made to come down to the break-even point and this way PNRL confirmed that based on a probable Group Booking behavior scenario, it would effectively obtain a profit margin on the defined promotional configuration.
ii. PROMOTIONAL SCENARIOS DEFINED FOR FAMILIES:
The detailed analysis of the historical record of Family Bookings (see table below) elucidated two distinct booking configurations under this segment which called for distinct promotional approaches to able to effectively resonate with each one:
1. Two Adults and at least 1 Child
2. Three Adults and at least 1 Child
The corresponding promotional feasibility assessment was made then in each case (see table below, download Excel workbook) to come down to a break-even point that would ensure the creation of corresponding promotions for each subsegment with proper profit margins:
- SCENARIO A: Offer a Free Child Stay on groups of 2 Adults and at least 1 Child.
- SCENARIO B: Target the 3 Adult, N Children market with a variation on a novel promotion found referenced in our market assessment process done with NextAtlas: British hospitality company IHG Hotels had offered a free stay to older relatives in family bookings, promoting familial bonding and reconnection across generations. In PNRL’s case we modulated it in the following way:
Bring an Extra Family Member Along Free!
On bookings of 2 adults and 1 Child or more, 1 additional Adult stays FREE during the extent of the groups booking. Applicable on bookings in the Jungle House or 2-BR Cabin.
ChatGPT was additionally used to assess and creatively redefine how PNRL was addressing and communicating two crucial elements within their offerings, knowing offhand that optimizing these two elements would have a positive impact on achieving the marketing goals at hand and beyond.
These two exercises come to show a couple of simple use cases by which any hospitality business (or ANY business for that matter) is able to immediately use Generative AI as a way to update and express more value to its potential guests both on their online channels, as well as offline and across their different advertising venues of choice.
At the end, the optimized landing page content for PNRL's Green Season is shown below considering its two defined Limited Time Offer phases:
In the dynamic world of hospitality marketing, controlling the effectiveness of marketing expenses is a crucial challenge. Playa Nicuesa Rainforest Lodge (PNRL) faced a frequent situation for any hotel where a significant portion of business generated by online marketing efforts actually concluded through offline channels. The assessment of booking data from June 2021 to May 2023 revealed that around 55% of PNRL's booking revenue came through direct online sources (booking engine & OTAs), while the remaining 45% was driven by direct calls and other offline interactions such a booking enquiries received thru the Contact Us form on the website. This intricate balance highlighted the need for a robust multi-channel advertising strategy, which would support the achievement of the booking goals and at the same time take into consideration the data flow processes we had at hand (as documented in the Data Architecture defined in the initial stage of the project). The multi-channel approach taken was focused on making the most of customer and operative data at hand (to be able to optimize and customize the advertising campaigns created in each channel being used), as well as emphasized the need to track ROI across the full conversion funnel considering both online and offline touchpoints involved; as detailed below.
In conclusion, the promotional optimization journey taken with PNRL as described in this article has been a testament to the power of data-driven marketing strategies... the proof is in the quick results obtained! Moreover, the success achieved goes beyond numbers; it's about the methodological execution of a thorough process which should allow you to better understand your current customer base and be able to effectively allign your value offerings to what customers are really looking for.
If you are looking to replicate this success in your business, feel free to reach out. Let's explore together how your marketing strategies can be transformed to drive remarkable results for your business.