I was at an event last week hosted by the Greater Montreal Hotel Association where we had the pleasure of hearing Jean Laneville, director and economist at the center of business intelligence for the Tourism Industry Alliance of Quebec, speak about forecasting 2025. As with the rest of the world, no matter your political stance, he expressed concerns that the tariffs are creating a lot of uncertainty in the market. Even the Bank of Canada published two possible scenarios for their outlooks. If even the best economists in our country don’t know how to predict what is to come with the new trade policies in place, how is any forecast based on historical data, created by humans or machines, going to incite confidence?
For years we’ve been seeing the booking window shorten, so maybe we can expect it all to pick up even if we are pacing behind. Or maybe not. We don’t know what to expect for travel demand in the coming months. Will Canadians really cancel trips to the US? Will Americans still travel to Canada? Will travel within Canada increase? Will it be to the markets that have historically driven demand for Canada (Montreal, Toronto and Vancouver)? Will it be like it was in 2020 with everyone trying to escape crowds? I think it’s safe to say that there are a lot of things up in the air right now and it’s easy to get lost in all the things we don’t know.
So let’s take a minute to focus on what we do know.
We know what our costs are, for the most part. Costs may be increasing due to tariffs, so it is worth revisiting our vendors and planning ahead.
We know who our competitors are. Based on who is traveling and when, our compset may look different. But we know who the hotels are in our market and we know who to look at to get a sense of what is going on.
We know our value and our market positioning. We all know which hotel we need to be competitive with on price and which one we can’t match. We know which hotels are not meeting our level of service and are more affordable as a result.
We know that simply lowering price does not create demand to a destination, but we know that a lower price can sometimes shift demand within a destination to one hotel or the other.
We know what we have on the books and what kind of cancellation policies we have in place.
We know what our booking window tends to be for any given period. We know if we are more weather dependent or if we are waiting to see if our hockey team makes the next round of the playoffs.
We know who we are and what is true to our hotel culture. Do we favour occupancy over ADR? Is our brand as a luxury property too important to discount in the name of getting heads in beds?
In the face of uncertainty, it is important to look at the things we do know and can control. And from there we can start to take action. Jean Laneville said in his presentation last week that everything he knows about economic policy is all up in the air in this current climate. Managers are going to manage this situation as they have uncertainty in the past. Strategists will take this opportunity to think outside the box, to look at new ways of approaching the situation, to ditch the supply and demand curve and focus on value added pricing and willingness to pay. No one will blame us if our forecasts were wrong this year, so let’s take advantage of it to try new things and learn from it all.
