Industry Update
Opinion Article13 November 2020

Setting up 2021 for success

To survive and thrive, hoteliers must reinvent hotel sales, marketing and operations. Here’s how to do that.

By Bob Rauch, President of RAR Hospitality and Sarah Andersen, Business Development Manager at RAR Hospitality

share this article
1 minComments
Bob  RauchBob Rauch
Sarah  AndersenSarah Andersen

We have probably reached the midpoint of the Coronavirus Recession. We say that because we hit bottom quickly in April and came back up a bit this past summer. Many industries were not hit, but the virus-caused recession has taken its toll on this economy.

Advertisements

We say that because we hit bottom quickly in April and came back up a bit this past summer. Many industries were not hit, but the virus-caused recession has taken its toll on this economy. If you believe that Q2 was the bottom and Q3 was slowly trending up, but that Q4 and Q1 of 2021 will continue to have headwinds that prevent economic success, you are with us.

Adam Sacks, president of Tourism Economics, predicts that it will take roughly three years for hotel demand to bounce back to 2019 levels, while CBRE foresees demand for U.S. lodging accommodations returning to pre-crisis levels in the third quarter of 2022. Because much of this decline is not caused by underlying fundamental economic problems, most market segments should start to see meaningful relief in Q1 and Q2 of 2021. However, COVID-19 will continue to define this fragile economic recuperation.

Most experts think a vaccine is likely to become available by mid-2021, but nothing is guaranteed, and vaccine distribution poses another significant hurdle. So, when will this multiyear recovery begin and what segments can we expect to bounce back sooner? To survive and ultimately thrive, we must reinvent marketing, sales, operations and accounting. Here is a game plan that might work for you if you feel like you do not yet have a plan to break even over the next 15 months.

Marketing

Use aggressive, consistent digital marketing, such as wine or beer tastings, food or even chocolate events, geared to specific groups like brand loyalty members or local guests of your currently closed restaurant. Constantly stay in touch and be positive about what you and your team are doing in the community. Maybe you donated a roomnight or did something nice for a local charity. It is critical to stay in front of your guests, potential guests and those who can influence business for you.

Facebook can laser-target guests to your page, Instagram allows you to do more fun things and digital marketing allows you to personalize your approach to guests. Every property has something to offer, even if you must manufacture the asset. As an example, you have no spa, but outdoor massages are legal in your county—hire a massage therapist to do free five-minute massages and have them schedule a massage. Serve herbal teas in a socially distant environment. This is not the end of the world, merely the end of what "used to be."

Sales

Reactivate all dormant accounts and leads. We'd be willing to guess that your hotel has hundreds of dormant accounts and leads that are either in the computer or a sales department file. Call every single lead and offer them a socially distant idea—meeting in your boardroom for a handful of team members, include snacks, beverages, food and let them know you just want to be there for them if they need anything.

To marry sales with marketing, package everything you can think of to stimulate that company or family that needs an all-in type of price. Room, parking, food and anything else you can offer including late check-out. Package at a family-friendly price and sell via Facebook or digital marketing. If you normally do not love a certain customer profile, i.e. soccer teams, think about expanding just beyond your comfort zone. You'll be OK!

Operations and the bottom line

Your team knows what they can handle. Offer those who are go-getters to expand what they do in their off-peak time. As an example, we replaced a controller with a combination of a third-party accounting firm and a desk clerk who had some accounting experience. Voila! Money saved. To increase revenues in our food and beverage department, we created an aggressive "food and cocktail to-go" program. A little bit of packaging, some digital marketing, a poster here and there and the program dramatically increased F&B sales.

The bottom line is that even with a slight improvement in average daily rate and the eventual rise in occupancy through 2021, pricing confidence will waver as global uncertainty around the pandemic persists. We can be certain that recovery is inevitable. Demand drivers will eventually be realized and the need to travel and create new experiences will still be present at the end of this crisis. Until then, resilient owners and operators must continue to hang on and weather the storm. Remember that cash is king, so frequent cash flow updates are paramount to success!

Bob Rauch

More from Bob Rauch

Sarah Andersen

More from Sarah Andersen
Contact
Robert A. Rauch
Phone: +1 858 239 1800
Send email
Latest News
Advertisements