Turn 2020 Profit Losses Into 2021 Wins For The Hotel Industry
By Bob Rauch, President of RAR Hospitality
How To Make 2021 Our Best Year
- Cash Flow For Hospitality Industry
- Marketing, Sales & Revenue Management
- Technology To Improve Hotel Revenue
Whether we operate a hotel, restaurant or tourism-related business, our numbers are likely depressed sharply this past year. So, before we jump into some quick fixes, we must take some slow, deep breaths to slow our breathing down and to appreciate ourselves. Without a positive attitude, a return to normal is difficult and it will show up in our attitudes toward that very important team.
Exercise will not only help our immune systems but it will also reduce stress. It is time to put the virus behind us and prepare for a robust recovery. Once the weather turns, there will be many who have been vaccinated, others who will have gained immunity, and many of them and others will change their behavior. Whether it's leisure travel or the digital nomad trend, travel will return. No, employment and spending will not be at 2019 levels and travel will not be strong until summer but it will pick up nicely by April. It is time to be optimistic and to prepare to win the market share war and turn losses into profits.
Our government has approved and is sending out money in the form of PPP2, round 2 of the CARES Act. It is coming in this month, February, for those who applied but getting that money forgiven requires 60 percent of it to be used for payroll. It is hard to hire our staff back unless we have significant maintenance, cleaning or other work to provide them or are willing to go through some additional training before we get busy and actually need more employees.
An asset management review of our property will indicate plenty of opportunities to spend and training and development is paramount to coming back strong. Most likely we have negotiated better deals with vendors and cut out non-essential activities. There is no need to go back to 2019 spending. Keep our organizations flat and resist hiring middle-management as our employees will shine and be able to grow if trained by top management now.
Marketing, Sales and Revenue Management
If we have not tried digital marketing during this recession, now is the time to start. A great newsletter, coupled with sharp digital/social media strategies can set us up for success quickly. Pay-per-click will come back strong and event marketing will now be largely hybrid events.
Our clients need to have events and we can make it easy for them to host with some basic knowledge. Optimizing our web sites, online channels and Cvent profile are all critical to get started. When it comes to implementation of a hybrid meeting, distancing in floor plans, sanitization stations and video/AV technology ensures that the clients know that we have the ability to pull off the meeting.
Sales calls are not in-person today, but Zoom, Cisco Webex or Go To Meeting make these calls easy. Sure, our sales team will have to know what industries are ready to book like healthcare, construction and government but life sciences and communications technology will also come back soon. The last part of the sales puzzle is knowing what the guests and clients want - safety and security are both critical.
Now that our sales people are cranking up the volume, revenue management comes back. There haven't really been any revenues to manage but there will be soon. And what a perfect time to break down the silos of these three jobs of marketing, sales and revenue management.
Tools & Technology To Improve Hotel Revenue
If we have already flattened the organization, a good general manager can manage all three of these functions as one team, perhaps one person! If you're looking for some new tools to add to your 2021 strategy, here are a few I use and recommend.
- STR - Hotel market data for benchmarking
- Kalibri Labs - Hotel performance benchmarking for revenue management
- Cvent - Event management technology
- TravelClick - Sales & revenue management reports
- AirDNA - Short-term rental data & analytics
Put them in our budgets and have all of them send us some reports to look at. It is amazing what breadth and depth of information is readily available.
We all know that our budgets have been wrong for the last 10 months but now is the time to revise our 2021 for reality. Stay lean, create a game plan, and make our top people do the work in the trenches. When we are ready to put that PPP2 money to work, our teams can train the rookies to become rock stars. Enjoy 2021—I guarantee it will be way more fun than 2020!
*Article was first published on CoStar on February 17th, 2021
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