A Post-Crisis Top-3 Revenue Management Action Plan
— 14 experts shared their view
The global hospitality industry has been through every perceivable calamity over the past decades: earthquakes, tsunamis, tornados, major floods, terrorist attracts like 9/11, SARS, global recessions, epidemics and pandemics like SARS, MERSA, ZIKA, swine flu and now COVID-19.
After each crisis the industry came roaring back and I believe it will recover very quickly after the current COVID-19 crisis and prosper like never before.
Naturally, each region and destination has had and will have its own decline and rebound curves as far as hotel occupancy, ADRs and RevPARs are concerned. Recovery post COVID-19 will also be unique to each region, destination and property and will greatly depend on a) the underlying economic conditions in each region and destination, b) the preparedness of each property for the post-crisis period, and c) the lingering impact of short term tactics employed in each market during the crisis.
This down time of low hotel occupancies or property closures is the perfect time for POST-CRISIS planning, revenue optimization action plan development, product and marketing campaign ideations.
The question to the Revenue Management community is, which specific action-items SHOULD be included in a hotelier's Post-Crisis Top Three Revenue Management Action Plan? In addition, please suggest one creative, OUTSIDE-THE BOX idea... something we may not have seen yet in revenue management. Just an idea... big or small.
Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
Here are the three main action steps in revenue management in the post-crisis period:
1. Break down the silos! The post-crisis requires a completely new approach to revenue management (RM), not going back to the old ways of doing RM.
The post-crisis travel planning process will be even more challenging and complex, which will force hoteliers to find an integrated strategy to engage, acquire, service, and retain the tech-savvy travel consumers - both leisure and business - across multiple digital touch points and across all digital channels and devices. This new complex travel customer journey constitutes a singular planning, conversion, and retention lifecycle that requires a singular (read: seamlessly integrated) approach. It does not tolerate silos in departments, technologies, services, and engagements.
This new reality necessitates the creation of “a single-minded team” at the property: The Revenue Generation Team, consisting of the RM, S&M and CRM specialists, working together to acquire, engage, and retain guests; optimize performance; and increase revenue, especially direct bookings.
2. Develop a two-prong Revenue Management strategy:
- Short-term strategy (now through 6 months post crisis), focused on leisure and unmanaged business travelers from drive-in and short-haul feeder markets. Short-haul feeder markets will be the first to “wake up” in the immediate post-crisis period. People are better informed about nearby destinations and can better assess the post-coronavirus situation there, and hopefully, resume traveling there if they believe the situation is under control. Focusing your marketing efforts on your property's drive-in/short-haul feeder markets in the post-crisis period makes all the sense.
- Long-term Strategy (now through 12 months post crisis), focused on your core market segments: corporate travel corporate groups, SMERFS, special occasions, weddings, distribution partners in long-haul feeder markets, etc. You should continue to communicate to these customers throughout the crisis and after it's over and provide clarity and information about the property's status of the property and the situation in the destination, the fact that post-crisis the property is fully functional and better than ever, etc.
3. Invest in revenue management technology. The COVID-19 crisis marks the end of the Excel Spreadsheet as a revenue management tool. Now is the time to convince management and ownership that only a cloud AI-powered revenue management system (RMS) can help the property maximize revenues and successfully compete in the super complex post-crisis marketplace.
Today's RMS technologies have advanced to a level unthinkable 10, 5 even a year ago and have become real-time, automated price-and-strategy recommendation engines, powered by AI and ML, supported by dozens and dozens of APIs with real-time data feeds with ORM (Online Reputation Management) customer sentiments, CRM RFM Values, Digital marketing's intent data, etc. An RMS in place, coupled with an experienced revenue manager, can lift room revenues by 20%-40%.
With less than 10% of independent properties having an RMS in place today, your hotel will gain a major competitive advantage and will be able to overcome losses from the current occupancy slump or closure.