World Panel
Viewpoint 8 April 2020

A Post-Crisis Top-3 Revenue Management Action Plan

Revenue Optimization

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A Post-Crisis Top-3 Revenue Management Action Plan
This viewpoint was created by
Scott Dahl, Program Director, Master’s Degree in Hospitality Strategy and Digital Transformation at Les Roches Global Hospitality Education
Damiano Zennarosupplier view
Director, Global Advisory Services at IDeaS Revenue Solutions

It's true that the hotel industry has been through many storms. However, it has never seen a black swan event like this one. As the leading brands expect revenues to decline by an unprecedented 70% or more, millions of people are out of work and we are still 3-6 weeks away from the peak of the crisis. Depending on the country or region, it's difficult to discuss actions to take for a recovery which might not start to happen in earnest until Q4 2020 or beyond. I do see some common plans you can pursue independently though, based upon where your hotel is located or when the recovery will take place:

  • Because domestic and local travel could be the first area to recover, consider how you'd engage with these travelers. Are you ready to welcome them? Are you regularly communicating with potential local guests? What are you doing to address safety concerns from guests staying in your hotels?
  • Be creative in offering added value packages. People will look for short distance leisure destinations that provide good value for the money. While customers will be price sensitive, they (we) will all look forward to spending some time and money out of the house after weeks of quarantine.
  • While it's very tempting, stay away from aggressive requests of inventory availability and pricing cuts. Rethink your distribution strategy and avoid heavy dependency on third party channels. At the first sign of recovery, they will certainly come running to offer many incentives (not always to the benefit of the hotels) to “stimulate demand” and “help you drive occupancy.” However, the time is now to lay the foundation to drive direct business. Make sure all your marketing assets are ready to launch when restrictions are lifted, you have a sound social media engagement strategy and are focusing on direct business first. Make sure you stay engaged with prospective guests/markets throughout any hotel closures.

Creative idea: Pursue and aggressively court government, health authorities and emergency-related business to see you through the next few months. We have seen some very successful initiatives with hotels getting significant room nights for a variety of purposes, including isolating returning citizens, providing accommodation to stranded tourists and/or quarantine measures. 

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