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.
CEO, InTown Suites and Uptown Suites
The hotel industry is cyclical in nature and we witnessed an extended recovery period after the decline that followed the financial crisis in 2008. There has been an increase in room inventory as well and an influx of hotel brands; certain chain scales are now crowded.
Now you have the increased supply, missing demand and possibly transient travel returning sooner than groups (in the short term). I am a strong believer in our economy, in America as a brand and I have no doubt that we will see record occupancy and rates for this industry in the foreseeable future.
As is with every recovery, rate will follow occupancy (not the other way around). Demand drives occupancy, which then supports rate growth. Rate is key as it helps boost profitability. So, as we prepare ourselves on the post-COVID19 recovery; we need to look past RevPAR and focus on profitability. Get the RIGHT rate; that doesn't mean the highest rate, means the most PROFITABLE rate. Embrace all forms of demand; however, prioritize channels that bring you the most profitable rate. Offering free breakfast, complimentary upgrade and credits to certain accounts when those amenities are not on your website needs to stop! Don't push your guests to another channel; give them similar or better offers on brand.com and let them decide where or how they book. Graduate from being a commodity to being an experience.
Experience isn't just about luxury, the experience could mean different things to different segments. At InTown Suites, our targeted renovations are striving to provide guests with fully furnished apartment-style living at an attractive price point. With this simple messaging on being a short term alternative to apartments, a regimented approach to length of stay and channel mix; our properties continue to weather this COVID19 storm. We are proud of our team for delivering these results.
From a revenue management standpoint, 3 things I would prioritize:
- Build a clean and relevant database. Ensure you know your guests, their stay history and have their correct emails and cell phone number. This will come handy when you announce you are ready to open. Even now, reach out to them; connect with them. We are all facing similar situations so let's share our stories. Focus on your niche, focus on your brand and what defines your hotel. Now is the time to reach out to your guests. for us, text campaigns have a better conversion when compared to email campaigns.
- Clean up hotel systems. Is CRS/PMS/RMS configured correctly? Is there a need to reclassify room types? Can we add certain services/amenities to room types that boost conversion? Can we implement some of the post-stay guest survey suggestions that help build our brand story and improve repeat business and create brand stickiness.
- Use data to make decisions. We should (hopefully) start to see some normalcy this summer. From there on, it's all about pace, pricing and promoting your property. Target your channel mix, ensure service standards compliment property rates and graduate to revenue strategy. Sales, distribution, e-commerce, PR and pricing; all need to come together under a cohesive brand marketing strategy. Start planning your goals for each segment and channel. Something to note as a part of this recovery: your guest may decide the price point and experience for their next trip; keep listening...or rather, ask the question when you are ready.
It is important that our recovery is driven by connecting with our guests, based on our brand ethos, our operations, our review scores and most importantly, our well trained and motivated staff. Achieving these will allow us to quickly ramp up occupancy, rates and profitability (I skip RevPAR and suggest RMs focus on profitability).
Our industry is united in this together. Let's focus on the plan and start executing; the time is now! Let's go!