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Okay, so you independent resorts and hotels have noticed an up tick in business — BUT where are you in comparison to the market and to last year? There is an old saying, A rising tide floats all boats.
If you are posting only a 5-7% increase in revenue over last year, then you are only tracking the industry average. Congratulations — your boat is floating.
What`s wrong with that? Nothing if bobbing around in the water is all that the owner expects. But let`s think about this. A floating boat has no forward momentum and the level of the tides that ebb and glow dictates its level.
So do you want to float or do you want to have the ability to steer this boat regardless of the tide — ride the highest wave? Do you want forward momentum that puts you in control of the property`s revenue and destiny?
There are cost-effective ways of positioning your independent hotel and resort but they must be co-coordinated. The following is the bare bones of a targeted plan:
Rate and Offering Positioning: First of all you must decide on a rate structure in relation to your position in the market with your competitive set. Who is your competitive set? That will vary depending on the type of facility, location and season. For example, I had a client, a resort whose competitive set was other lodging facilities in the area for meetings in the off-season, but whose comp set was regional and national for leisure travel in the busy season. The same client however, believed her rooms were worth the same rate every day of the week, every month of the year. Your room is only worth what your target guest is willing to pay — and that may be a lot less in January in the northern part of the US versus what they are willing to pay in July.
Revenue Management Strategy: What will your revenue management strategy be? Revenue management for a small property may be as simple as a spreadsheet with formulas so that you can manage the inventory in a Best Available Rate block allocation. If you are a mid – to large sized property, invest in the best revenue management system you can afford. You will see a healthy ROI if you put an internal system into place. You will also want to determine who will manage the yield on a daily, weekly, monthly basis? Which leads to the next section a€“
Property Management System: The investment in a good PMS system is worth every penny. However, most property management systems can produce the reports and the data you need to manage the property. The issue is how well does the current staff know the system. Often a system was installed and training was given on the basics and finer points of the system but only the basics have been passed on and no one is left who remembers where to locate the denials/regrets reports, how to harvest mailing labels or email addresses for Customer Relationship Management, etc. Call the provider and ask if there are updates for the system that you can purchase and upgrade to the best functionality you can afford.
Web Site and Search Engine Optimization: Just because your nephew, friend or friend of a friend (fill in the blanks) creates web sites, resist the urge to call them! One hotel I know followed this strategy and eight months later was waiting for corrections to be made because the web site developer had to get a day job! An entire book could be written about this subject but in brief — find someone who specializes in the hospitality industry — there are many good ones. First and foremost, it is about functionality not art. The ability for a potential guest to check availability and make reservations in real time is revenue waiting to flow into your hotel. Make it easy for people to give you money! Key words and links should be decided upon before the copy is written and need I mention accurate web traffic reports?
GDS Presence and Reservations Capability. One of the wisest investments you can make is to hire a company to provide 800 number reservation services and GDS placement that will be picked up by the E-commerce channels. First of all, you probably are expecting the front desk staff to service the guest and sell reservations at the same time. Bad idea! Many of your desk staff may be hired because your local labor pool is limited and they could smile and fog a mirror not because they are good at sales. Even if they were, you would have to spend more time and money training them to do that on a continuing basis to compensate for turnover. Additionally, when the phones are the busiest for peak season reservations so is the hotel.
Group Sales: A well planned group sales effort can support your property in the off-season and maximize revenue in peak season. A thorough examination of revenue drivers with one client led us to promote weddings in the peak season on weekends as the rooms were guaranteed at a high rate AND the average per person banquet price was $86 per head, not including alcohol, which flowed freely at this destination resort as no one drove home. Could we have gotten a higher room rate — yes, slightly, but could we have replaced $10,000 to $15,000 of banquet revenue per weekend? Not likely.
The above is only the tip of the iceberg. I have one client of an independent whose case study I would have liked to include but I couldn`t reach him to ask his permission — he is too busy handling 92% occupancy, up from less than 40% last year. He is riding the wave — not floating on the tide. Enough said!
Carol Verret Consulting and Training is a full service company offering consulting, training and other services to the hospitality industry in the areas of sales, marketing, customer service and human resources. Included in their suite of services are programs on Revenue Management, Leadership and Conflict Management.
Please direct any feedback directly to Carol Verret at carol@carolverret.com
TravelDailyNews Asia-Pacific editorial team has an experience of over 35 years in B2B travel journalism as well as in tourism & hospitality marketing and communications.
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