It's challenging to manage any business in the unknown and, without a doubt, the last six to twelve months have been a very anxious and troubling period for the travel, tourism, and hospitality industry.
When countries around the world start to progressively loosen lockdown and travel restrictions, the hospitality sector will start to cautiously reopen and generate much needed revenue to sustain itself.
But how do we get our guests back? How do we make sure we capitalise on the new upswing in demand?
Hotels will need to rethink their revenue, channels, distribution, marketing, and staffing strategies to find a new balance in the ‘next normal’.We have come up with five tactics to consider as you plan your comeback:
1. Perfect your pricing
The key to perfect pricing lies in a holistic revenue management approach to maximise and optimise the profits of a hospitality business.
Total revenue management is a data-driven process that identifies the distribution needs of a business. The close study of the internal and external environments allows hotels to develop internal processes to maximise the overall profitability of the property.
Once all the processes have been established and tracking implemented, each sales and marketing campaign will become more quantifiable as it will be focused on the exact needs of the property. This results in a statistical and data-led approach to investments in sales and marketing activities that will deliver better focus and conversion, much-improved revenue, and healthier profitability.
Big data lays the foundation for the success of all pricing activities and can assist in developing an effective sales and marketing strategy that maximises all investments.
Five considerations when perfecting your pricing:
- Channel Content Evaluation – Hotel content, facilities, amenities, and description evaluation should be up to date across all major platforms.
- Room Type and Rate Code Evaluation – It is critical to do a thorough room type and rate code evaluation across all major channels. This will ensure that you have all available products distributing correctly across all online platforms with rates attached.
- Promotion Parity Check – A promotion parity check conducted across all major channels will benefit your property. Standardisation of online and channel promotions is essential to ensure rate parity exists and your ranking is improving on platforms.
- Online Channel Availability Test – A full-year rate shop per channel will need to be conducted to identify any potential distribution issues. This test will identify any restrictions that may be in place, and identify room-type availability issues for the next 365 days.
- Daily/Weekly Rate Shop - Rate shop your competitor set regularly to determine the best-selling prices to apply to generate revenues and set your rates accordingly.
- OTA Extranet Management – Find time to audit and learn the OTA Extranets. This includes content updates as well as the activation and management of promotions.
2. Deliberate distribution channel choices
*Global Distribution Systems (GDS)
There is a common misconception that connecting independent and smaller properties to the world’s most prominent GDS is a costly exercise. The technology stack you choose to utilise will determine the costs and it can be surprisingly affordable when associating with the right channel partners.
If your business mix contains corporate and government business, being bookable on the GDS is a must. Corporate and government travellers and their associated travel management companies are actively utilising the various GDS platforms to source and secure accommodation. Making your property available to travel bookers and travellers across the globe through connectivity to Amadeus, Galileo, Sabre, and Worldspan and their 500 000+ travel agents is possible and affordable.
If you are already bookable on a GDS, here are some things to consider:
- Make sure your location details and address are always 100% accurate.
- Make sure your GDS profile is content rich and codes are reviewed annually.
- Provide thorough property, room, and rate type descriptions.
- List your property-specific GDS codes on your website and marketing collateral.
- Ensure rate parity that creates confidence.
*OTAs
Optimise your visibility and ranking on all your chosen channels via their extranets. This will give you the best exposure and drive conversion. Responding to guest reviews and ensuring your Review Score and Reply Score are higher than the area average, making sure your rates are dynamic and aiming to achieve 100% on your price quality score (PQS) and property page scores (PPS) for each platform, will improve your ranking.
3. Optimising staffing
Hospitality is a labour-intensive sector. It is, therefore, no surprise that COVID-19 restrictions have had a massive impact on staffing and employment for the sector. To remain operational but profitable during such varying occupancy levels, most hotels have had to reduce staff and this has increased the need to cross-train and utilise remaining staff with multiple departmental responsibilities.
But cross-utilisation is not all that straightforward. While a more versatile employee is a more valuable employee, there are many areas of hotel operations with very specialised skills, and hotels need to be aware of the risks associated with cross-utilisation to avoid sacrificing service quality.
Flexible scheduling and an optimised staffing approach are key considerations to ensure suitable staffing whilst maintaining service quality as the sector recovers. An agile operation will have the greatest opportunity for success.
A wide network of part-time, on-call employees or contracted service providers will allow hotels to achieve profitability more quickly by adjusting staffing costs and total payroll burden to meet required service levels in real-time.
Innovative labour management practices will without doubt be part of our ‘next normal’ state for the hospitality sector.
4. Examine your big data
‘Big data’ is the term used to describe the large volumes of structured and unstructured data that a hotel or business collects every day. Through the analysis of big data, hoteliers can gain insights that lead to more informed business decisions, an advantage over competitors, detailed guest profiling, and much more.
Hotels often misunderstand the very concept of big data. For example, generic data that is collected at the market level, such as STR reports, does not qualify as big data.
Big data represents a significant competitive edge at your disposal, but only if you have the most suitable tools to understand it. Most hotel data is unstructured data – which is where a customised and scalable tool earns its salt. A big data tool organises large volumes of data into smaller, manageable insights you can use to make pricing, marketing, sales, and general operational resourcing decisions.
For example, a revenue management tool will source and import rate shop data from many data sources, including competitor hotel websites and online platforms. Then, using carefully crafted skills like artificial intelligence and robotic learning provides actionable intelligence and insights in a clean user-friendly interface for hotel staff to interpret and use. It’s accurate, efficient, real time and a huge cost saving whilst providing unrivalled data interpretation.
5. Create new content
Creative content marketing has been proved to deliver resounding results. According to Booking.com, a 100% content score can increase conversion by up to 18%. Regular content updates mean more guests.
One of the most effective methods of growing audience engagement, expanding your brand presence and driving conversion, content marketing is a mission-critical growth method for most businesses in the hospitality sector.
Targeted, interactive, and appealing content helps you build and foster stronger customer relationships and trust while it educates your community. Building brand awareness with useful content engages target buyers and drives conversions and effective content will bring more traffic to your website and your direct booking channels. More content gives your site visitors a reason to stick around and improve search engine optimisation (SEO) and online visibility.
Valuable content helps you build credibility and authority, and you can use quality content to position your business as an industry expert.
Content is shareable! The more content you share, the more social media traffic you can generate, and content marketing can help you make personal connections.
Video content is a great option to significantly increase engagement:
- Videos on landing pages increase conversion by more than 80%.
- Marketers who use videos have 41% more traffic in web searches than marketers who do not use video.
- Blog posts, including videos, generate three times more inbound links than posts without videos.
- Postings on social networks with video generate 12 times more shares than just text and images.
- E-mail content with video generates more than 40% involvement.
