Yesterday’s strategies no longer work!
In the past, those responsible for a hotel’s turnover could rely on historical booking data for their turnover forecast. The day-by-day analysis of the past and the consideration of whether the same weekday in the same calendar week will develop similarly in the following year was the basis of the sales and price strategy. The past data was the most important basis for making forecasts and predicting business for the coming months and year.
Covid-19 has created unprecedented and long-lasting changes in markets and demand worldwide. Therefore, historical data is no longer relevant. The many unpredictable changes in restrictions and the resulting market shifts make backward looking. Trying to plan the future requires different information and skills. And the willingness to test new strategies.
What information do we use now instead of historical data? So what should you base your forecasts on instead? The answer is simple:
Our forecasts are now supported by forward-looking data!
The incoming enquiries (e.g. for groups or events) and the so-called “pick up” (i.e. the incoming bookings) are the only way to identify signs of growing demand at an early stage. Let’s use them!
10 insights and recommendations for smart revenue management during Corona times
- This year will not be like last year. This month not like last month. So let’s just forget what we used to know about demand trends or behaviour of different guest segments! Let’s observe and think anew.
- If it can’t get any worse, we can test everything! And we have to test it. Each strategy idea is described with a test period and desired result. The results of the new strategy are analysed and recommendations for action are derived. Testing, testing, testing is also the order of the day for your own sales strategy in these times!
- Restrictions, down payment requests, long cancellation periods cannot be sold at the moment. So let’s forget our complicated discount rates and concentrate on attractive, restriction-free normal prices.
- In times of closed restaurants, travellers wonder how they will be catered for. Information on breakfast and other meals must be transparent.
- Prices that include breakfast or even dinner are a good sell.
- Hygiene rules and great concepts such as self-testing in the hotel lobby are well received. Keep not only your own website up to date, but also your distribution channels.
Combine all strategies with guest-oriented communication. - Quick action is required! Demand should be monitored and assessed daily.
- Political decision dates (when do those responsible meet, e.g. for relaxations or restrictions) should also be recorded in one’s own action plan in order to be able to react immediately if the framework conditions change.
- Focus on the segments that are most likely to recover quickly. Almost every hotel has opportunities in the short holiday market or in the neighbourhood market. For this, offers have to be developed and distributed as widely as possible.
Modern pricing strategies, good software, knowledge and courage… and testing, testing, testing….
The basis for implementing these recommendations are:
- A dynamic pricing strategy that does not have to be aligned with seasonal price lists and can react freely to developments in demand.
- Modern software that makes it easy to analyse the development of demand and the forecast. E.g. revenue management tools. Using an automated system to collect live market and competitor data and clever algorithms for pricing provides great support.
- Create a technical basis that largely automates quick adjustments to new pricing and sales strategies! This includes modern booking software for the hotel website, a channel manager connected to the hotel software with 2-way interfaces and the know-how to ensure that, if possible, all rates are controlled via the channel manager and not the OTA extranets.
- And of course, a transparent cost and liquidity situation must make clear what minimum turnover and or minimum prices must be achieved.
