In good times, revenue managers often think about how to turn down less profitable business. But now are not good times. And simple price cuts (a popular method in times of weak demand) can only generate limited demand at the moment.
So new methods and goals have to be found to navigate a hotel through these difficult times. And many a revenue manager has to say goodbye to “irrevocable convictions”. As do I….
All those who like to berate the online travel agents (OTA) will quickly realise that it would be unwise not to use the reach of Booking, Expedia and Co. Especially in the fallow market of big cities, a hotel needs to secure the largest possible share from these booking sources. Now is not the time to optimise a “bit of distribution costs” and equip one’s own internet booking engine with better prices and then compete against the OTAs in the metasearch engines. Especially in the city hotels, it is about producing a pick-up that justifies keeping a hotel open to some extent. Personally, I remain a friend of price parity. And above all, a friend of not leading one’s own direct sales strategy to absurdity. So only participate in promotion ideas of the OTA if your own IBE can also present such offers.
Since the lockdown in November and December, I still had the dubious pleasure of three business trips. Even in the motorway service areas there was hardly anything edible apart from flabby toast sandwiches. In so-called 4 or 5 star hotels it was impossible to get at least a soup or a sausage platter with fresh bread in the evening. 99% of the websites I checked before my trip for two questions had no answer: Do I get breakfast and if so in what quality? Or: What options are there for dinner? It’s inconvenient enough when you have to travel in Corona times. One looks for the few hotels that not only implement hygiene concepts in a panic, but those that also host.
And actively communicate the new service offer via their own website, booking engine, online travel agents and Google Business.
Those who offer discounts and special offers must have a reasonable normal price in their sales. Many business travellers think like I do: Neither my customer nor my employer will reward me if I suddenly stay for 59 €. But as a traveller, I really have to expect with such prices that the reception is only manned for 3 hours and I have to deal with all the challenges alone. When 3 or 4 star hotels suddenly drop into this price level, it is more likely to be an approaching insolvency than a bargain. In any case, one should not pay a deposit… And for hotels this means: For bookings without restrictions, just don’t fall below the lowest normal rate that was set before Corona.
Because of the current unpredictability, many consumers prefer short-term cancellations. Also in holiday hotels for holiday bookings. I could not observe that in city hotels a change from 24 hours last, free cancellation option to 6 p.m. on the day of arrival caused a noticeable increase in bookings. But 7 days or more, are currently hardly booked.
Apart from a good price, additional services work: Free upgrade to a better room category, drink voucher included, free rental bike or similar things are accepted.
There simply needs to be enough time to measure the impact of a strategy change. Frantically redoing everything once a week will get you nowhere. It is clearly the time of the cost controllers and not the revenue makers.
As many hotels in the big cities have already closed, there are also opportunities. If the regulars of your biggest competitor suddenly check in with you. Please remain a host.
Translated with www.DeepL.com/Translator (free version)
Do you like the content? Please share: