By Amanda Nicholas
The US travel economy experienced a $492 billion loss from March to December 2020. There is no doubt that the hospitality industry was one of the first segments affected by the pandemic and may be one of the last to recover. To keep your doors open and position your hotel for ongoing revenue recovery, here are 3 key points to keep in mind.
Train for the marathon, not the sprint
Hotel revenues are down an astonishing 80% with some forecasts predicting that RevPAR won’t return to peak levels until 2026. We saw post-9/11 that some submarkets of hospitality bounced back faster than others. As the industry pulls together to recover, it makes sense to take advantage of the latest insights gathered on doing business during the COVID-19 era. You are not alone, there are many tools and resources that can help on the road to recovery.
Group, corporate negotiated and many retail segments may be the last to recover, dependent on widespread vaccine distribution and herd immunity. So, what is your revenue generation plan in the meantime? There are several essential businesses that are not only traveling now, but whose production is exponentially higher than ever before. Learn how to redefine your competitive set, target new segments and go after opportunities that exist outside of your immediate backyard.
Spend for next quarter, not this quarter
In a prolonged downturn like this, it is wise to evaluate your expenses. Labor is typically any hotel’s largest expense, so it’s important to assess for any inefficiencies. As you’re cutting costs, however, keep in mind that hospitality is still our business. If guests feel the effects of drastic expense control, it could potentially erode your revenue and cancel out the savings.
Keep in mind also that direct sales and marketing efforts take time. Very few travel segments respond inside of a 90-day booking window, so be careful about cutting back too extensively in this part of the P&L. Look for cost-effective ways to fill your rooms in challenging times without adding to staff. If you don’t have a targeted, focused effort on generating revenue today—then you are only prolonging the economic impact to your hotel.
Talk to today’s travelers, not yesterday’s
We’ve learned that not all revenue-generating segments are traveling, but there are key segments to focus your attention on. Leisure travelers still want to get out and go. Since most begin their search and selection online, ensuring your hotel presents itself in the best way possible is critical to capturing new leisure customers.
Another segment traveling now is special projects. Special project business is happening all over the country. These active segments have very different needs and expectations. Do you know how to attract them and service them as guests at your hotel?
Ask several team members to perform an audit of your hotel’s messaging, positioning and rate offering so you can make any necessary modifications.
Brainstorm ideas that creatively address these key factors that are critical to exceeding guest expectations:
- Does my hotel provide any updated messaging based on state-mandated policies?
- Does my messaging include protocols to ensure guest health and safety? Do we include images to help communicate this?
- Are there more opportunities for my hotel to participate with other OTAs?
- How has my hotel adjusted our food & beverage options, housekeeping services or fitness options?
Hotel revenues are down an astonishing 80% and revenue recovery during and after the pandemic will take time. Taking action on what you can control can make all of the difference. Keeping in mind these three key points will not only help you keep your doors open and meet any debt obligations, but will also help you favorably position your hotel for the market’s return.
Amanda Nicholas, VP of business development at Jacaruso Enterprises has led several revenue organizations through all demand cycles, including Noble Investment Group and OTO Development.
This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.