Do you want guest to stay with you simply because you need to fill a bed or do you want them as a long-term client and make your marketing actually yield revenue instead of posting for the sake of doing it?
In times of high demand, we are often ‘welcoming guests’ because their usual hotel was full or too expensive of whatever the reason may be. Often, we do not make personal contact they check in and out and never to return. The same goes for low demand periods when your rate is the deciding factor for them to book based on area price comparison. In both instances we wasted all our efforts for acquiring the guest, whether it was time spent researching and tracking and pitching the ‘perfect’ deal or hours wasted away on often tiring social media updates, promotion formulas and ‘clever’ T&C’s. People made a choice but we never knew what those tick boxes in their minds was filled the pointed to your hotel. This valuable information and ‘free’ market research are allowed to walk out the front door.
Look we are all people, when we buy, we want it on ‘our terms’: we want (i) value without paying the world for it, (ii) we want to feel the same guest satisfaction to what other reviews have scored the hotel & matched to the rate we paid (iii) we want to have a good experience. Every single guest arriving has had to consider at least one or more of these three factors before confirming, yet we let them arrive and wave them goodbye. Get our point? We don’t know what made them decide to choose the hotel, we don’t know why the came here, we don’t know how they chose us.
When info described above is collected, analysed and interpreted we will understand what sets us apart form the hotel next door or down the road or in the city. We will know where to look for ‘more of these guests’, we will know where and how to spend our marketing and sales budget and we will know what to do in the rooms. (don’t confuse this with top 10 report or geo report etc – we are talking about guest interaction – interview – ‘hello how are you’ type info.)
You know of Salt bae & Café del Mar yes? These are just a regular eateries, all have a table chairs, and food. What sets them apart? The way salt bae cooks – it’s a show – the trademark salting move have made them known all over the globe. He started in Istanbul and is global now. Café del mar is just a bar in Ibiza amongst many other – what made them different and successful? The type of music they play. When you visit these countries or towns what is on your to do list? Of course, you know. The common denominator is these operations know what their clients want and where they are and why they come – they can therefor provide the anticipated experience with 100% success rate.
we don’t have to build bars and restaurants to achieve the same in hotels or any accommodation establishment but maybe your location is so ideal that it could work? However, price & reviews needs to be in harmony for start to attract buyers in low yield and high for that matter. Remember super high rates in times of high demand delivers customers with very high demand – why? High price = high expectation and if you are able to provide the anticipated experience you will keep a customer time and time again. You will equally lose them if there is no sync between price and experience.
Now what? All buildings have owners or leases to be serviced, all stakeholders need ROI. Be careful not to pitch a rate supplied by an accountant because our 3 tier factors will certainly be excluded in this formula. How do we decide on a rate? A rate comes from a budget which comes from an accountant which was instructed by the owner (s) based on investment return. This budget is most often than not based on a nominal %age increase from the previous year. (related article here) In normal trading without external factors interfering this model works well, but lets take Cape Town’s past 2 years as an example: 2016: absolute bumper year: record figures (what does the investor want? More money = increase 2017 on 2016’s performance) 2017 ended up doing 10-20% lower than 2016 – but ok moving on 2018 will be ‘our year’ (you know – making these unfounded statements in meetings and reports without a clue of how we can make it ‘our year’ – just hoping it will be ok. 2018 comes and us at www.hotel-revenue-manager.com identify the booking trend change in Mar 2018 already (related article here) and yes its was so bad that most were down 50-70% on previous year, in fact many traded in 2014-2015 values. (its was all macro factors impacting on trading)
What would have helped hotels? Knowing what their clients want: this ties in with our opening statement, find them, once you have them, keep them – how by understanding what makes your property different and capitalising on it. You can control the demand to certain extend and when the market is down you will be down too, but not 50%+
So, whether you offer the best online deal, or have a unique feature, or a historic heritage or whatever that might be – use it – ‘’fish where the fish are’’ (without have to go look for them)
Until next time
Jaco Your Revenue Manager
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