What do we do when (most of) the world stops travelling and needing our beds?

Well we are about to find out. Unfortunately this comes off the back of 2 poor years, 2018/9, both with each of its own reasons.

All the properties we know of, in Cape Town is sitting with an increasing deficit of 30-40% compared to the same period last year. We are trading on 2013-4 figures. The challenge is that during these years we had about 50% less available room nights per day and the long term rental market was still a profitable and affordable investment. (read our 2019 overview here). Now the growing oversupply of rooms stock vs a supercharged negative demand (including) oil price tumble, China output halted, state of our nation, market drop, SA recession, failed state owned enterprises, load shedding, coupled with Covid-19 is new territory for all of us. But we progress most when the odds are against us as we are forced to act and make it work. (just think back to 2008 credit crunch when all these new companies were born: WhatsApp/Airbnb/Earthmine and many more)

In saying that: where do find bodies for our beds, where do we find money to service the lease, pay the staff, keep the supply chain active and-and?

Here are some ideas:
– Market to local/domestic market with local/domestic price point
– Make effective use of your guest history: segment all past guest profiles, pull all relevant data and separate it by date, spent, length of stay, lead time, age, rate band (as much as possible). Create or recreate historic successful campaigns, derive metrics for effective future sales and marketing events and or campaigns based on (for example):
o Different age groups have different needs
o Travellers with pets
o Families with kids
o Guests with disabilities
o Wellness interest (spa and relaxation)
o Digital Nomads seeking cost effective stay overs such a hostel type rooms
– Register on AirBnB Experiences and earn additional income
– Offer co working space for self employed and small businesses
– Target by geographical area (IBE such as Pegasus can host this)
– Keep up and don’t cut marketing in uncertain times, especially paid search through google ads and meta search

– As for pricing
o First offer value where possible before rate reduction with discounted inclusion of ancillary revenue
o Try packages and promotions such as stay pay, last minute, tagged deals on OTA’s (remember OTA’s are also down and they will feverishly spend where travel is allowed)
o Loyalty schemes such as The Guest Book offers participation to become part of 700+ hotels worldwide serving 2 million+ scheme members, easy to join
o Offer deals on usually low occupied room types (normally the more expensive higher end bigger rooms)
o Offer upgrades prior to arrival through Oaky.com
o Offer promo code discount to all departing guests

– Possibly take this time to do some maintenance and upkeep, clear accumulated leave and owing days, train and equip staff and spend time doing everything the operation keeps you from doing such as next year’s budget, or sales and marketing plan for the upcoming season and so forth

Things must always get worse before its gets better, but tomorrow the sun will rise, and as it is with everything else, we will get through this too (I think I saying this more to myself!)

Keep positive and keep thinking of new way. But if you need a little help, why not give us a shout on jaco@hotel-revenue-manager.com? If we cannot help you generate new business in low demand, we will certainly help you keep and optimise the business you have.

Oh – remember to try and claim under business interruption following the presidential speech last night!