Ten Tips for Hotel Owners and Operators to Survive the Recession

By Jose Acosta COO, priZem Hospitality Solutions | February 12, 2010

Over the past year, hotel professionals have been inundated with various publications and Internet news articles about current market conditions and the effects of declining ADR, occupancy, RevPar, as well as an alarming rise in hotel foreclosures. Although nobody can predict exactly when the economy is going to rebound nor when hotel prices and occupancies will return to previously desired levels, it is probable that there will continue to be a decline in corporate executive retreats to luxury resorts, annual board meetings, corporate sales incentive trips, and annual holiday parties over the coming year.

Moreover, historically although all business cycles include the same pattern of recession followed by recovery; it will be difficult to predict the timing and strength of the recovery for the overall market. In fact, one can only wonder about the extent of recovery for specific markets such as luxury, as well as whether there will be a recovery at all for the condo-hotel market.

Having said that, it is important to pay attention to the items that will help maintain profitability by focusing on what I think are the top ten key recession survival best practices. These best practices do not necessarily appear in order of priority, and some of these practices will be more or less valuable to your hotel depending on its unique circumstances.

As you read these practices, please try to select the order that could affect your business and try to focus in the highest impact items.

1. Resist Reducing ADR

Currently we are seeing reductions in ADR in order to stay competitive in the market, but this is simply not the right approach. Instead, hotel companies should go back to basic management 101 as in the old days when hotel executives and managers watched the day-to-day rates, revenues and expenses, which resulted in accountability and ownership of each business unit within the hotel.

Hotel Newswire Headlines Feed  

Mike Sawchuk
Janine Roberts
Jim Poad
Gianluca Giglio
Jennifer Dunphy
Bonnie Knutson
Brandon Dennis
Ken Hutcheson
Alan Villaverde
Anne-Juliette  Maurice
Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.