The Post-Pandemic Hotel Revenue Survival Guide
By Cassie Bond Vice President of Revenue Strategy, Chesapeake Hospitality | October 25, 2020
With the immediate impact of the crisis behind us, revenue management experts are working to endure-and prepare-for what's now and what's next
While there has been a great deal of analysis and discussion about the ways in which the coronavirus pandemic has affected the hotel industry, much of that conversation took place in the weeks and months following the first initial shutdowns in March.
It didn't take long for the tumult and disruption of the crisis to become the new normal. As more time has passed, there has been less discussion about what hotel owners and operators are doing over time to evolve, adapt, and keep moving forward in a positive and productive manner. The current period, however, is no less critical than in the early days of the pandemic, where hotel management companies were working to maintain operational viability, positivity, and productivity amidst the uncertainty of tentative reopenings and an as-yet-uncertain public health landscape.
Striking the right balance between what now? and what next? is vital. Making sure that your personnel and your properties aren't just keeping their heads above water, but starting to swim in the right direction, is absolutely essential for not only minimizing short-term losses, but maximizing long-term gains in a post-pandemic future.
Here is how some leading hotel management professionals and revenue management experts are working to do just that:
1. Maintain Perspective
While optimism is invaluable, realism is a necessity. Recognize that we are in the early stages of what is projected to be a five-year period of recovery. While there are some promising green shoots and signs of slight recovery in some markets, the road back is due to be fraught with ups and downs. Make sure you are using that time wisely. With most major events, demand-generators, and large groups having canceled, and most corporate travel suspended for the remainder of 2020 and into the first quarter of 2021, now is the time to focus on doing what matters most and staying true to owners, clients and employees.
In practice, that doesn't mean letting standards slide but staying on your "A" game, avoiding complacency at all costs, and using this time to ensure your existing processes and procedures are optimized for peak performance. That applies to all departments, but is especially critical for revenue managers, who need to make a point to stay aggressive and maintain their competitive edge. That requires both endurance and persistence. But those that can stay focused and make the best use of their time will vault to the head of the pack at a time when turmoil and uncertainty is creating not just new challenges, but also new opportunities.
2. Keep the Team Motivated
Keeping your team motivated in a fully remote environment is a challenge that isn't unique to the hospitality sector, but it is an urgent priority, nonetheless. There are myriad ways to establish a routine that will help promote positivity and reinforce critical connections. Those include:
- Hold weekly department Zoom or virtual/video call meetings to review highlights and to share and monitor hotel trends. This facilitates sharing of ideas and collaboration, as well as providing an opportunity to resolve any challenges that may arise.
- Hold individual weekly touchpoint calls: 15-to-30-minute check-ins that keep leadership in touch with each revenue manager. These can be an opportunity to connect on current priorities and schedules, get feedback on current roles and responsibilities, and find ways to make things smoother and more efficient for everyone.
- Make frequent use of your department Teams Chat platforms and other connectivity tools. These platforms are an ideal place to exchanges messages and share information about anything and everything going on in the revenue management world.
- Hold regular (perhaps bi-weekly) professional/personal development (i.e. book club) zoom meetings or other social activities. These social events keep everyone more connected on a more personal level, building trust and comradery, boosting morale, breaking up the normal work routine, and giving everyone something fun to look forward to.
- Keep reviewing and evaluating property assignments, workloads, and reporting formats and deadlines to ensure each department is operating at maximum effectiveness and performance level.
- Find ways to help your team switch up their daily/weekly routines to keep things fresh. One way to do that is to allow a high degree of flexibility and autonomy in setting schedules and tasks.
- Provide consistent communication and feedback, making sure that no one feels they are working in a silo. Let your team know they have a strong support network that understands what they are going through and can help in any way possible.
3. Understand and Adapt to Evolving Expectations
At a time when owner expectations and needs are changing so profoundly, the ability to adapt and be transparent is a critical skillset. While many owners may not have had much involvement in the pre-COVID world, we are now seeing a heightened level of engagement as owners and lenders navigate the crisis; particularly important is the need for accurate forecasting. Owners increasingly want to hear and understand strategies and day-to-day booking trends.
More owners are sitting in on a revenue meetings, or requesting more frequent email updates or additional check-ins. This new level of involvement almost certainly stems from cash flow concerns and continuing revenue uncertainty. Unfortunately, there are no easy answers to most owners' questions. There are simply too many unknowns. It is incumbent upon hotel management professionals and revenue experts to be open and transparent with our strategy discussions, forecasts, booking pace, trends and highlights. That transparency can ease worries by helping owners see the connection between revenue management strategies and current and future performance, and help instill confidence that revenue and sales teams are taking all appropriate measures to boost revenue and adapt to a shifting hospitality landscape.
4. "Re-Teach" Automated Revenue Management Systems
The unprecedented events of 2020 are clearly the exception, not the rule. Which is why it is critically important to update the artificial intelligence data in your automated revenue management system to recognize that fact-and to account for current anomalies to integrate new information into future projections. Systems should be updated with all new information from the moment the pandemic started through the ongoing road to recovery. Systems must be frequently influenced (not just overridden) to understand what has happened to demand and what the future is expected to look like.
Future outlook, competitive landscape, pricing strategies and segmentation demands will change frequently in the current volatile environment-and systems must be updated accordingly. Without this critical context, your system will have no way of "understanding" the catastrophic change in demand, segmentation and business levels. Hotels with insufficient support and/or revenue management staffing to make these critical system updates will be relying on uninfluenced and non-updated systems to make pricing and strategy decisions, and consequently will not be set up for future success. Our revenue systems need expertise and guidance now more than ever.
5. Understand the Competition
Continue to make yourself a competitive set expert-despite the continually evolving pandemic changes. Many markets look completely different today than they did prior to pandemic-related shutdowns and disruptions. Some hotels have closed permanently, demand generators have changed and/or no longer exist, businesses have shut down or relocated, target business segments have changed, and hotel staffing, amenities and offerings potentially have changed. The net result is that your property may not be competing with the same set of hotels as it did prior to the pandemic.
Competitive sets could be changing from even what we saw in April and May and could look very different again for the fourth quarter of this year and into 2021. Understanding those changes, discussing them as a revenue team, and adjusting your strategy accordingly will be vital. Revenue managers have to remain market experts, fully cognizant of any changes that are occurring in supply and demand--who they are realistically competing against? Understanding your true competition-as well as the business demand/segmentation changes in your market(s)-helps to create and execute effective revenue management, sales, marketing and eCommerce strategies.
6. Fish Where the Fish Are
Recognize what segments are booking and take advantage. Every market is different, and booking trends are changing constantly from month to month. Revenue managers should be watching these specific trends and developing strategic action plans for those key segments that are booking into their markets. These trends can look very different than in the relatively recent past.
For example, a typical scenario in today's environment might see a market with less consortium, national and local corporate booking into a market, and a boost in leisure numbers (especially from local and/or drive feeder markets) through retail, discounts and packages bookings-even on weekdays. This means that not only have the primary booking segments changed, but so have day-of-week stay patterns, booking lead times, room type pricing differentials and even booking channel contributors. For hotels in that market, that could mean less GDS production, but more Direct Web/Mobile and Online Travel Agency production. Revenue managers must be proactive and adjust their strategies to focus on shifting share in these new segments and channels.
The ripple effects of these shifts can be profound. A hotel that, pre-COVID targeted corporate/association/government group leads and bookings likely had their entire sales/marketing resources and staffing deployed to those segments. If that same property is now primarily receiving leads for SMERF/Airline/Contract business, there needs to be a complete shift of manpower, focus and priorities. It also means some hotels are now going after business that wasn't even a consideration prior to the crisis.
Revenue managers will need to stay open-minded while showing the value of all types of business. They have to make sure sales teams have the most accurate and timely data to make smart business decisions now and in the future. So yes, pay attention to changing currents, but make certain you are casting your net where the fish are today to capture the segments that are booking into your markets.
7. Remember: Perception Matters
Finally, recognize the fact that how guests see your hotel is more important than ever. Revenue managers should also be using this time to make sure that all content on all channels is correct and current. This means making sure that amenities, hours of operations and closures, packages, attractions and all hotel offerings are updated and relevant for guests. This also means that the content should reflect what each hotel is currently doing with regard to safety and cleanliness procedures throughout the hotel.
Guests understandably want to fully understand every aspect of their stay prior to booking so they can feel secure in making their travel arrangements. Older, stale, pre-COVID content on any booking channel will hinder new bookings both today and moving forward. It is critical for revenue managers to be reviewing this content in detail with their General Managers and Directors of Sales to make sure it is displaying with 100% accuracy on all sites. Just like owners, guests are looking for full transparency.
There are certain to be more challenges ahead as the pandemic, social unrest and political division impact our economy. It is your responsibility as a revenue manager to identify new opportunities and move market share while also supplying accurate forecast projections to help management and ownership navigate a very difficult financial environment - you must remain diligent and engaged.
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