Hotel Revenue Management: Every Square Inch Matters!
By Mark Davis President & CEO, Sun Hill Properties, Inc | October 2022
What do you do with a destination hotel located at the gate of a major Entertainment Capital Theme Park that closes due to the impact of a forced shut down by state and local government jurisdiction?
Of course, following suit would have been the easier decision, which many local hotels and businesses did to minimize expenses. The better question to ask ourselves was, "How can we keep as many of our 300+ Full time team members employed who depend on us for their family's well-being?"
The second question we asked was, "Who needs our services to sustain their new normal of responding to the impact of this global pandemic?" Every crisis creates new opportunities to innovate and leverage a proactive productive response with positive results for those who embrace the challenges to adapt.
The best outcome is to engage with all stakeholders and partners to evaluate reality and respond with practical and sustainable actions for all concerned. The key is 360-degree transparency and timely communication to all members with messaging that promotes calm and a commitment to stick together, listen, learn and act on logical responses to what is controllable and uncontrollable.
The natural and most urgent response to extreme drastic revenue loss is to conserve. It helps to have tried and tested leaders on the team to brainstorm and bring out the playbook from past lessons learned. Economic cycles can generally be predicted with time to implement strategies to manage a market shift. However, effects from natural disasters like hurricanes, fires, floods, or unpredictable pandemics, with immediate impact are much more difficult to evaluate and navigate for positive outcome. From reduction of staffing to zoning the 30K sq. ft of non-essential space, every square inch, as well as every minute, must be reviewed and scrutinized to limit the loss.
An immediate necessity was to reduce 24 stories to a manageable zone of essentially required space and efficiently operating the tasks and services to remaining guests. All events quickly cancelled, rendering the 34K sq ft. of meetings and event space and 25% of typical staffing at least temporarily unnecessary. When a hotel typically operating at 90%+ occupancy annually is reduced to 10% to 15% almost overnight for an undetermined time creates panic and concern for staff and investors. It becomes urgently vital to communicate and provide resources for any impact to staff as the most important message to create a sense of calm and belief of survival and sustainability.