GAME-CHANGING REVENUE OPTIMIZATION RULES
Maximizing Revenue While Adhering to New Service Standards
The global pandemic has turned everything on its head, with the hospitality industry hit particularly hard. As hotels slowly reopen, they must adjust their revenue strategies to ensure they drive demand while being careful with their pricing decisions.
In such challenging times, it’s tempting to drop room rates to stimulate bookings. But for many travelers, the priority will not be price, but safety. A $100 discount on the room rate is unlikely to tempt the decision-making of many but could end up harming a hotel’s profitability if there’s very little demand to drive in the first place.
Time to adjust revenue strategies
Up until recently, Revenue Managers could forecast demand based on historical data, such as monthly booking patterns and seasonal trends. But for obvious reasons, this kind of data is no longer much help.
As such, Revenue Managers need to carefully monitor automated recommendations from RM systems that might attempt to drive demand by lowering rates — something that could lead to costly pricing errors that hotels can ill afford right now.
Doug Kennedy, President of the Kennedy Training Network, notes that accurate forecasting will prove incredibly complex as the market flickers back into life.
“The market has changed in a way that our forecasting tools and technologies can’t discern. So there has to be less reliance on automation and more emphasis on collaboration and discussion between departments. Revenue Managers and Sales need to be in constant communication to help monitor the market, identify where demand is picking up, and create effective pricing initiatives.”
President, Kennedy Training Network
Marketing to a new mindset
Marketing teams will also need to rethink their approach. Not just in terms of how much to invest and on what platforms, but how the message itself matches the mindset of travelers.
Emily Bowen According to Emily Bowen, Adjunct Professor and Director of Revenue, Reservations and Channel Distribution at Penn State University, it’s especially vital to consider the emotional context behind current decision-making. While hotels will be eager to push bookings wherever possible, this needs to be done in the right way, and at the right time.
Emily Bowen, CRME, CHDM | Adjunct Professor and Director of Revenue, Reservations and Channel Distribution
“Prior to the pandemic, the hotel space was all about booking direct, limited-time deals, and competitive discounting. It often involved promoting scarcity and urgency-based messaging. But we need to acknowledge a shift in the mindset of the typical traveler.”
This shift in mindset involves a sense of hesitancy about traveling, which comes with a new set of priorities, concerns, and expectations. For Bowen, a hotel’s messaging needs to be sensitive to how travelers are researching and browsing differently.
“As a travel shopper, do I want to hear about the cleaning and safety measures taking place at your hotel? Because my reasons for abandoning might be down to feeling unsure about whether I should even be taking a trip right now. A hotel could potentially alienate segments of its audience who are cautiously exploring their options if their message feels tonally off.”
Of course, not all hotels have the luxury of having a marketing budget at present. If that’s the case for your property, social media can play an especially important role in keeping your brand top-of-mind and offering the latest travel information.
For instance, inform your followers about which destination attractions are open, how you’re enforcing social distancing, mentioning if local restrictions are in place, and what your cancelation policy is.
If you can be transparent, honest, and open up a dialogue with your followers, you’ll help to cement trust in your hotel brand when it matters most.
Flexible ways of working
Accurate forecasting also has implications on staffing levels. Many hotels have laid off and/or placed large numbers of employees on furlough. When is the right time to bring people back? Revenue Managers and Sales will need to work closely to ensure staffing levels meet expected demand.
For John Smallwood, CEO of Travel Outlook, hotels must rethink traditional employee roles and consider the associated costs of operating in the current climate.
“When hotels bring staff back, they need to work out how to keep them socially distanced, minimizing contact time, and providing enough personal protective equipment. So, there’s got to be a methodical approach to how people return to work, because overstaffing a property can result in wasted time and expense.”
John Smallwood | CEO, Travel Outlook
Along with upskilling employees to perform other duties, Smallwood believes outsourcing can help reduce costs and ease practical complications — including the use of a well-trained call center team.
“Voice agents can be a key part of the solution as hotels find a new way of working. If on-site staff have to take on additional responsibilities, voice agents can ensure sales calls are always picked up, help drive revenue, and relieve the burden on a busy hotel team.”
Re-imagining the hotel space
Credit Unsplash Erik Mclean Finally, there’s the question of how to normalize new standards and potentially re-fit a hotel’s business. How can a property open spaces (such as lobby areas, meeting rooms, gyms, bars, and restaurants) that ensure social distancing while remaining profitable?
While undoubtedly a challenge, some properties are finding creative ways to service guests with new experiences, ranging from virtual spa treatments and outdoor pop-up bars to revamped in-room dining and cocktail-making outside the guest’s room.
Other hotels are developing additional revenue streams by focusing on new markets. For example, Red Roof is providing office space replacement for people who want to work remotely and escape the trappings of their own homes with its “Work Under Our Roof” program.
While there’s no denying the challenges are great, creative thinking and a willingness to embrace new ways of working can help hotels start on the path to recovery.
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John Smallwood, President
|About John Smallwood, President of Travel Outlook
A veteran in the hospitality industry, John has owned, developed, and managed hotels for many years. After earning a BBA from New Mexico State University, he started his career with AT&T, gaining invaluable insight and experience in the early years of the data revolution. His experience in technology and hospitality merged in his development of Travel Outlook, the world-class hospitality contact center. More recently, he has branched out with the creation of ExpressRez, the premier contact center for the Bed and Breakfast industry, and with the creation of Annette, the first AI-powered voice bot for the hotel industry.
||About Travel Outlook
Given its progressive approach to the voice channel – in terms of performance, training, transparency, testing and the tools used to measure performance – Travel Outlook Premium Hotel Call Center has become the premier voice reservations team in hospitality. Travel Outlook’s valued client list includes Viceroy Hotel Group, Outrigger, KSL Resorts, Proper Hospitality Group, Pacific Hospitality Group, Highgate Hotels, The Irvine Company, Catalina Island and many others. Travel Outlook’s team and approach increases sales conversion and helps to create more effective voice communication between hotels and their guests, resulting in improved social scores in addition to increased voice channel revenue. For more information, visit www.traveloutlook.com.
|About Annette™, The Virtual Hotel Agent™:
Annette is an AI powered virtual call center agent that represents the next generation of voice bots designed specifically for the Hospitality industry. Annette has been programmed using a breakthrough approach to voice bots, a system built from human conversations. Using social media, chat forums, and movie dialogue, Annette learns from billions of casual human conversations to understand human inflections and multi-turn queries. This revolutionary approach means Annette understands callers no matter what they say, when they say it, or how they speak. Annette can answer FAQs specific to your property, understand multiple languages, route calls, send follow up texts, and more.
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