How to Succeed in a Difficult Economy

Hotel occupancy is suffering...

In my last entry, I discussed the current trends in RevPAR and HPI. Occupancy is suffering, and this deterioration looks determined to continue for some time. In fact, I read on Travel Daily News last month that,

“PricewaterhouseCoopers estimates 2009 average U.S. hotel occupancy will fall to 56.5% - a decline of 5.2% from 2008 and the lowest in more than 20 years. More importantly PwC projects RevPAR to decline 11.2% this year. It is hard to imagine any hotel getting through this year unscathed.”

Therefore, now is the time to ensure that your hotel stays one step ahead of the competition. The economic situation will hurt your competitors as well, and they may not ever see the light at the end of the tunnel. You need to guarantee that you do; but how will you accomplish this?

It’s all to do with your internal and external marketing…

Many hotels have begun to slash room rates in an attempt to fill rooms. However, you must remember that this tactic can be easily copied by the competition. If you and your five competing hotels all slash prices, or even offer additional nights for free, the impact on RevPAR will be significant. Plus, once you have dropped your room rates, it will be difficult to restore them once the economy improves.

So, don’t slash your prices for dramatic effect; increase price flexibility and be prepared to add value to your guest’s stay. Consider working with outside businesses, such as car rental or day trip companies, to create packages that will ‘wow’ your guests.

In the same way that many companies have cut training, a large number of hotels are now slashing advertising. Ensure that you have a large online presence by improving your hotel’s website and conducting search engine optimization; you need to be listed on the first page for any keyword searches related to your hotel and your area.

Make sure that every page of your website and every word of your hotel blog communicates value. Your prospective guests need to know that they are getting maximum value from every pound they spend. Remember that comfortable surroundings during difficult times make your hotel worth every penny your guests spend.

Customer Relationship Management...

Managing your relationship with your customers is extremely important right now; you need to establish loyalty. Hotels with the most loyal customers are also the most profitable.

Your competitors will most likely focus on attracting new customers. You need to have a more balanced approach toward customer acquisition and retention and actively manage your customer relationships to build loyalty.

However, managing customer relationships has become sophisticated and requires a remarkable amount of coordination. It is all about the movement of prospective guests through the customer lifecycle from awareness to loyalty. This can start with your hotel website, blog, and any other form of advertising you use, all the way through to the up-selling used by employees and the hotel booking system that you use to store guest information.

Remember that loyalty comes as a result of:

1) Using advanced CRM and Hotel Booking Software which has become extremely affordable, even if you are running a small hotel, motel, or guest house.

2) Ensuring your advertising and added value are highly personalized and individually targeted. Remember that your message must be relevant to your stressed and financially-burdened guests.

3) Creating a strong emotional bond with your guests. There may be years between visits but loyal guests do return and give you referrals. Everything from the first view of your website, through the moment they make a booking, to the moment they check out must feel personal. Guests want to feel wanted.

If you take this advice on board, you stand a greater chance of staying ahead of your competitor. Now is the time to implement the new CRM and booking system that you’ve been considering. If you properly implement these systems you will significantly enhance your chance of success during difficult times.

Don’t forget that loyalty is the key to success!

Good luck to you all,

Emma

London Hotel Prices Fall

It has been interesting to monitor Hotel Price Indexes (HPI) over the last few months. Having spoken to a number of GM’s worldwide; during this economic downturn they have been reluctant to lower prices and have instead added value to their stay packages in order to keep their RevPAR high and limit the panic caused to hotel owners, lending institutions, and management companies.

In fact, it was only two months a go that I gave three cheers to the hotel industry for seeing the bigger picture and continuing training throughout this recession. It seemed that hotel GMs had donned their armor plating, had their heads down, and were prepared to battle on into the unknown.

I’m currently based in China, and the financial crisis is yet to hit in such a dramatic way as in the east. Hotel occupancy within 5* hotels based in manufacturing and engineering cities has dropped due to redundancies in the west and the removal of foreign experts on international assignment; however there is no immediate need for pessimism.

Yet, I was not surprised to read on Travel Daily News International that hoteliers across the UK - and especially in London - are continuing to drop hotel room rates. Hotel.com’s HPI shows that London hotel prices were down by 12% to £111 per room on average in the last three months of last year.

The article by Theodore Koumelis continued to say that “Hotels.com saw a 49% increase in the number of searches by Eurozone travellers for London hotels in December 2008 compared to a year earlier, as travellers sought to take advantage of the struggling pound.”

A quick search of hospitality related websites, and the travel section of British newspapers, reveals that the British press has at last turned PRO-BRITAIN in terms of it being a holiday destination. For years it has been difficult to find any positive press, yet now every British city is the new ‘Place to Be Seen This Summer’. But is this tactic working? Web searches from abroad have increased because of the weakness of the pound, but that isn’t going to aid the Brits themselves in any way.

Travel Daily News International says, “UK hotel prices were down by an average of 12% at the end of 2008, with hotels in the north-west seeing some of the biggest price drops. Prices in Blackpool fell by 22% to an average of £79 per room per night, and in Manchester by 19% to £73.”

So you tell me, is the title of Theodore Koumelis’s article, “Boost for Tourism as London Hotel Prices Fall”, an accurate one? Will the UK HPI continue to fall during this economic turmoil, or will the price increase indeed be a boost for tourism?

Click here to read the full article.

Bye for now

Emma

I am still on a search for the best hotel booking system for small to medium sized hotels. If you know of hotel booking software that can beat www.hotelsystems.co.uk for ease of use and functionality then please contact me on eharradine@hotmail.co.uk

The Importance of Decision Making

Today, I wish to cover a subject often spoken about within the hospitality industry, which is also a topic I broached not long ago when discussing empowerment and customer service related issues: Decision making!

The decision making abilities of hotel employees can make or break a guest’s stay. However, hotel owners and GMs too often reward the managers who achieve immediate results (often through luck) and not those who have made some admirable (lateral thinking) judgments which, often through no fault of their own, have not produced the instantaneous results required.

The owners, CEOs and GMs have got where they are thanks to their excellent decision making skills, however, if they were to look back at all the good decisions they made which went badly, they should be thankful to have a job at all. In today’s climate they be cleaning the toilets rather than managing hundreds of employees.

Professor Zeger Degraeve, who is the ‘Sheikh Mohammed bin Rashid Al Maktoum Professor of Innovation, Professor of Decision Sciences’ at London Business School, believes that “the result is irrelevant… as a measure of decision quality.” Professor Degraeve goes on to say that a decision is made in a split second and then implemented (often by others) at a later date, the result is then observed in the future. Events happen that a manager could not possibly foresee and not every variable is controllable by the hotel or the decision maker. “Therefore, the quality of the result is not an indicator of decision quality and the result is irrelevant as a measure of decision (and execution) quality.”

It is important for hotel industry leaders to observe the decision being made at the time and judge the employee based purely on their decision making ability. The judgment may be made based on efficiency, profit, or even guest satisfaction, but it needs to be made based on the question, “what are we trying to achieve?” In the hospitality industry, the answer to his question will nearly always be guest satisfaction and therefore, if the customer was happy with little extra cost to the hotel then the decision was a good one, even if the result in the long run is less than originally hoped for.

For more information on Professor Zeger Degraeve and his thoughts on decision making, please go to HoteleMarketer, where there is an in-depth interview with the aforementioned thought leader.

To link this back, briefly, to hotel booking systems:

Hotels, motels, and guest houses choose hotel systems based upon their needs at the time of purchase. They cannot possibly foresee future events that will render the booking software unusable to them. It doesn’t mean that a bad decision was made; it purely means the results are poor. The overriding factor of hotelsystems.co.uk is the ability to customize the software for individual requirements... Meaning no bad decisions short or long term.

Hospitality Industry Networking

As a hospitality industry professional it is of utmost importance to keep up-to-date with latest industry trends and practices. This isn’t difficult if your hotel or hospitality-related business is based in a large city of a developed country; however, if you are based in a small village on the outskirts of somewhere like Ouagadougou or Timbuktu, then staying ahead of your competition isn’t always easy.

It is for this reason that online social networking sites are vital for communicating with hospitality peers and experts.

Sites like Facebook have become popular with Food & Beverage Managers and Marketers for keeping in touch with clientele. I receive messages and wall posts almost daily from the Sheraton Nanjing Kingsley Hotel & Towers and also the Sheraton Tianjin Hotel. The Starwood Group has been quick to adopt modern methods to attract guests and clients to their bars and restaurants. And it works!

However, what about exchanging ideas and practices with hospitality peers?

Sites like LinkedIN are great for networking with a wide range of professionals. However, my personal favourite for networking within the hospitality industry is WIWIH (Who is who in hospitality) which allows you to discuss anything from the day to day running of a hotel to occupancy and RevPar with industry experts.

I have been using the forums to continue my search for the ultimate hotel booking software.

The extremely active forums will provide inspirational ideas for promoting your hotel and getting ahead of your competition.

Until next time,

Emma

I am still on a search for the best hotel booking system for small to medium sized hotels. If you know of hotel booking software that can beat www.hotelsystems.co.uk for ease of use and functionality then please contact me on eharradine@hotmail.co.uk

Hotel Booking Software - Review 2

Today has been an enjoyable and informative (if not so productive) business day. As I mentioned in my previous post, Tristan from hotelsystems.co.uk is in the process of updating the booking software to embrace the varying requests of the hotel industry. So, after an hour of begging and pleading (I have no shame!) Tristan agreed to give me a sneak preview of his work in progress.

I’m always nervous when any of my preferred software is updated and supposedly improved. Will the level of functionality remain high? Will it be as user-friendly? Will it remain efficient to use? I was thrilled to discover that the answers to these questions were yes, yes, and yes again.

The booking system offered by hotelsystems.co.uk is one of an increasing plethora of applications that promise to be the perfect addition to your hotel, make your motel more productive, and eradicate the possibility of double booking. However, the difference between this booking system and the others on the market is the slimline efficiency and level of detail provided.

I noticed a number of definite improvements, including:
1. Credit card number encryption in the database.

2. The highlighting of bank holiday dates in the booking calendar.

3. An extended payment section to allow the special addition of payments – Which permits for the addition of details to a report, allowing users to reconcile the deposit payments for bookings against their takings.

Plus, these developments have been made without hindering the intuitiveness of the program; bookings flowed in a highly logical manner and I was never left wondering which button to click or function to use.

I cannot recommend this software enough.

I am, however, extremely keen to discover alternative hotel booking systems for small to medium sized hotels, motels, and guest houses. So, if you know of hotel booking software that is more efficient or detailed than the system offered by http://www.hotelsystems.co.uk/ please contact me on eharradine@hotmail.co.uk

Thanks for reading!

Emma

Hotel Booking System Review

A few weeks a go I posted a shout out to Ed Sansbury who is in the process of developing a cutting edge hotel booking system. I have had the privilege of viewing his software during its infancy (I believe it to be less that fifty per cent complete) and am impressed with the options section, which has clearly marked tabs allowing users to customize the system for their own requirements.

At this early stage, my feedback to Ed included improvements in integration to enhance the logical system flow. These improvements included naming conventions, a call to action, booking reference customization, an enhanced pricing system, and free fields for tax.

I am very much looking forward to seeing the finished version of this hotel booking software and am confident that Ed is capable of developing this system to a highly competitive level.


Despite the fact that the system is less than fifty per cent complete, I would rate the software with a 4 out of 10, with a potential for 8 or more in the future.

Good luck with the continued development, Ed!

On a related topic, I spoke with Tristan from http://www.hotelsystems.co.uk/ today and was very excited by news of his latest booking software upgrades, due for release shortly. I'll be taking a look over the next couple of days and will post information about his updates here. So, watch this space!

Hotel Industry Insolvencies

I’d like to start on a personal note by highlighting the very sad death, last week, of one of my heroes; John Martyn, the British singer, song writer, music legend, and guitarist extraordinaire. His jazz, folk, funk, and blues fusion was always original and utterly captivating. He’ll be sadly missed by his many devoted fans, and certainly by me. Rest In Peace, John, Rest In Peace.

And to continue the depressing tone of today’s blog, I feel the need to talk about recent insolvencies within the hotel industry. As the ‘credit crunch’, ‘economic tsunami’, ‘global recession’, or whatever you choose to call it, has over taken our personal lives, businesses, conversations, nightmares, television screens and newspapers, I have been reluctant to add to the ever-increasing depression surrounding our lives.

The number of small-to-medium sized hotels, motels, and guesthouses to go bankrupt in the UK over the last ten years has been reasonably high in comparison to other industries and businesses. However, large hotels and hotel chains have always remained stable with insolvencies peaking at forty-four in 2007. Whilst travel agent insolvencies had risen by 95% over two years in 2007, the percentage of bankruptcies within hotel chains had risen just a few percent per year until 2007.

However, I was not surprised to read in The Times Online today that Insolvencies in the hotel sector doubled over the winter and that “36 hotel businesses failed in the final three months of 2008, the highest quarterly figure since the early 1990s”. The Times revealed that, “the increase took the total number of insolvencies over 2008 to 87, almost double the total of a year earlier”.

For more information on the facts and figures please visit the Times Online article by Dominic Walsh at:
http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article5634691.ece

At this early stage it is impossible to foresee how long this downturn will last and how large an effect it will have on the hospitality industry, but judging by the delayed effect the crisis has had on the hotel industry, I wonder whether the effects will be seen long after the economy improves.

We just have to hope that the hotels with service and a product to be proud of come out the other end fighting fit and with fewer competitors; hopefully those hotels that should never have been in the industry in the first place.

Goodbye for now,

Emma

I am still on a search for the best hotel booking system for small to medium sized hotels. If you know of hotel booking software that can beat www.hotelsystems.co.uk for ease of use and functionality then please contact me on eharradine@hotmail.co.uk