Hotel revenue departments are faced with some incredible challenges in this current environment.
First, unfortunately, many are operating with less staff. Our counterparts in Marketing are working with reduced, if not eliminated, budgets.
In terms of demand, we’re starting from scratch, so it’s understandable that many hotels are courting whatever demand they can find, however they can find it.
But what we can’t do, as hoteliers, is repeat the same mistakes we’ve made in the past. While it seems, most hotels have learned the valuable lesson that discounting doesn’t spur demand, it will be tempting for operators to take heads in beds at any acquisition cost.
Perhaps occupancy is too low right now for your revenue team to worry about which channels contribute most to the bottom line. Perhaps your revenue team isn’t even back at work, yet. Maybe, without demand, many of the pre-pandemic conversations about distribution and segmentation mix have gone out the window.
But remember that this situation won’t last forever, and eventually you’ll have your base of business back. For travelers who have come direct to your hotel, you will engage with them more effectively and hopefully they will become return guests. If you depend too much on OTA demand, down the road you could find that you’ve lost control of your inventory.
As our partners around the industry recover, consider these five components of a new distribution strategy:
1. Be agile and resilient, adapting to where the demand is.
Driving direct business should always be the goal, but it’s important to realize that you simply cannot stick to goals for direct bookings that were made at the beginning of the year. Resilience is knowing that you might have to adapt for the time being to where the demand is, while also knowing that you can’t stay there forever.
2. Learn through it.
As hoteliers continue to operate in crisis mode, many questions remain as to what working toward those pre-pandemic goals will look like now. It’s ok to learn through it — you won’t be alone in the experience — and find a way to eventually get back on track. But attempting to deliver on your goals from the beginning of the year is just going to lead to disappointment. Start over and figure it out as you go.
And remember, technology will be a main ally during this process. CRM and RMS technology, for example, can be a major help for gaining customer insights, as well as determining segmentation and pricing. You simply cannot rely on a spreadsheet from last year, or what your competitor down the street is doing, as you navigate this crisis.
3. The knowledge is there, but you must use it.
Once demand returns and distribution and segmentation become active again, it will be time to resume applying knowledge systems to execute a more restrictive strategy. That’s why your arsenal of data tools is more important now than ever.
It’s crucial to measure the data — the bookings and demand that flow into the property—to see how you can potentially do better. This includes revenue teams measuring the cost of acquisition as demand starts to trickle in again, to make smarter decisions based on which channels send the most profit to the bottom line.
4. Identify and target your “best guest.”
You’re likely not being picky about who’s booking a room right now. So, this offers a great time to use the data at your disposal to build a strategy – identify who your “best guest” is. Once you’ve determined your hotel’s value propositions and segmented your business to identify which types of travelers are booking the most, you can begin building guest profiles and targeting new-but-similar travelers.
Historic trends and the practice of following the comp set down the street no longer apply. Knowing your best guest — as well as the guest you have to cater to right now — offers something real for this moment in time, which you can use as a guiding path for your overall distribution strategy going forward.
5. Be a leader, not a follower.
You will likely see your competitors reacting in the short-term — dropping rates, selling on every channel available, getting any business they can, etc. Maybe you follow along in the early stages of the recovery but be prepared to turn the tables and take on a leadership role the moment demand returns.
A leap of faith is required here, but if you rely on your knowledge and experience, as well as trust in your property and product, you will know when the time is right to once again be restrictive with your distribution strategy. Don’t worry; you won’t be undercut by your comp set for long. The moment you become a leader; your competitors will surely follow.
By Jason Q. Freed
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