Down-Sizing? Temporary Closure? Re-Opening? What Do You Do With Revenue Management and Marketing?
By Bobby Saw
Tuesday, 10th August 2021

With all the uncertainties that we are facing now, setting rates based on competitive pricing and using fixed daily rates has become an even bigger challenge, and one way to overcome this is to introduce ABS (Attribute Based Shopping) combined with dynamic pricing.

I recently shared an interesting article on my posting, that featured a market snapshot on Asia Pacific 2021 based on researches done by HVS.

Published in 11 June 2021, it reported that overall hotel performance is anticipated to remain subdued from the COVID-19 pandemic impact for this year.

Something that many of us would had caught wind of by now! It also concluded that certain markets emerge to be more resilient and rebound faster while others seem to face more challenges such as prolonging lockdown, travel restrictions, social distancing, movement control, absence of international travel demand, and the spike in cases.

The top five least impacted markets are Beijing, Maldives, Shanghai, Sydney and Taipei while the most impacted markets are Bali, Bengaluru, Bangkok, Colombo and Phuket.

At the same time, I also carried out a poll, 'Do properties that have cut back cost or closed temporarily still need to have strategies & action plan in the interim and for re-opening?' Out of 42 responses that participated in the poll, 98% voted 'yes'. It is without doubt that whatever the situation, unless you are steering towards greater losses marketing efforts must not be compromised.

Simple marketing communications messages every now and then can have a huge impact on how you are perceived and put you in the forefront when the time to rebound comes around. Use social media and digital marketing to sustain market presence and maintain customer engagement.

A few simple examples could be as follows.

  • Use your social media platform to highlight changes or additional precautions taken with standard operation procedures and staff training in regards to the practise of sanitation, giving priority to guest safety with each posting. It does wonders to your brand reputation and in building customer's confidence when shared on social media.

    Focus on what matters to the traveller especially in public areas and guest room housekeeping. Also important is how table settings and food handling are being adapted or upgrade and maintenance of ventilation systems and other initiatives that are in adherence to WHO guidelines.
  • While it has become mandatory to have a Thermal Temperature Scan upon entry to the hotel, share any extra steps taken such as providing a PPE (personal protective equipment) to every room guest. A PPE pack can simply consist of a hand sanitiser, disposal face mask, and alcohol cleansing wipes or spray. Have your hotel logo on these and ensure that all of the products are eco-friendly.
  • Feature facilities such as sauna, steam room, and spa treatment rooms and how usage is limited each time to individuals and family groups that are travelling together, thus offering exclusive use of the facilities. This not only becomes a unique opportunity for guests to enjoy those surroundings all to themselves but give them confidence in your preventive and safety measures.
  • Be creative and have a marketing message that will help attract visits and stays to your property. Feature an exciting new menu, an upgraded facility or activity regardless if you are still in operations or in preparation for re-opening. If you have outdoor space, use it to promote lunch picnics or breakfast with a view or hi-tea in a secret garden. With social distancing and avoidance of crowded places, exclusivity and seclusion is the key.

Apart from remaining active on social media, do have a room promotional package featured regardless what the situation you are in. If you are closed temporarily, have a welcome back promotion that is bookable on your re-opening date.

Flexibility is the key to overcome apprehension with uncertainties such as new and unexpected travel restrictions leading to the need for postponement or even last-minute cancellation. Work with your revenue strategy team and eventually collaborate with your digital marketing partner to come up with a marketing plan for this.

Pricing! The primary objective is to achieve enough revenue to cover operating cost in a prolong downturn market. Start by looking at your fixed cost, followed by estimated variable cost per room in order to determine how much revenue is needed over a period of time to avoid losses.

At the same time, take into account additional expenses for implementing health and safety precautions in light of the pandemic.

Next, be realistic with your forecast in order to help determine how low you can go on the minimum rate. Even if market demand may not be able to generate the room nights needed, you can at least minimise losses. Based on the lowest price point, consider how much you can push it up taking into account customer’s perceived value of your offering and as well as how and what the competition is doing. Don’t start a price war and if you haven’t transited into dynamic pricing, now is the time!

With all the uncertainties that we are facing now, setting rates based on competitive pricing and using fixed daily rates has become an even bigger challenge. One way to overcome this is to introduce ABS (Attribute Based Shopping) combined with dynamic pricing. On top of the flexibility to allow re-booking or cancellation without fear of paying a penalty, ABS allows the prospect to choose what they really want and give them a better perceived value of their purchase.

It is more crucial now than ever to restructure and train your sales & marketing and revenue management team to multi-task. This will help control cost and increase productivity. At the same time, have front-liner staff trained on up-selling and cross-selling, both online and direct to capture incremental revenue.

Whether some of the above suggestions are new or something you already know but not embarked on, now is the time to do so. With current business outlook and selling methodology constantly evolving, pricing, marketing and strategies must remain updated and ahead of these evolution.

Understandably, while you may not have all the necessary tools and resources like systems or skill set to fully embrace whatever it takes, there are always ways around it.

Regardless of opinions on how long this challenge will last, it is without doubt that there’s still a long road ahead to recovery. Do you just hibernate and do nothing or do what can you to rough it out considering almost everything that continues to impact our business today are external factors and out of our control? If you choose the latter, take action now. Do not fade into oblivion, be forgotten and remain unnoticed when demand bounces back.

Bob Saw is based in Bangkok and is an independent freelancer specialising in revenue management, sales & marketing and distribution for hotels and resorts. After over 30 years of experiences at the property and corporate levels, he now conduct training workshops on a wide range of revenue management related subjects as such Revenue Management from a General Manager’s perspective; Revenue Management in a Digital World, for example. He does these for individual hotels & resorts as well as organise open training workshops regionally. He also provides consultancy services on identifying revenue opportunities, systems and processes upon request.

Coming from a hotel operations background and being a first generation revenue manager in the nineties, Bob Saw aspires for Revenue Management to be seen as a crucial role in Commercial Leadership. He is driven to helping current and future Revenue Managers achieve that aspiration. Find out more about him on www.revoptimiser.net or contact him at bob.saw@revoptimiser.com

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