There are a great number of changes occurring in our industry that require monitoring and adjustments.
These include disruptions and changes that have transformed our industry from pre-pandemic to post-pandemic thinking, and before we complete our business plans for 2022, a review of macroeconomic data is in order.
A strong vaccination program and fiscal support across the U.S. is driving a surge in demand for the vaccine as reopening progresses. This surge will continue because all major economies are going to be growing out of this unusual recession at the same time, give or take a few months based on vaccinations and the Delta variant’s impact.
The recession brought on by COVID-19 was not a financial crisis or the result of economic imbalances, as many prior recessions were. Further, the scope of the governmental response was unprecedented — including interest-rate cuts to near-zero levels in some countries as well as pumping cash into economies through the purchases of government securities. In the U.S. alone, trillions of dollars were unleashed to juice the economy.
Yes, supply disruptions will prevent a massive recovery at the end of 2021, but supply and demand will be in balance by next year. The labor market disequilibrium will determine how quickly the recovery can advance but the unemployment bonus removal will help. Here’s the pick-six plan that will work in 2022. No, not the "pick-six" that is an interception and return for a touchdown in football; rather it is six steps to marketing success in 2022:
The following action needs to be taken:
1. Review your trend report and competitive-set information from STR. (STR is CoSTar's hospitality analytics firm.)
2. Meet with general managers and marketing team members of primary and secondary competitors. I guarantee you will learn something from this. Take an on-site tour of each business, establish a referral program and coordinate a market review with your brand marketing manager if appropriate. You can also look at all available digital marketing opportunities right now.
3. Develop a 2022 sales and marketing budget. Do not assume growth from last year, this year or 2019. Review the STR report and other market intelligence and marketplace reports carefully. Ensure your email lists are updated for newsletters and blasts and prepare to use them to aggressively promote.
4. Meet with key contacts at your convention and visitors bureaus and chambers of commerce. Obtain a list of trade show opportunities for budgeting as they are putting their plans together now, if not already done. Qualify key companies and individuals to create or update your own emailing list. Business journals have great lists.
5. Create a strong database for e-mail promotions and ensure your website is not a brochure but rather a focused, customer-acquisition medium. Create website awareness via pay-per-click and unique offerings and ensure your mobile site is as good as your website.
6. Continuously create and deliver “can’t-resist” digital content. Social media rules the day with its potential to engage in meaningful conversations with a loyal fan base and potential clients alike. Engage a public relations person or team to jump-start some awareness and ensure you have a permission-based electronic marketing program.
Remember to calculate the lifetime value of a new customer. As an example, if a traveler stays with you two nights per month at $150 per night for five years, that is $18,000 in today’s dollars. This data is helpful in determining the value of a new customer and should be considered when you launch pay-per-click campaigns.
After step 3 above, you can forecast your occupancy and rate by month. Now, you can complete your budget by zero-based analysis of what it will cost next year for labor, supplies and services. Use this process now or risk losing your competitive edge. Enjoy the remainder of summer of 2021!
Robert Rauch, CHA, is a nationally recognized hotelier and President of R. A. Rauch & Associates, Inc., a leading hospitality management and consulting firm. Rauch has over 35 years of hospitality-related management experience in all facets of the industry. Widely recognized as the 'hotel guru,' Mr. Rauch maintains a blog where he expounds upon insights and trends in the hospitality industry at www.hotelguru.com. Along with the blog, he also publishes Hospitality Innsights, an electronic newsletter that is distributed monthly.
Mr. Rauch held nearly every position in the hotel business including General Manager of full-service Four Diamond hotels for Hilton and Embassy Suites. His education includes a bachelor’s degree in Hotel Administration from Western International University and a master’s degree in Tourism Administration from Arizona State University. He is a Certified Hotel Administrator and has served as chairman of numerous tourism organizations nationally and in the western U.S. He has been directly involved in developing several leading brand hotels, some of which the firm still owns and manages. R. A. Rauch & Associates, Inc. currently operates hotels in California, Arizona and Colorado with several under development.