The Heads In Beds Mentality.
By Josh Garner
Saturday, 19th April 2008
As an SEO (Search Engine Optimizer), I don't get to delve into the ideas and methodologies of hotel management too often- I run a report, check on a site, compare it to it's own history, and adjust accordingly (I know this sounds really boring to a lot of people, but I love this nerdy stuff).

Well, as a first part initiative, I thought it best to learn a little more about the hospitality industry as a business, and not just as a website.

After listening to a lot of terms and jargon thrown around this place between the execs and former hotel managers, who are now account managers, one term stuck to my brain. Heads in Beds. Hmm...that sounds interesting. What does it mean?

I got to pull Stacy Kimbrough (Vizergy's Director of Client Marketing Services) aside for a little brain-picking to understand more about this idea.

Basically speaking, the "heads in beds" idea is that there are times to consider offering reduced rates to raise the occupancy level of a hotel. There are a number of situations in which a hotel may want to take on this mentality. To me this sounded like taking a hit, but Stacy soon cleared that up for me as well.

"Let me paint a picture for you. Sunday through Thursday you're consistently hitting your 90% occupancy. You get a steady stream of business travelers throughout the week. However, when Friday rolls around, your occupancy level drops to 30%. No more business travelers on the weekends. You may want to consider reduced rates to fill those rooms. ‘Heads in beds,' as it were."

Staying Competitive
She also pointed out the idea of area competition. If you are surrounded by other hotels offering a lower price point, it may be beneficial to reconsider your rates to compare to theirs. If you're able to lock in some rooms at a reduced rate, you're not taking the real hit of a $0 sale, which is actually a negative impact due to the cost of keeping that room (electricity, water, etc.).

Improving Overall Occupancy
Stacy informed me of a report offered to the hotel industry known as the Star Report. This allows hotel managers to keep up with a few competitors' occupancy level, allowing you to adjust your strategy to compare. Let's say you have those 90% occupancy numbers on a regular basis. You never want to stop improving. So, once you hit that number, you could begin to offer a reduced rate to increase your occupancy further, bringing your numbers up over a period of time.

Proving Grounds
We work with a lot of clients that have resorts or full service hotels in fierce competition with surrounding hotels or properties across the street. At first, they think "Hey, we are so much better than them, of course we are going to charge more." If you think about it, if you never sell a room, then people don't get to see how much better your property really is. In some cases, it may be best to offer a comparable rate to get heads in the beds, so as to grow your initial customer base, and prove the value of your ADR (Average Daily Rate). A slow increase is better than no increase (I'm learning that wisdom in the business world always has to rhyme).

Heads In Beds To Sell the Future
In my world, everything is the Internet. This all started to make sense, but I need something I can use in an online form of marketing. Before I could put my SEO brain to the task of finding that form, Stacy posed another use for the 'heads in beds' mentality. Over the last few years, you've been keeping email addresses from your patrons, and using them to communicate. Now, let's say there is a time of year that you usually don't attain a high occupancy, especially if the hotel across the street does. You may be able to look at your reservation system, determine what the situation looks like a few months out, and consider an email blast that your property will be offering a reduced rate for previous customers during that time.

Use With Caution - Price Integrity
Stacy did warn of a very real reason that being too liberal with the 'heads in beds' mentality could prove to be counter-productive. For some properties, price integrity is important to the hotel's perception. Offering a too reduced rate could send the wrong message to a potential guest (Is there something wrong with the hotel? Is there new management? Are they having a mold problem?). Each property should consider their specific situation, and strategize accordingly.

So, if you're hitting a block in finding a resolution to raising your occupancy levels, the 'heads in beds' mentality could be just the thing you need.

To leave you something in closing, Stacy's first response to my email questioning the 'heads in beds' idea came with a few neat numbers (I'm a nerdy guy. Numbers I can relate to).

If you can sell: 100 rooms at $100 each = $10,000. However, if you can sell 100 rooms at $100 each and 25 more at $75 = $11,875. You just made the owner an extra $1875 in one night!! Let's say you could do that every Friday and Saturday night. That's an additional $195,000 in the owners pocket, because you sold some of your rooms at a discounted rate in order to place more heads in beds!!!

Josh Garner is an SEO and owner of www.seo-factor.com . He has been providing ranking and Internet promotions services to small and medium sized businesses for 4 years, whole-heartedly believing that small is indeed the new big.

Stacy Kimbrough
To give you a little history on Stacy, as the Director of Client Marketing Services, her responsibilities include directing the account-management, customer-service, copywriting and design teams for Vizergy. Before joining Vizergy, Stacy spent twelve years in the hospitality-sales industry, working with leading clients such as Marriott, Hilton, Choice and Ramada.

You ever meet one of those people that make you wonder how they were in an industry for so long? Yeah? Well that's not Stacy. I whole heartedly believe she could manage a 4-cage kennel and turn it into a 5 star resort in under a year. Be sure to read more about her and the other Execs of Vizergy.

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