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Our blog this week corresponds with the latest episode of the RevGEN podcast, if you’d like to listen instead of read, check it out here!

Right now (September 2022) we have a large Hurricane in the Gulf (Hurricane Ian) which is currently making landfall in Florida, so we wanted to shift gears this week and do a special blog and podcast themed around this event. Hurricanes are obviously one of the biggest natural disasters out there, but there are a whole host of natural disasters that can also affect hotel demand. A few of these examples include things like:

  • Wildfires – These were a big issue for some of our California Hotels last year. Some of our hotels saw a major increase in Occupancy as residents were forced to evacuate, But also some hotels obviously had to shut down as they were in the evacuation area. What’s another example Adam!
  • Flooding – This year the 2022 Central Appalachia Floods were a huge event that caused a lot of disruption. We have managed hotels in this region, and hotels that weren’t directly damaged by the flooding were able to accommodate many victims of flooding, and guests staying for extended periods of time, paid for by insurance providers.
  • Tornadoes – For instance some of our Austin hotels this year had some compression from guests who sustained tornado damage to their homes, and were staying for extended periods of time with their lodging paid for by insurance providers, so this drove a lot of extended stay demand in the northern Austin suburbs
  • Winter weather – In February 2021 Dallas, where RevGEN is based, experienced “Icemaggedon” and strong winter storm that greatly impacted hotels in the metroplex. In the short term hotels benefited if they maintained power, but many hotels saw extended stay occupancy from displaced guests for 6+ months after the event as many people were having major repairs done on their homes.

Here are our 4 tips for revenue managing your hotel when you encounter a natural disaster.

  1. Tip #1: Be Ethical! Hopefully this one goes without saying, but it’s really important that, if we are in a position to pick up demand from a natural disaster that we not see it as an opportunity to profit off our peoples misery, but instead an opportunity to offer a place to stay to people who need it most. A general rule of thumb is that if you are benefiting from a natural disaster, do not price more than 10% above your running 4 week average for that given day of week. Remember that you can get into serious hot water if you are found to be price gouging! Don’t risk the damage to you and your hotel’s reputation for 1 or 2 nights ADR.
  2. Tip #2: Instead of pushing rate, close discounts, buckets, third party channels and govt. Potentially sell hotel direct only to maintain full control of your inventory. This can make life much easier with ops regarding overbooking etc. (inventory management)
  3. Tip #3: If your hotel would benefit from sustained occupancy during a natural disaster, consider registering your hotel on FEMA website if the effects of the natural disaster will linger for a long time. You may be able to pick up longer term business at a government per diem rate which can help raise your ESOCC while helping victims of natural disasters!
  4. Tip #4: Ensure hotel team is all on the same page from revenue, sales down to operations. Recommended you provide ops team with appropriate downtime reports should the hotel lose power etc. Discuss flexible CXL policies, if demand is there, you will likely be able to resell the room to someone in need.

We hope that this helps you better manage the next time you have an unexpected natural disaster, and better yet we hope one just doesn’t happen at all, but it’s always better to be prepared!!! Thanks for listening!