With the wrath of COVID-19 halting travel globally, it is imperative that revenue managers think strategically. The tools, strategies, and technology we once used may no longer apply and work the same way. With the future unclear, the data we relied upon to make informed decision is now irrelevant. As demand changes drastically, so should our discussions about a hotel’s strategy. If you need a jolt of creativity for your revenue management strategy in this tumultuous time, here a few pointers that can help you:
1. Government: Due to COVID, there is opportunity for room nights from multiple government agencies including FEMA, CDC, DHHS, HUD etc. Ensure your property has a FEMA ID number and is listed on their website. In some cases, brands are even activating additional government rate codes to capture this business – review your brand communications. Review your government per diem along with your comps sets and consider undercutting them or pricing below or per diem.
2. Cancellation policy: Most brands, if not all, have already eased their cancellation policies to no-penalties if cancelled more than 24hr from check-in. Expedia has removed all nonrefundable rates from their channels. Double check this is the case at your hotel and look at closing other nonrefundable rate programs or changing their policy. If all other hotels are offering this, and you are not, you will be at a disadvantage.
3. Rescheduled events: All those big demand drivers have either canceled all together or rescheduled for a later date. Stay tuned for any events rescheduling to ensure appropriate strategy. In event-driven markets there will likely be Q3 and Q4 dates with multiple overlapping rescheduled events from Q1-Q2.
4. Qualified discounts/consortias: Everyone’s first instinct is to drop rate, and while many hotels have already resorted to this strategy, also consider loading more aggressive discounts to your qualified discounts (such as AAA,AARP) to capture qualified business with a more dynamic strategy. In some cases, hotels are even offering travel agents and consortias elevated commissions (15-20%) during these periods to entice bookings at their hotel.