Laura, Bill, and Adam discuss strategies for hotels to combat the COVID-19 Outbreak through RevGEN’s 5-step action plan normally used to mitigate losses for struggling hotels.
Laura: We’re trying to mitigate our losses as much as we can. We’ve always had this thing called low-demand checklist at Kriya RevGEN and we use it whenever we have a property that’s struggling for whatever reason and so we’re kind of applying what we’ve learned from the low-demand checklist to all of our hotels because pretty much even though we’ve got some suburban hotels, we haven’t seen the losses just yet- I think it’s coming- so, I’ll let Adam talk about some of the things we’ll be doing at the properties.
Adam: So 5 or 6 big things here that we’re focusing on: the first thing is you kinda have to know your market, know your hotel. Especially with international travel being affected probably the most with coronavirus, knowing how much your business makes with international travel versus domestic is really important. So, really looking at the OTA extranets, they usually have a breakdown of what percent of your bookings come from China versus Italy and so on. So looking at that can be very helpful and kind of gives you an idea of what we need to replace.
The brands also have a lot of good initiatives they’re ruling out right now- obviously, there’s been a lot of discussion about the leniency of the cancellation policies. There’s also some things you can do to drive business directly over these low-demand periods, like point-packages; Hilton is doing-
Laura: Hilton’s Week of Sales. They’re ruling it out next week to drive local and sales traffic. So just pay attention to any way the brands can help you get business.
Adam: The third is digital marketing, which I’ll let Laura speak on.
Laura: Of course a lot of hotels aren’t going to want to spend money right now, but if there’s very few people booking, you’re going to want to get any exposure you can. Through digital marketing efforts, through Expedia travel ads, through Google hotel ads, through even things like Adwords. There’s many platforms now that make it very easy to run things like that: search and display ads, banner ads, things like that. So, really take a closer look at your marketing budget and see if there’s any way you can start funding these campaigns so that you can get to the top of the page, because if there’s anyone booking, you want them to book your hotel and not a competitor’s. And also, just make sure your online presence looks good. Like, don’t lose guests just because you have bad photos or things like that.
Bill: Also might be a time to maybe try accelerators or overrides just to get higher placement. I think right now it’s just going to be about heads in beds.
Adam: The fourth thing is more about your rate strategy. I think the first instinct everyone has in times like these is to just slash your rates, which is really easy for revenue managers to do, I think from what we’ve learned in the past instances like this, with 9-11, 2008 crashes, it’s a lot harder to increase your ADR-
Bill: Were you alive?
Adam: I was alive during the crashes.
Bill: Just checking.
Laura: Were you alive, Bill- you’re not much older! Just kidding.
Adam: I read an article that says it takes twice as long to increase your ADR than it takes to reduce it, so…
Laura: And everyone, it’s going to be a race to the bottom, so don’t leave the pack.
Bill: Someone’s going to ruin your market, but let someone else do it.
Adam: What we’re recommending is to hold your bar rates as best as you can, and do a lot of fenced discounting. Fenced discounting, meaning like an overnight sale. That’s something we’re trying… with the hotels I work with, the promotions are only applicable from 9PM to 5AM, so you can sneak under the competition a little bit, and drive some business. There’s also some things you can do with member programs, genius through booking.com, expedia, something similar… Hotel Tonight, that’s a pretty fenched channel looking at geo rates. I’ll mention the package path, bundling the room with air, carbs, something like that.
Bill: Except no one’s flying- you can give it a try. Maybe they’re packaging hotel and car, you know.
Bill: Point number 5 is a mix of revenue management in sales and we’re saying you should focus on backyard accounts. So, a lot of the large groups, conventions, you can forget about in the next couple of months. Also, major corporations, I think, A, for public safety but also legal concerns, a lot of these major corporations have put travel bans in effect, at least until the end of March. So you’re not going to get the IBMs, the JP Morgans of the world, you need to focus on the smaller corporations in your backyard that are maybe driving to your hotel as opposed to flying or doing some local work like projects in your area, trucking companies-
Laura: Government business even, I mean like military rather than…
Bill: From a group standpoint, you’re not going to see large groups, but maybe you’ll see baseball teams, so try to focus your attention on that. So these are our tips.
Laura: Wash your hands!
Bill: Wash your hands, stay calm, hopefully in a month we’ll have more exciting news and be back to revenue growth.
Laura: Yeah, stay calm.
Bill: Thank you.
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