In our ‘Rebound after the Coronavirus Crisis’ series, we’re sharing tips on how to rebound once the symptoms of the crisis pass and events return to normal. It includes moving beyond crisis response to recovery and post-recovery planning.
In the first article of this series, we shared tips on how to create a hotel distribution recovery strategy, and in the second one, we talked about the digital hotel tools you need for a quick and smooth recovery. In this article, let’s explore the essentials of an effective hotel revenue management recovery strategy to ensure a quick and smooth rebound after the crisis:
Don’t cut rates intensely
Hotels usually slash room rates when occupancy drops to spur demand and achieve maximum occupancy. It’s natural for you to consider this tactic this time as well. But be aware that price isn’t a factor why you have low or no reservations during the coronavirus crisis. In fact, studies have shown that hotels that drop their rates deeply and quickly can be the last one to recover when demand comes back.
So, avoid the knee-jerk reaction of taking desperate measures and lowering room rates too deeply right now or for the near future. Instead, maintain your pricing power to avoid adverse financial consequences on your future profits. A good strategy is to keep current and future rates at a normal level and promote offers or freebies for domestic travelers. It’ll make it easier for you to resume business when the market bounces back.
Offer relaxed modification policies
We’ve seen how hotels around the world have relaxed their modification policies or waived their cancellation fees to foster long-term relationships with travelers. And you should do something similar too.
If the impact of high cancellation volumes is too much for you, consider offering flexible rebooking policies or giving vouchers to your guests. This includes waiving change penalties and allowing guests to postpone their stay free of charge.
Make sure you have a clear marketing message of “flexible rates”, “free cancellation, or “book now, cancel later” offers on your website, social media, all booking channels, and metasearch sites, like trivago. For example, you can now give travelers the confidence to book with you through trivago with the Special Offer tag of Free Cancellation.
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Focus on your local market
Domestic travel is expected to rise as soon as travel restrictions are lifted or made less limiting. So, hotels should target local travelers and rely on the local market to replace lost business. Click here to find out how you can adapt your marketing spend during a crisis.
Soft sell your local hotel solutions, like small meeting spaces, private rooms, suites, or private sauna/spa facilities. Staycations have also proved to be a winner in the midst of coronavirus. Thus, if you can turn your property into a staycation destination, it’s going to attract a lot of local travelers. For this, consider offering local food options right from your kitchen or popular eateries in your neighborhood, organizing your own events like live music, welcoming pets, providing free parking spots, and promoting kids-friendly and family activities.
Diversify your revenue streams
A multi-revenue income stream will help you confidently navigate through the crisis. Let’s see how you can ensure more business and expand your income with existing resources.
First of all, it’s important to establish a healthy distribution mix, including both direct and indirect channels. This will help you gain more varied reservations and enable you to bounce back easily. These channels are direct website along with a booking engine, metasearch sites, and online travel agencies. Click here to find out tips on how to create a diversified distribution during a crisis.
In addition, there are plenty of ways you can get creative with your income streams. For example, if you’ve got an on-site restaurant and/or kitchen, use it for making online food deliveries, or promote your spa or sauna to offer a detox retreat to travelers.
Keep checking this space to find out more useful content around recovery and post-recovery planning to stay ahead of the competition and bounce back quickly.
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