Six Strategies to Help Hotel Revenue Managers Amidst the Covid-19 Outbreak.

Mar 11, 2020 | Revenue Management

There’s no denying we are in difficult and uncertain time however we have been here before in 2003 during the SARS outbreak and in 2009 during the Avian flu epidemic. We recovered from both of those events and with the proper procedures in place we can recover from this latest crisis.

Looking at all of the data we’ve collected so far we can see that trends are happening across the regions. We can see some areas have been affected quite badly already, while other areas are yet to be affected. For those hotels in the middle of the crisis and those awaiting to see what tomorrow brings, we want to provide you with some strategies that will help.

1. Don’t panic

  • We need to realise that panicking leads to rash decisions which can cause longer term problems.
  • Look at your benchmarking reports and competitor data and be confident what is happening in your hotel is happening locally and within the local norms.
  • Analysing your data and reforecasting can help you plan better. Better planning means better decision making on pricing, staffing, marketing, cash flow, etc.

2. Decisions should be made for the short term only

  • Expect your book window to shorten dramatically.
  • Put a realistic end date on any changes to strategy. Don’t throw your long-term sales and revenue strategy out the window.
  • Whatever you decide to do should be short term and reviewed regularly. Don’t do anything that could negatively affect your property in the long term.
  • Analyse your own data in more detail, what market segments are shifting, this will help you focus on the facts and proper decisions can be made.
  • Assume in the short term that local events will be cancelled, overbook if possible.
  • Review your digital marketing campaigns and focus on domestic leisure and past guests.
  • Use your website to provide reassurance to customers that all the necessary precautions are in place.

3. Help your customers

  • Consider relaxing your cancellation policies (in the short term) to help your customers. See here Aer Lingus’ policy to waive change fees to give passengers peace of mind.
  • Reach out to your corporate booking houses, booking agents and operators and open the dialogue on relaxing policies (in the short term) while we navigate these unchartered waters.
  • If events and weddings in your hotel are under threat work with your customers to postpone and move them to future dates, negotiating new terms if warranted.
  • Advise your customers what steps you have in place by making a statement on your website and social media platforms. A good example from Prem Hospitality.

4. Hold your rate

  • Rate dumping is not going to drive demand. From history we know that rate dumping hurts in the long term and can take many years to turn around.
  • People are making travel decisions based on other factors; Rate is factor two, but first and foremost people are asking, Is it safe?,  Is the location that I’m going to safe?,  How do I get there?,  Do I have to fly through a major airport? “Travellers will put their safety first” says Jan D. Freitag, SVP of Lodging Insights.
  • If you do need to decrease your rate make sure you ring fence it, target it at specific markets and above all else protect your brand.
  • Booking pace is down in most areas so expect the bookings that do come will be last minute, as everyone has adapted a “wait and see” attitude.
  • Focus in on the Domestic Market and Staycations, get your packages loaded and engage your digital team on getting the message out there.
  • And remember…. Rate dumping may bring you new clients but are they the right clients for your hotel?

5. Information is key!

  • Inform your team of their responsibilities during this time of uncertainty.
  • Training and retraining is important.
  • Listen to the experts and start following some key industry sites for news and industry stats.
  • Analyse your own data and make informed decisions and not rash ones!
  • Take instruction from the HSE and WHO.

6. Planning ahead

  • Make sure you have all your Summer packages open and bookable.
  • Expect customers to travel both domestically and from overseas later this year, we know from history (SARS) our market can bounce back quickly.
  • Remember not to discount the rate, offer incentives to book direct such as detailing local attractions, remind your customers of your hotel and the local areas USP’s.