After a long and dark year of unprecedented challenges, continuing vaccine rollouts and declining COVID numbers finally bring into view a much-needed light at the end of the pandemic tunnel. For a hospitality industry that has taken a devastating hit, the fact that the prospect of a post-pandemic world finally seems to be in reach is incredibly heartening news.
For now, however, that light remains just out of reach. No matter how much excitement hotel owners and operators might feel, the fact is that the uncertainty surrounding when things will start to get back to normal—along with persistently low travel numbers—means that, outside of a few select-service and resort properties, most hotels are still running on fumes. Ironically, it is precisely this moment—when the numbers are still low but the promise of dramatic improvement looms in the not-too-distant future—that meticulous, diligent, and sophisticated revenue management strategies become more important than ever.
Like anything else, of course, improving revenue management capabilities requires resources—resources that not every hotel owner feels able to dedicate during these lean times. But the reality is that investing in your revenue management performance is one of the smartest and most cost-effective investments you can make. And with the industry poised for a turnaround, there’s a strong argument to be made that you can’t afford not to.
Here’s why—and how—your revenue management needs to be a priority in the weeks and months ahead.
A revenue management department isn’t something that can be turned on and off like a light switch. Programs and personnel take time to have an effect, lines of communication need to be established and maintained, and the lag time between resource allocation and ROI can be significant. In this moment, with the entire industry ready to vent its pent-up energy in a frantic race back to normal, a sluggish start relative to the competition could have a lasting negative impact.
How to Make It Happen
What follows are some specific pieces of the revenue management puzzle that hoteliers should be putting in place right now.
With so many critical personnel furloughed or laid off, there is a talent-gap that hotel owners and operators can ill afford to let linger. A rapid staffing increase will be chaotic and will inevitably lead to the kind of seemingly small errors that can have a big impact on the bottom line. One minor mistake in standard rate-loading procedures that prompts a prospective guest or booking agent to look elsewhere can be damaging. Those are the kind of details that need to be addressed now to ensure that hotels don’t miss that critical first wave of new business as health restrictions loosen and a travel-hungry populace begins to get back out there.
Let’s Get Digital
While it’s understandable that hotel properties rolled back their e-commerce programs and digital marketing campaigns as part of overall belt-tightening, the time to reinvest those digital dollars is now. This is an area of a revenue management department that takes time to have a real impact, and it’s a mistake to think one can wait until things are “back to normal” to reinvest. For now, keeping a modest investment in critical areas like keyword searching is the bare minimum to ensure that a digital program doesn’t languish, and owners and operators should strongly consider additional strategic digital spending going forward.
Get It on the Books
If sales managers aren’t deployed at a property right now, that’s a mistake. Getting future business on the books is enormously valuable, regardless of the specific post-pandemic timeline. Groups are shifting to later in the year as well as booking 2022 and beyond—not having a dedicated sales team focused on improving these pace numbers could be detrimental to a hotel.
Smart and Strategic
All hotel owners and operators are wrestling with the same conundrum—they recognize the need to invest in revenue management, but they feel like don’t have the dollars to make it happen. But the reality is that scarce resources actually make smarter and more strategic—even surgical—revenue management more important, not less. In a limited-resources reality, understanding what segments will be back first is vital. Hard-hit hotels cannot afford to spend a penny on prospects who aren’t coming. They need access to the kind of expertise that translates plans into specific daily execution (like strategic rate flexing at a granular level that can organically boost ADR and steal targeted occupancy share) as part of a relentless drive to capture every possible dollar.
When you see the light at the end of the tunnel, you know it’s time to start running—we all want to be first out of this recovery.