By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
Consider this your quarterly performance audit, but thinking a bit more ambitiously, it is already time to look ahead to 2018! Now that we have gone through three whole months of 2017, it’s the perfect time to reevaluate the goal we proclaimed at the beginning of January, but there’s also enough time to plan something bold for next year.
A major issue that many hotels confront is the cyclical nature of their revenues and occupancies. Although seasonality affects resorts and rural properties more so than urban hotels, the latter can also suffer from week-to-week or intra-week fluctuations due to their targeting of primarily the corporate and groups segment.
Even though most of these suggestions pertain to the leisure segment where the highs and lows are more pronounced, making weekend traffic at business-catering urban hotels should still be a foremost initiative. In fact, regardless of your particular situation and however much your occupancy vacillates, there is room for improvement if you address the issues now instead of waiting for the next ball drop in December. Real and healthy change takes time, and you will need a full nine months to set up these new, viable programs.
The first step is to embrace the offseason and be transparent about it with any offers you present to customers. That is, most savvy consumers will already be primed to expect, for instance, seaside properties or ski resorts to be relatively quiet during their respective off-seasons. However, these same consumers may not immediately recognize that this nadir of occupancy means incredible savings for them and interrupted access to all the hotel amenities and facilities because of the lack of crowd.
Advertise incredible deals is not enough, though, especially if these loss leader rates are going to cut into your margins. There has to be a hook. During peak season, this comes easy – it’s the beach, that perfectly manicured golf course or hitting the freshly powdered slopes. But when those physical draws are inaccessible, you have to rely on ‘softer’ promotions, boosting ancillary features and giving them extra attention so that they can help sell. No matter what discount you offer, if there isn’t an attraction – something entertaining for guests to do while onsite – then you won’t sell many rooms.
Food and beverage programs are always a good way to garner attention because no matter the weather outside, people have to eat! This is doubly true now that the foodies and locavore movement have become widespread with many people always on the lookout for innovative and unique culinary expressions. If you know that you will be experiencing some downtime in occupancy within the next year, you can plan a large-scale food event set over the course of a few days or even with some repetition to accommodate multiple groups. Beyond such extravaganzas, wielding F&B to generate interest in the offseason can also mean subtler tactics like weekly specials, vendor sponsorships, extended happy hours or low key tasting events.
The next lowest hanging fruit is to target your past guests or your loyalty program members. After all, these are consumers who are already primed to receive your messages and will thus be more receptive to take you up on a special promotion or exclusive discount, even if it is for a less desirable period. Reward redemptions can work even better, though, when combined with, again, some form of entertainment. Just because they’re loyal doesn’t mean they won’t allow want something to make their experience memorable. Moreover, if you offer them just a heavily discounted room and nothing else, then it may be rejected or, worse, turn them off completely because they won’t perceive any value from long-term loyalty.
Thirdly, and bridging the gap between leisure and business, look for ways to draw in groups during your offseason. To do this, you’ll need a good sales team but also a solid activities program to occupy a corporate retreat or any other crowd in between sessions and meals. After all, when it comes to meetings and conferences, most hotels already have the basics covered insofar as good audio-video support, configurable rooms and acceptable F&B, so how are you going to convince an event planner to select your property over the competition? The answer is in what entertainment you offer that is unique to your particular location and what you do to neatly package these experiences.
Fourth and finally, look to boomers who are currently reaching retirement in droves and with a healthy surplus of funds specifically designated for vacationing now that the work life has subsided. This demographic is far less constrained by when they are able to travel and will be much more receptive to offers that not only promise a good deal but also a unique experience in a less-than-pure-chaos environment afforded to visitors in the off-peak months.
Above all, the emphasis is that you start now towards the grand objective of eliminating the offseason entirely. If you are already planning the packaging, events and seasonal promotions for 2018, then you should be able to create and hone specific programs that will ensure that all downtimes are reduced or not eliminated altogether.
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Editor’s note: To discuss business challenges or to discuss speaking engagements please contact Larry directly.
