The worst thing to do is to do nothing

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Dear hoteliers, Today, I’m sharing an article with you that is a lot like what I usually do, but very different in form. I will give you ten very practical tips for improving your marketing, but I’m doing it, not as a charitable gesture, but more as a way of ranting and raving because, frankly, […]
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Dear hoteliers,

Today, I’m sharing an article with you that is a lot like what I usually do, but very different in form. I will give you ten very practical tips for improving your marketing, but I’m doing it, not as a charitable gesture, but more as a way of ranting and raving because, frankly, I’m fed up.

I’ve personally spoken with hundreds of hoteliers since the start of the pandemic. On top of that, more than 800 contacted us in 2020 for information about our CRM. I’ve had long conversations, on many occasions, with some of the most brilliant hosts I know.

Through these hundreds of hours of exchanges, over the course of several months, I’ve been able to identify two main categories of hoteliers:

Positive-thinkers who see the pandemic as a disaster, but also as an opportunity to spearhead new initiatives and try new solutions;Defeatists who have fallen into despair and gone into standby mode while they wait for things to return to normal on their own.

The positive-thinkers have understood everything. The defeatists don’t realize that their attitude will be their downfall, much more than the current crisis.

Happy reading!

Well, that’s a shocking title! But it will finally get the message across once and for all:

By being defeatist, marketing gets put on hold, and the hotelier speeds the business toward certain bankruptcy.

Defeatists may sometimes try to avoid an immediate bankruptcy, but in reality, they’ve set course on a mad rush toward inevitable bankruptcy in the future. Let’s do the math!

Out of the thousand hotels I work with today, about 30% are open for business at the time of writing (early February 2021). Because my clients are all over the world, I’ll assume that this 30% figure reflects an average of the hotels that are open worldwide. (Even if this figure does not seem right in your region, the theory I’m about to present to you still applies, and you will be able to adapt it easily yourself.)

Out of 100 hotels, 70 are closed. The 30 that are open have an occupancy rate of about 50%. This means that, in this hypothetical region with 100 hotels, there are enough guests right now to fill about 15 hotels at full occupancy.

The defeatist is undoubtedly one of the 85 hotels that are closed, and fortunately, there are no expenses… or are there? Such a hotelier is actually operating with a short-term vision. Yet, looking forward, it’s clear that things won’t happen easily, and surely not miraculously.

All current indicators tend to show that, even if international lockdowns and restrictions come to an end, governments get back to work, business and personal travel resumes, and everyone is vaccinated, by some miracle or divine intervention, things won’t immediately go back to how they were.

A much more plausible outcome is that hotel activity will slowly return, bit by bit, in the first few months and will be “excellent” again in one or two years.

Continuing with my example, let’s imagine that all of the above factors magically become true on April 1, 2021. Here we go! The region’s 100 hotels reopen. But, slight problem… guests don’t all reappear all at once. Only three times more guests come back in April. The others come back, little by little, over the following months and years.

Three times more guests = enough to fill about 45 hotels in our hypothetical region. So, what happens, since all 100 hotels reopened at the same time?

Option #1: Hotels will lower their prices to compete for customers. Outcome: Some hotels will barely make a profit, but their occupancy rate won’t be enough to cover their expenses. End result: Certain death of their business.

Option #2: Some hoteliers will decide that it’s not worth it and close their hotel again. But I doubt that the government will continue to help hoteliers financially if the Covid-19 pandemic is behind us. End result: Certain death of their business.

The future doesn’t look so bright after all, does it? At least not for everyone!

Again, it’s only hypothetical that 45% of hotels will have enough guests when things go back to normal. Adapt all this to your region after performing this calculation.

But what differentiates the 45% of hotels with guests from the 55% with virtually none?

There’s no magical ingredient. No! The winners will mainly be the hoteliers who best prepared for the recovery. They won’t be the ones who stopped everything when they were closed. They will be the ones who cut out the extras and keep the most essential: the tools most likely to generate revenue.

As for the the others, the defeatists who slashed their budgets, they’ll have to start marketing, bit by bit, when they reopen. This means:

reconnecting the PMS to their CRMrelaunching their AdWords campaignsasking their MR company to calculate their future pricesset up an email campaign to announce the reopening to their customersand so on, and so on, and so on!

All necessary actions that will take lots of time. And this time, you absolutely won’t have time to spare!

The first hotels to welcome travelers will also be the first ones to get reviews on TripAdvisor, Booking, and Expedia. The hotels with more reviews will move up in the rankings, well above the defeatists, and they’ll enjoy all the rewards that go along with that.

Meanwhile, struggling hotels will have to lower their prices in an attempt to be more visible. But by lowering their prices, they will attract a different clientele than they’re accustomed to having, guests who complain much more than their usual customers. That means that they won’t have good reviews… and the downward spiral begins. End result: Certain death of their business.

In contrast, the 45% of hotels that will recover quickly when the pandemic ends are those who have kept up their marketing throughout the entire time they were closed or in limited operation. I’m not talking about spending hundreds of thousands of euros on marketing, but rather the strict minimum needed to:

Maintain your online presence.Communicate regularly with your customers.Set up new sources of visibility (distributors, GDS, occupancy rate, travel agencies, corporations, etc.).

Those who have spent a little money to accomplish these three things will be the ones with a real future in the hotel industry.

During a webinar I gave with Marc Merzourg, Benjamin Devisme, and Marce Schlotterbeck, one of them said the above statement to me. I found this to be the perfect analogy for right now.

Here is a link to the recording of the webinar, if you’d like to watch it:

LINK TO THE RECORDING (french only)

Just because you can’t see the future doesn’t mean that you can’t put in the work today to prepare for it.

For the second half of this article, I’d like to discuss the results of a survey of more than 600 hotels worldwide, as well as some very good ideas that some of your fellow hoteliers have shared with me.

The timeless package

Create a package with a very attractive discount and no booking dates Example:

“Book our romantic package: one weekend in our suite with access to the spa and a candlelight dinner served in your room. Buy it today at a 50% savings and use it anytime in the next two years.”

By doing this, you are communicating with your customers, planting the idea of a lovely romantic weekend, and collecting a little revenue (at least enough to cover the marketing costs for the actions I listed above).

This idea works for any type of package and customer.

Super flexible terms

This is sooo important! You need to adapt to what your new customers expect and their uncertainty about the future. This topic is covered in depth in this blog post: https://blog.experience-hotel.com/cancellation-policies-for-direct-bookings-versus-booking-com/

OTA post-cancellation

I’ve only seen one hotelier use this technique… IT’S ABSOLUTELY GENIUS (but very time-consuming)!

As soon as a customer cancels on Booking, go to their record to find their phone number, and then send them a WhatsApp message to tell them that your cancellation policy is super flexible if they book through you directly. Mention that they don’t need to worry if there are new lockdowns or border closures.

The hotelier who used this method was able to recover an impressive number of guests by offering this reassurance.

Vouchers or credits

Minimize cancellations as much as possible. Think ahead and offer credits to your customers before they cancel.

Send them an email to let them know that, if they are ever in a region where the borders are closed again, you can convert their reservation into a credit that is valid for two years.

Don’t wait for them to request a cancellation! Take the lead and steer them to another solution.

Being open in a hyper-competitive market

Look at the number of hotels that are open near you. If there are none or only a few, open your hotel immediately! That way, you can get all the reservations from people who need to come to your area.

Sure, it may not be enough to cover all your costs, but think about the number of guests you can potentially turn into return customers, which would create a better future for your hotel.

Corporate clients

Obviously, 2021 will focus more on corporate bookings than on tourism. This means that you need to start contacting all the companies and organizations around your hotel today.

VERY long stays

Some hotels have created deals for stays lasting one or two months. They’ve attracted a clientele who need a place to stay, but don’t want to go to an Airbnb rental.

Long stays sold on Airbnb

And yes, hotels with these kinds of deals are also available on Airbnb, where customers tend to look for very, very long stays. You can also market these deals on traditional OTAs. Grab the gold ring and list your hotel on Airbnb!

F&B

In the hotel business, F&B often refers to the hotel restaurant. But some hoteliers take it much further:

Breakfast served in the roomPackaged offer with local restaurants (delivery or takeout, of course)Converting a room into a private room for a romantic dinerOffering convenience meals in the hotel (refrigerated foods, microwavable meals, etc.). These are often already available in hotels, but how many of them talk about them?

Local guests

Yes, there has been a lot of talk about local guests since the start of this pandemic. But this is so effective at generating revenue that I’d like to mention it again so it won’t be forgotten. Again, this technique involves contacting people who live near your hotel and are likely to stay at your hotel for a little change of scenery.

Privatization

And last but not least, here’s a surprising little idea that is easy for a small hotel to pull off… Close your hotel to the general public to host private parties, another angle of attack to try bringing in some revenue. Some hotels have been very successful with this innovation.

Obviously, this depends on the laws in effect in your country.

Nobody has all the answers about what the future holds or how to make everything go back to normal overnight. There are also a lot of external factors and variables to take into account.

That said… Nothing is impossible!

As hoteliers, you have several systems and tips at your disposal to generate revenue as business comes back. But keep in mind that leaving your marketing on standby is synonymous with much bigger problems in the near future.

In summary:

Figure out the budget you need to start or continue your marketing efforts.Try a few of the ideas above and/or come up with new ideas for generating enough revenue for you to 1) cover your marketing costs and 2) cover the operating costs associated with the actions you take.Get back to marketing NOW!

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Dear hoteliers, Today, I’m sharing an article with you that is a lot like what I usually do, but very different in form. I will give you ten very practical tips for improving your marketing, but I’m doing it, not as a charitable gesture, but more as a way of ranting and raving because, frankly, […]
The post The worst thing to do is to do nothing appeared first on Marketing Tips for Hoteliers.

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