Crisis mitigation: Gain control of your hotel back

The occupancy rates are down, hotels are experiencing a dip, and big group travels are being cancelled. The hotel industry is always vulnerable, as its business is largely subject to tourism development and the number of tourist arrivals.

We’ve been through things like this before, except the media coverage wasn’t so extensive and panic-inducing. Where is the swine flu, SARS or H1N1 now and how did hotelier deal during those outbreaks? Remember, websites often implement a pay-per-click rule, therefore spreading hysteria is beneficial for them.

Focus on the short term solutions, but keep your long term goals and plans in mind! Don’t rush into something that might hurt your business later on.

Recessions are natural in economic cycles, however, and investing during a recession is an old ‘trick’ to make it through to the recovery period. 

Our tips to stay on top of your business

• Stay flexible, give your guests what they ask for and provide an easy way for them to cancel their booking.
• Don’t lower your rates too much, it will hurt your business. Focus on your extras and add-ons to make their stay better and exciting, and to encourage them not to cancel but reschedule where possible. (eg: Mother’s Day is coming up!) As Sherri Kimes, revenue management expert, puts it: “While the pressure to reduce rates is understandable, hotels should exercise caution in manipulating rates because of the potential negative long-term effects on profitability and the hotel’s image.”
• Try new technologies. This is exactly the right time to invest and implement things that can potentially strengthen your presence on the market. You can still conduct business through the internet, e-mail, video conferencing, telephone and by other means.
• Maintain high employee morale: Keep them enthusiastic and happy so your quality of service does not suffer. Keep all your employees informed about your decisions.
• Invite your local community: Domestic travel could also provide you with revenue.

• A question – or rather food for thought: In terms of crisis which business will come out on top: the one that shuts down investment and lowers rates, or the one that invests, tries out new solutions, and keeps on functioning?

• Create strategic partnerships – especially with your distribution channels (travel agents, OTAs, they might be willing to share a higher proportion of their business to you)
• Focus on your loyalty program: Send out a newsletter to them, offer rewards or reduce the number of nights needed for a free stay. This will keep your loyal guests connected and encourage them to spend more in other outlets. Acquiring new customers can cost so much more, cut the coin on attracting new people and invest in your existing customers or domestic market.
• Stop cutting costs! It will hurt customer satisfaction and the quality of the service. “Don’t reduce standards but add added value; guests are very sensitive to changes. Bad time is not forever and it could take a longer time to recover if you cut corners to save a buck!”
• Keep your guests healthy. Take a look at how this Hong Kong-based hotel is informing guests.
• If there is nothing else to do, and you have free time on your hands then train your staff, refurbish, or deal with those issues you have been putting on hold. Try to implement new technology and improve your hotel.

We hope these tips help you, let us know how you are coping and how is the current situation at your location!