Strategies to help demand in low season periods

By Chris de Closey, Director of Switch Hotel Solutions.

We’ve all been there. The dreaded low season is coming, and we are waiting for the inevitable lull that comes during this time.

We know it happens each and every year, so we prepare ourselves to do the usual, the big spring clean of the apartments or book that much needed holiday. But what if it doesn’t need to be like that?

What if you could have some additional bookings in there to help drive the revenue through? Yeah – we might not fill up, but anything extra can help (and keep owners/investors happy if you are in a management rights business!)

There are always strategies that can be implemented to help drive additional demand through these periods. Some are easy, some take a little more work – however, the ultimate goal is simple – we want to make more money.

Dynamic pricing

I was recently at the NoVacancy Hotel and Accommodation Industry Expo and had some amazing conversations with a wide variety of operators from all over Australia and New Zealand. The biggest thing that shocked me was that there are still so many operators not utilising dynamic pricing.

They think it is either too hard or are worried about what guests will think! They worry that guests will sit around the pool and have conversations about how much their stay cost them, comparing notes and then complaining if someone has got a cheaper deal than them.

The thing is, they likely will. But as with any business, the time you book determines the price. People don’t call Qantas if they pay more than their mate who booked three weeks before them. We need to ensure that we are using the same analogy in our accommodation space as well.

Implement dynamic pricing into your business, and get your pricing moving DAILY. Whether it be up or down, dynamic pricing will help to optimise your occupancy rates as well as your overall revenue.

Reducing your pricing through low season periods to your minimums will help to drive additional bookings coming in. Yes the rate will be lower, but this is a simple way to capture demand.

Extended length of stay discounts

Getting a guest in for a longer stay is a great way to drive a higher occupancy rate for the business. Look at implementing a discount for a longer stay with tiering pricing. For example, you might choose to give a guest 10 percent off for five days, 20 percent off for seven days or 35 percent off for a month.

While the net ADR will be reduced, the expenses will also come down (less cleaning, servicing etc.). The guest is incentivised to stay for longer and enjoy an extended break. It also can help you to target potential customers who may be relocating to the region or in between rentals or homes. Having a competitive price for longer stays will open you to this new clientele in the slower periods who might have been previously deterred by higher prices.

Early booking discounts

Incentivise guests to book in advance! You might choose to offer a guest a 30 percent discount but they have to book a non-refundable rate. This will help to create some predictable revenue and help to forecast how the month will pan out.

Just ensure you remember that non-refundable is exactly what it means. You will have to have hard conversations on the fact you won’t refund guests if they are sick or can’t travel. You can always include a recommendation for travel insurance when booking these rates.

Seasonal packages

Put together a package for your low season period, pairing a strong rate with a special offer to target specific markets. This will help to attract niche markets and capitalise on the seasonal demand. If you are going to do this, make sure the package is for your target audience. Don’t put together a package designed for families if your rooms are one-bedroom apartments.

Low-demand periods will always come. We know when it is going to occur, and we are always nervously looking towards these periods for the usual slow down. But it doesn’t have to be like that. Start putting together strategies well in advance – if you know it’s going to be soft make the adjustments for these periods now rather than sitting on your hands and waiting for it to come by. Unless you are wanting to shut up shop for that holiday, make the changes now and test, trial and implement these to help grow your business.

Article first published in Resort News print magazine – Read it HERE

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