News for the Hospitality Executive |
by Dr.
John
Hogan, CHE, CHA, CMHS
November 4, 2011 When we were children, the seasons were defined by holidays, the school calendar, family events and to some degree the weather. Now that we are adults, we see many variations of seasons. As hoteliers, we still see the holidays and the changes in weather, but we need to look at calendars and factors that affect demand much more closely. School calendars have changed dramatically, with year-round attendance in some locations and major shifts in the beginning and end of the school year in others. Semesters at high schools and universities can vary, as do spring and winter breaks. Researching where our destinations’ clients come from is an incredibly important and often overlooked planning action on the part of many hotels. Working with provincial/state tourism boards can be beneficial, as is collaborating with the more local conventions and visitors’ bureaus. If you are part of a brand or referral group, explore the options on target advertising, group blitzes or other specialized and focused co-operative marketing efforts. Regardless of where your hotel is located or its size, we all know we have some variables of demand. For some of us, it is by day of the week, while others have higher or lower demand for months at a time. Creating a plan to effectively deal with those variables need not be overwhelming, but it does require some focused attention by the general manager, the person responsible for sales (which may be the GM) and the front desk staff. Creating a plan means regularly examining trends on forecasts and anticipating changes in those demand trends. Maximizing Revenues does not automatically mean raising prices, but means reacting to the market, to your competitors to some degree and to the uniqueness of your hotel’s clientele. A natural tendency when demand fluctuates is to consider discounting or lowering prices. Discounting is only effective if that discount will specifically increase demand, yet we see so often that rate wars are created without rationale. Most markets have some kind of seasonal demand. When it is off-season, some rates naturally tend to drop due to lower demand. A proven practice even in off-season is to maintain some high rates because rate alone is not the only driver of business to our hotels. Customers choose hotels partially because of price, but also because of location, brand preference, previous positive experience or simply availability. Maintaining higher rack rates also allows you the option of some discounting percentages from the higher rates, achieving better REVPAR and operating results. The following are tips to maximize revenues in periods of lower demand or weaker shoulder seasons: Low Demand Tactics Sell the value/benefits
Feel free to share an idea for a column at [email protected] anytime or contact me regarding consulting, customized workshops, speaking engagements … And remember – we all need a regular dose of common sense. John Hogan is a successful hospitality executive, educator, author and consultant and is a frequent keynote speaker and seminar leader at many hospitality industry events. He is Co-Founder of www.HospitalityEducators.com , which delivers focused and affordable counsel in solving specific challenges facing hospitality today. Consulting Expertise and Research Interest 1.
Turn-around and
revenue management
2. Professional Development for the Organization and the Individual 3. Customer Service 4. Making Cultural Diversity Real 5. Developing Academic Hospitality programs 6. Medical Lodging Consulting 7. Sales Management and training www.HospitalityEducators.com is a membership site offering a wide range of information, forms, best practices and ideas designed to help individual hoteliers and hospitality businesses improve their market penetration, deliver service excellence and increase their profitability. www.HoganHospitality.com Your Hospitality Resource for the Hotel Owner, Innkeeper, Manager and Hospitality Industry Associations. |
Contact: John Hogan, CHE CHA CMHS United States - Phoenix, Phone: 602-799-5375 www.hoganhospitality.com [email protected] http://www.linkedin.com/in/drjohnhoganchache
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