by Brenda Fields, August 4, 2008
Key markets, world wide have experience unprecedented occupancies, average
rates, and RevPAR for over a decade. New York City and London in particular
have experienced average occupancies well over 80% for the past several
years, driving record average rates and RevPARs.
The immediate outlook remains promising but the future is less bright
according to prominent analysts i.e. PricewaterhouseCooper and Smith Travel
Research. One school of thought is �If it ain�t broke, why fix it?�. But
we know that the hotel industry is driven by various economic factors that
create many ups and down. The bad times don�t last forever and the good
times don�t last forever, either. So what better time to address any weaknesses
in the organization, flaws in the system, or product deficiencies, than
when occupancies are strong and the outlook is favorable?
The return on investment on ensuring high standards in all areas is
far greater than the cost of a major upgrade and marketing expenses to
bring customers back after their bad experiences in your property.
This article will address the benefit of early prevention and will identify
areas to evaluate in order to ensure that your property is well positioned
for any downturn so that it will remain profitable and vibrant.
Physical Condition:
Continuous periods of high occupancy create lots of wear and tear on
a property and taking rooms out of inventory for maintenance and deep cleaning
is most likely not an option to most owners or managers when demand is
high. During these feast periods, guests will pay the going rates just
to have a room and will accept it in almost any condition rather than forgo
the business trip or family holiday. But, once occupancies start to fall
the tide will turn and hotels will experience a �Buyer�s Market�. Those
properties that had noisy air conditioners, stained carpets, or slow shower
drains, will find themselves eventually making the investment to be competitive
in the new business environment. So why wait when we all know that �A stitch
in time saves nine�.? A minimal investment now and minimal loss of revenues
will more than be made up by having a loyal customer base, which will stay
with you with the market turns.
Technology
Technology advancements have allowed property�s greater ease and efficiency
in dealing with customers in areas such as making reservations, sending
out confirmations, and preparing the invoice upon check out, just to name
a few. We know, too, that maintaining the latest equipment is a major expense.
The days of telephone as a line item on the P & L Statement are long
gone, as now, free domestic phone calls in guest rooms are becoming the
standard. As guests travel with iPods, cell phones, and lap tops, the demand
for the latest technology in-room is great. So, it may be wise to evaluate
your property and the needs of your customers to analyze the effectiveness
of your technology; research what is available to you; and decide what,
if any, areas should be upgraded for you to remain competitive in the marketplace.
Employee Training:
With continuous high demand, it is difficult for owners and managers
to ensure that customer service is top of mind with their employees. Housekeepers
are rushed to clean rooms for that next check in and the front office is
typically rushing to check guests in, find rooms, check out guests, and
answer phones, all at the same time. And when occupancies are high in your
local market place, it is easy to become complacent with service that is
not excellent. But when the demand falls and guests have a choice of properties,
they will remember who treated them well and appreciated their business.
Therefore, the commitment to invest in training during this strong market
along with ongoing follow u, will place the property in a much stronger
position to enjoy and maintain good business during the down times.
Direct Sales:
The cost of a direct sales effort can typically represent 50% of the
marketing expense budget, with most of the expense in labor and benefits.
When business declines, this is a key area that is evaluated to ensure
that there is a return on investment. But, what is happening with direct
sales during the feast periods? Many times, there is no direct sales plan
in place. Sales people meet their targets because of the great demand and
there is little, if any, proactive sales approach to ensure that there
is a database of potential business that is well-qualified based for present
and future business. Therefore, it is important to place systems and procedures
in place so that in a downturn, good habits and work ethics are already
in place to ensure that your property excels in market share.
Web Site:
The web site is probably the most cost effective marketing tool available.
Web site research and web site bookings have steadily and dramatically
increased, contributing to an average of 50% of the bookings. So
why wait until bookings fall of to ensure that your web site is well designed
and fully optimized to generate bookings? And why wait to ensure that you
have the best booking engine to capture that guest who wants instant information
and instant booking capabilities. Put a program into place so that you
can proactively address needed enhancements to your web to stay current
with trends and technology.
Therefore, to ensure that you are well positioned when there is a down
turn, it will be very important as of now, when business is strong, to
implement these initiatives on an ongoing basis. This will allow an owner
or manager to enjoy profits, satisfy guests, and attract and maintain top
employees.
This article is reprinted with the permission of its author and HotelExecutive.com.
About
Fields and Company:
In her more than 25 years as a marketing and sales pro in the hospitality
industry, Brenda Fields has emerged as the "go to" consultant for independent
and/or privately owned hotels and resorts seeking real-world solutions
for today's market challenges.
From small boutique hotels to large convention properties, Brenda has
created and implemented highly successful Strategic Plans that enable owners
to achieve target results despite market conditions. With extensive expertise
in pre-openings and repositionings Brenda was responsible for the successful
opening and stabilization of the Paramount Hotel in New York, one of the
first boutique hotels.
With a "who's who" roster of clients, Brenda has worked with a number
of industry leaders and real estate investment companies including Starwood
Lodging Corporation, Planet Hollywood, Choice Hotels International, and
Olympus Real Estate Corporation, among others.
Brenda is currently President of the Hospitality Sales and Marketing
Association International Greater New York Chapter of over 500 members
and was recently awarded "The Top 25 Most Extraordinary Minds in Sales
and Marketing by HSMAI. She also received �The Best of the Best" award
from HSMAI for the Awards and Recognition committee work Brenda can be
reached at: 518.789.0117/phone or [email protected] |