3 Revenue Recovery Strategies for Hoteliers
It's no secret that the impact of the current pandemic has hit the travel industry harder than most. Clearly, the future outlook and occupancy recovery for hotels won't happen as quickly as we'd all like. This means YoY, there will be less travel, which means fewer guests for hotels, and ultimately, a reduction in occupancy. In this article, our aim is to provide suggestions on how to maximize your SOGW (share of guest wallet) and make more money from fewer heads in beds.
Here are 3 ways in which we think hotels can revenue recover some of the lost revenue more quickly once we rebound.
Prioritize Guest Engagement
According to the below chart from a Gallup study, on average, an engaged guest spends $588 per stay at the hotel they most frequently stayed at over the last 12 months, as opposed to only $403 in spending for a guest that isn't engaged - a difference of approximately 45%. This is a topic we have covered multiple times (read HERE), but there couldn't be a better time to think about guest engagement than now!
Awareness is key. Many hotels stick to the basics of the casual and quick check-in, as they attempt to handle volume of incoming stays efficiently. But taking a moment to greet guests with a welcome drink for example, and making sure they're in the know about the entire property is a powerful way to make sure they take advantage of your facilities and services. This is also a great way to cultivate a relationship with the guest and staff which will increase guest engagement.
Another way to generate greater engagement is to embrace hotel technology in the room. In many ways, guest-facing technology has now become as inevitable as the towels hotels provide for their guests. The key is to focus on tangible, highly engaging technology, so as to capture as many guest eyeballs as possible. Since hotels will have to take into account a reduction in guest arrivals, getting technology to help improve engagement with the ones that do arrive will be the key strategy when it comes to rebounding.
In that sense, hoteliers need to bet on technology with few to no barriers to entry. In other words, what is required from the guests, in order for them to actually use the technology? And once they decide to use the provided technology, how much time do they spend on it? How many guests decide to use it? What do they use it for? And how many other touch-points does the technology replace? These are some of the critical questions to address, in order to maximize impact.
Capture More Off-Site Spending
Now, more than ever, is the time to stick together and support local businesses and other tourist attractions in your backyard. Assuming most hotels already do this, but if not, they should be partnering with off-site outlets which yield incremental and ancillary revenues. Unless they're returning guests or a brief-stay business traveler, most guests will be unfamiliar with your city.
It's paramount that hotels now learn to "explore with their guests". Travelers spend the majority of their time exploring the destination, and if the relationship between the hotel and guest is suspended at the property's entrance, the hotel's value is in danger of being reduced to only becoming a place to sleep. What's more, the average traveler wallet in places such as Dubai reaches more than $550 in daily spending away from the hotel - imagine being able to capture a larger share of that!
In order to become more critical and valuable to a traveler's journey, hotels need to take their staff (including the likes of concierges) digital and empower them to wow guests beyond the physical limitations of the property. As you can read HERE, the relationship between staff and guests is an intricate one that can be boosted by creating harmonies between digitalization, technology and staff.
In order to become future-proof and capture more off-site spending, hotels need to digitize their compendiums to make hotel services accessible off-property. They need to provide an understanding of the destination and be the point-of-contact when guests are in need of help or recommendations. They need to become a more critical component of the travel journey, so they earn the ability to capture a larger share of the traveler wallet.
Cut Costs, Be Sustainable, And Go Digital
Many hotels have embraced technology, which is a step in the right direction, but we still operate in a sector that is arguably far behind when it comes to subject. Hotels still spend an incredible amount of money and, perhaps more importantly, time on printing. This means compendiums, folios, updates to facilities, etc. that either live in the room or are slid under the door, which also means staff time away from guests and the opportunity cost of time spent away from direct guest engagement.
In addition to this, sustainability has been a hot-topic amongst hoteliers over the last few years. From reducing the use of plastics, to no longer providing takeaway travel-sized toiletries in rooms, hotels are making a strong effort to protect the environment. Going digital eliminates the need to print, helps preserve our planet and ultimately reduces the opportunity cost of having to spend staff time on things that are tedious and don't carry any real weight.
One Bangkok-based hotel that's making waves in creating harmonies between cutting costs and promoting sustainability by going digital is Triple Y Hotel in Bangkok (read HERE). By deploying guest-facing technology, the property has created a one-stop-shop for guest-to-staff communication, eliminated any form of printing, and even removed the traditional in-room PABX phones - that is how you cut costs, become sustainable and truly go digital.
In conclusion, (as hoteliers) we simply can't go back to work and promote the status quo that was in place before a global crisis rattled us. I guess there's never been a more fitting application to the overused "think outside the box" narrative.