DEAL OR FLY

A low or an off-peak season in any hotel can be a worrying time as you struggle to work out how to bring the occupancy up and at the same time not wanting to hurt your returns.

It can be very tempting to think that lowering rates will sell more room nights and therefore help to increase room revenue. While it may sell a few more rooms, discounting strategy rarely generates sufficient sales to offset the reduced revenue and the shift in a customers’ value perception of your hotel.  Slashing your rates could trigger a price war and may harm your pricing integrity, leading to resistance in any rate increases when markets are better.

A more effective option is to focus on adding value, as:

  • Be inventive with the rate packages you create.
  • Explore different market segments.
  • Be innovative with your marketing activities.
  • Encourage more direct bookings on your website
  • Promoting exclusive benefits to guests direct booking
  • Convert guests that come from third-party channels

Nevertheless, before you address your occupancy challenges, you first need to identify your hotel’s occupancy trends and your guests booking behavior so that you get a clear picture of what you need to be prepared for.  This will help you understand how much in advance you need to execute your activities such that you do not miss your prospective guests “booking window”. Work with the hotel’s history. A bit of bench-marking of hotels around is also necessary.  It will give you another layer of business intelligence on demand conditions.

Below are a few ways in which you can stimulate business when you experience low demand periods:

Use Meta-search

A meta-search engine is a search tool that sends out queries to other search engines and then collects that data to produce its own results.  Cost-comparison sites that aggregate hotel properties, such as Expedia and Skyscanner can be a part of your distribution strategy. Originally these websites presented travelers with a selection of hotel room choices before sending them to an online travel agent (OTA) for booking, but now they have evolved to include booking buttons directly within the results.

Meta-search engines allow smaller properties to be on the same playing field with larger hotels. Rates from your website are presented alongside OTAs as a part of the guests booking options, which means there is a better chance that a customer will book directly.

A small hotel using meta-search engines will reduce its distribution costs and drive revenue. Meta-search works as a pay-per-click (PPC) system, which is usually less costly than a percentage-based commission.

Meta-search enables small hotels to combine current promotions with real time room availability and rates, as well as adjust the pricing when needed instantly. This empowers these hotels to meet their customers demands and provide them with all the information they require to book their room at the time they are shopping.

The meta-search websites create an additional advertising opportunity that can showcase your product on multiple portals and start to create an online community with guests through their customer reviews, ratings and photos shared.

Online Travel Agents (OTAs)

OTAs are the key to online distribution for any hotel, small or large. They help you reach markets that you do not have access to and guests are often more willing to book a hotel that they have not used before through an OTA because they feel a level of comfort and trust.  OTAs focus on marketing to a much broader audience thus expanding the number of potential guests in an international market that typically would be out of reach for many independent hoteliers.  OTAs are also a great channel for building brand recognition and incremental revenue.

Once a guest arrives via an OTA booking, the hotel front office or the reservations manager should take responsibility to ensure the guest books directly for their next trip through your website by offering them a special rate code.

SEO (Search Engine Optimization)

Effective SEO is important to raise the visibility of your hotel online. To increase the levels of visitor traffic to your hotel website a hotel must ensure that they are properly set up to be visible on search engine results pages (SERPs). The benefits of optimizing your hotel for search include:

  • Keeping your hotel ahead of the competition
  • Establishing credibility and authority
  • Improving hotel customer loyalty and engagement
  • Increasing hotel brand awareness by reaching a wider audience
  • Generating interest in your business
  • Building traffic to your hotel website

Creating Promotional Packages

Creating a package allows you to mask the room rates with features, which add value to the stay at your hotel. This makes it attractive to a guest for the additional benefits that they will enjoy and means that as a hotel, you are competing on service and value rather than price. Providing value in this way is a great tactic to also differentiate your property.  It is better to have integrity with your price positioning.

Customer Retention Strategy

By offering your guests the chance to book your hotel directly provides an opportunity to build a marketing database.You can try to segment the emails in your database to customize your packages and discounts. Create some insights based on the business intelligence that you can gather from your database, look at developing a conference package or stay two nights and get the second one at a discount, offer dining discounts if they eat at your restaurant. The anchor for all these offers can be based around mid-week travel during a low demand period.

Target audience

Use data collected in improving your hotel’s marketing strategy and approach to revenue management. For example, your business intelligence (from collected data), can be used to forecast the low and high demand seasons. A hotel’s marketing business plan would then need to take into account different activities to either trigger activities during low demand periods and increase yield and rates at peak times.  Segment your database by type of business – this will help you to create campaigns to targeted audience with relevant offer(s).

Develop Partnerships For Added Value

Working with partners will help you to create added value features and benefits that are difficult to put a precise cost on but will help elevate the perception of your packaged rates.  Partners can offer a brand endorsement for your hotel, offer access to customer contacts that you may not normally have, help you to learn more about customer behavior and differentiate you on brand positioning rather than on price.

Parting Shot

Corporate & Private Event Planning (CPEP) Ltd is a unique corporate event management group that understands the importance of events in helping you achieve your business goals. Our eclectic and energetic collection of industry professionals are simply the best. We work closely with our clients to deliver extraordinary, impeccably crafted events that create unforgettable memories, team synergy and strategic communications.