The hospitality industry is the one that is affected the most by the pandemic situation. With series of lockdowns imposed and heavy travel restrictions, hotels are finding it hard to survive and thrive in the industry. Moreover, with the cut-throat competition of competitors slashing rates has made things more difficult. Especially with growing hygiene and capacity restriction requirements, hotels are facing the pressure of additional expenses with also losses of no travelers or customers booking with them. So at times like these we recommend adopting a strong revenue management strategy that helps hotel businesses cope with situations like these. Covering more on this and providing expert advice here is what we suggest the hotel industry for improving their business.
Dynamic Pricing Strategy
In this time of COVID-19, measures for maintaining hygiene are costing the hotel industry huge. With capacity constraints, distancing regulations, hygiene maintenance, and unpredictable demand have resulted in complete chaos. This has resulted in hotels randomly slashing their hotel prices with a belief that they would earn short-term revenue. However, this has an impact on the pricing levels in the market causing a strain on the industry. But we as experts of the industry recommend hotels to brace themselves and hold on to a dynamic revenue management strategy. Hotels should rather keep their pricing strategies constant and focus on re-positioning themselves in the market. While maintaining the service quality, hygiene standards measures and customer benefits must be used for their marketing strategy. On the other hand setting, dynamic pricing using revenue management strategies and tools hotels can enjoy the flexibility of evolving with changes in the market.
Managing the Varying and Unexpected Demand
All hotels are facing a varying demand with changing COVID-19 rules, lockdowns, and other related regulations. However, everything has a pattern and trend. Identifying this is possible with having a strong revenue management system in place that helps analyze such trends. Recognizing the demand is the key to setting up the right pricing strategy at the right time, by the right distribution channel. Set a strategy in place that accommodates unexpected dip in demand with probably adding additional ancillary services like spa and gaming to make up for the lost income. Using demand forecasting in revenue management to predict the times throughout the year when consumer demand rises and falls, one can accordingly adjust and build a strategy around it. Forecasting demand is crucial for building a strong revenue management business model and for achieving the operational and business goals based on your budget.
Positioning your hoteling services right especially at times like this is crucial for your business. Adopting a holistic revenue management approach with a blend of right pricing, right positioning, and marketing the USP will surely boost your business and sales. Further, this could contribute towards a long-term maximization of the hotel's profits. Knowing your customers and understanding their needs for this is also crucial. Based on the requirement you must bring an overhaul in the marketing strategy and position the business right to gain maximum benefits. Hotels must come with unique ways to meet customers’ demands while restricting their budget to a certain limit rather than randomly lowering the prices.
Understanding Guest Preference and Behaviour
At times like this maintaining the value of your brand while also being flexible enough to accommodate customers’ needs and also the hygiene standards of COVID is crucial. So, the key to this would be analyzing guest preferences and behavior that your business can probably accommodate and adapt to for attracting loyal customers. This can possibly be achieved by running an advanced revenue management analysis. With that, the hotel will be in a better position to understand customers booking behavior in terms of the room requirements, rates they are willing to pay, additional services that they looking for, and much more. This will enable hotels to accept the bookings at the right conditions, at the right price, over the best dates for maximization of revenue with optimum resources. The revenue management system helps with such analysis and reporting makes this kind of decision easier.
Encourage Direct Sales
During the pandemic, OTA channels have too lost out on a lot of money and trust due to the lack of support and customer care services required at urgent times like this. So hotels can make the most of this opportunity by offering customers a great deal with direct sales. They must look to integrate the benefits of direct booking with 24/7 availability and customer service. This helps build trust and loyalty. They can possibly even work on their websites to build good navigation, user-friendly booking functionality, and a sales offer. Revisiting their hotel channel management and pricing strategy, the hotels should carefully consider and evaluate their membership programs and promotion of OTAs and thereby restructure the entire business operation model to rather encourage and facilitate direct sales.