Your Hotel’s Revenue and Marketing Strategy Kit for 2017
We still have nearly two months of 2016 left, but it’s time to look beyond that. By now, your hotel will be outlining marketing and revenue strategies for 2017 (or maybe you’re already done!). To help you tick a few boxes off your massive task lists, we’re offering a few great guides and overviews for the upcoming year.
First, we’re looking at marketing strategies to help you get that competitive edge in the new year. This includes rate parity, smart channel distribution strategies, well planned campaigns and a book direct strategy. Secondly, Duetto discusses the importance of negotiating strongly for corporate rates. We’re also covering the important features of your room-type pricing strategy.
Lastly, we’re including a sharply critical take on the travel industry. Do you agree with the criticisms and accusations of an industry-wide failure to plan, or do you find them overblown?
It’s more vital than ever for hotel owners and operators to stay on top of the distribution landscape. The landscape is expanding beyond OTAs to include popular sales vehicles such as meta-search, flash sales and mobile channels. Beyond simple awareness of the different mediums available to sell hotel rooms, hoteliers must know the cost and expected return of each distribution channel. Hoteliers must preserve rate parity and their brand by utilizing the most cost-effective distribution channels, instead of using desperate measures to sell inventory.
It’s time for hotel sales and revenue management teams to engage in corporate rate negotiations this fall. However, they might find themselves at a disadvantage for the first time in a few years. To prevail or at least maintain their market shares, hotel negotiators need to stress the value they can offer that’s not available at their competitors.
“Hotels need to be even better this year at knowing what is their individual value propositions,” said Bjorn Hanson, clinical professor at the Tisch Center for Hospitality and Tourism. “It could be their location, their particular set of services, their loyalty programs. It could also be the amenities they offer, whether they are food and beverage outlets, or recreation facilities such as fitness centers.”
In a recent forecast of this fall’s corporate travel rate negotiations, Hanson said the outlook is for a change in the balance of power from sellers to buyers. As a result, he forecasts corporate hotel contract rates to increase between 3.25% and 4%. That follows increases of between 5.75% and 7% increases for 2016.
Paradoxically, that sharp drop in rate increase comes in an environment of high occupancy for the hotel industry.
“Occupancy in 2016 in my best forecast is going to be the second-highest since 1984,” he said recently. “2015 was the highest, and it looks like we will finish 2016 a little bit lower than 2015. 2017 will be just a little bit lower, but tenths of an occupancy is not enough that people will sense different levels of availability.”
Suppose you operate a hotel with three room types: superior rooms, suites and pool villas. Because you’re in a warm climate, you’re anticipating high demand for the month of December. Look 120 days into the future. How confident are you in your ability to determine the right incremental price increases between each of your room types?
The fact is: Most hotel operators today don’t fully understand the value in yielding rates by room type. It’s an area revenue managers have always wanted to yield, but seldom have been able to effectively.
As we begin to sell 2017 and plan for 2018 and 2019, here are ten questions we should ask ourselves:
- What can be done about or how can we avoid the stranglehold of the OTAs with their “Billion bankrupts to one billionaire” formats?
- How can we benefit from the overflowing of destinations?
- How can we gain sustainable market advantage from heightening real customer value/experience?