Why independent hotels need to automate to rebound from COVID-19

COVID-19 has affected every hotel in Australia. While the industry is focused on the performance and brand recognition of large chains and high-profile hotel brands, smaller properties are also affected by COVID-19.

Pricing rooms incorrectly can significantly impact revenue performance for smaller properties or independents. If a pricing error is made at a larger hotel, it is much easier to “bury” the mistake or absorb short-term revenue losses due to higher room and booking volumes. It is more difficult to manage bookings and capture the best reservations with a smaller inventory by accepting the highest value demand across arrival dates or lengths of stay. This is especially important during disruptions and early stages of market recovery.

Important to remember is that independent hotels often have fewer resources than larger chains and do not have dedicated revenue managers. The general manager, director in sales and marketing, reservations manager or accountant can often handle the revenue strategy. They all have other responsibilities. The lack of a dedicated resource or isolated operating systems can lead to rooms being over-or under-priced. This could result in guests being turned away or a lower booking rate. This can have serious implications for hotels trying to rebuild their business in a volatile market.

Automate to Survive

It is hard to combine and analyze disparate data points with accuracy and efficiency without the right technology. Manually collecting, evaluating, and calculating data via spreadsheets in a fast-changing business environment is tedious and slow. It’s highly susceptible to errors and missed opportunities. This is why global hotel brands have invested in revenue management technology to equip their properties. Automated revenue management technologies (RMS) free hoteliers from being data collectors. Instead, they can focus on strategies that leverage every opportunity with the sales and marketing team to stimulate and capture maximum demand.

Advanced RMSs can create prices that adjust to market changes and take into account the competitive landscape and guests’ willingness to pay. To determine how aggressively or otherwise to respond to a competitor’s price change, an RMS monitors the pricing of comparable rooms in other hotels. History shows that hoteliers are more likely to react to price drops in a crisis like the COVID-19 pandemic. This is to ensure that they can compete for any remaining demand.

RMS solutions provide efficiencies and data science that maximize profitability and productivity for larger hotels. Independent properties that have any of these properties within their competitor set will have a competitive edge because they have greater data visibility and demand insights, allowing them to price rooms more accurately and attract the right customers at the right price.

Develop adjustable, sustainable revenue strategies.

The recent opening of New Zealand’s travel bubble has brought positive news to Australian hoteliers. This will likely boost business in tourist areas such as northern Queensland during the winter months. However, guest demand in Australia may be lower over the long term due to the wider restrictions on international travel. Independent hotels should use automated revenue technology to analyze the demand in their market and understand what guests want. Some hotels could have returning residents who are under quarantine orders. Others could be family members or couples staying in the city. Hotels can offer relevant services and offers to suit any customer, regardless of their demand.

The hospitality industry offers glimmers for hope and return. However, it is still fighting for a share in occupancy. Your 2019 competition set will likely have significantly changed. Traditional business hotels are attempting to capture domestic leisure business. A detailed review of your hotel’s competitive environment is a worthwhile exercise–understanding rival properties’ products, positioning, and pricing strategies are key to driving your product development, marketing, and achieving fair market share.

Revenue management to save

Automated revenue systems are an essential part of a hotel’s technology platform. They are not luxury items. RMS forecasting allows for better labour scheduling and purchase decisions. Staffing managers can determine the areas most affected by guests who stay in the hotel by analyzing demand forecasts for each room type. Housekeeping requirements can be directly affected by the number and type of hotel guests. This includes the staff required at the front desk to check-in guests and the number and number of servers needed in restaurants and valets for parking cars.

RMS forecasts are also useful in the food and beverages department. This is a major source of waste for hotels, particularly for items that have an expiration date. Hoteliers can use RMS forecasts to predict when high and low demand will occur and which segments will have the most potential customers for these perishable products. This helps them order the right product at the right time and avoid expensive spoilage.

The same operational forecasting principles can also be applied throughout the hotel to improve staffing and inventory levels. In a world where every dollar is important, optimized wages translate into real savings.

Do more than survive.

In Australia, independent hotels are more vulnerable to market disruptions than any other hotel industry sector. Independent and small properties can survive and prosper by moving to automated systems that attract the right guests at the right price.


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