Every hotel needs a recovery strategy to come back to the revenue levels before the pandemic. There are four easy steps to form a commercial strategy that will take the hotel towards its vision.
The years before the pandemic, many hotels did not need a strategy, nor too much marketing, sales, and revenue. Nevertheless, the guests kept coming, and there was no end in sight to the increasing lust for travel. However, with governmental and business travel restrictions and consumer fear of travel, the revenues disappeared overnight, and many experts now forecast several years for hospitality to recover. Hotels with a solid commercial strategy will recover faster than hotels just waiting for travel to return.
Many hotels are limited in quickly changing their strategy since most hotels once were built for a specific target group or a particular travel reason or purpose. For example, many hotels with city center locations in northern European capitals have an inventory with many single rooms to meet the demand for business travel. However, if there are fewer business travelers, these rooms will be impossible to sell since couples or families need larger rooms with more beds. So maybe these hotels need to reconfigure the room inventory to become more relevant to future demand to develop a new strategy.
Create a commercial strategy
Most hotels in the world are owned and operated by entrepreneurs or families with a vision of providing hospitality to their guests based on their idea of hospitality. The notion of what they want to achieve is a great starting point. The strategy is how to achieve the vision, and this requires a lot of choices. Even if hotels never say no and welcome everyone, the hotel's value proposition is not equally attractive. People have different needs, requirements, and wishes. Therefore, the first part of a strategy is to choose the primary target groups. The second part is to create an idea on how to win these primary target groups. The third part is to ensure that the hotel and the commercial team have the right capabilities to attract the guests and their money. The fourth part is to set up a management system that enables, supports, and reinforces the strategy.
1 Define and choose the target group
Finding the right target group is probably the most challenging part for any hotel. Hotels hate to say no and are masters of flexibility and compromises. Yes, we can accommodate a family if we squeeze in an x-bed in the small room. However, the experience and guest satisfaction is also compromised. The better way is to choose a target group where the hotel can meet needs, requirements, and wishes to provide an excellent guest experience. These happy guests will give the hotel high review scores and help the hotel to attract more guests. On the other hand, a too flexible hotel that makes too many compromises will only create unhappy guests and receive bad reviews. Therefore, hotels should protect their long-term success by saying no to guests that do not have a good fit for the hotel.
2 Create a superior value proposition
Every hotel needs compelling value proposition to attract the guest. Once the hotel has decided on the target group, it is easy to research their needs, requirements, and wishes. Then, based on actual needs, the hotel can craft a superior value proposition with content that would attract and make the guests happy.
3 Acquire the must-have capabilities
The hotel needs to have the capabilities to deliver the promised guest experience. The right capabilities might require additional investments in the facility, staff training, technology, systems, processes, and other areas. The commercial team needs data, information, and knowledge about the target groups and their behavior to attract and capture them in the most productive way. The hotel with the right capabilities will win the game of attracting the right guests.
4 Supporting management system
The owner/CEO/top management must support the chosen strategy by providing the right resources to execute the plan. Next, they have to make decisions about investments to give the promised guest experience. Finally, they have to appoint a commercial manager and provide the right tools to execute the commercial work to attract the guests and the total revenue. Part of a management system is also the ability to track the progress and adjust the plan.
For more ideas, download the white paper "Create a High-Performance Commercial Team."
