Veteran hotelier and independent consultant, Giovanni Angelini, offers pearls of wisdom on how to stay afloat in today’s competitive industry.
Picking up from last column’s tips on meeting the changing needs of customers, Angelini offers reflection on branding, sales and distribution, and human resource management.
Studying the brand
Hotel branding is much more than just putting a logo everywhere. Clarify your brand standards carefully and clearly, and sell them internally then externally. Hotel brands tend to be so ubiquitous that they have lost their soul and uniqueness.
Avoid that by asking
- Do customers understand the brand promise and is it delivered?
- Is the DNA of the organisation reflected?
- Is there image consistency on brand-related material?
- What is being done to prevent brand erosion?
- Have you measured perception of the brand position within the industry?
- Of the total advertising and promotions budget, how much is spent on the brand position and how much on tacticals?
Marketing dos and don’ts
- Avoid the long annual marketing plan. Have a document that is a useful working tool and with a clear mission statement for the fiscal business. It must have strategies for each segment of the marketplace with flexibility to modify tactics as necessary
- The marketing plan is to be supplemented by a working directory of marketing manual. This is a “live” document containing programmes, activities and measurable performance reports. It must be updated on monthly basis
- Plan and execute practical campaigns aimed at increasing market share. Listen to your customers and reflect on what needs to be done
- Re-evaluate what worked and what didn’t last year. Learn from your mistakes
- Traditional markets are important, but always look for new markets and new travellers with spending power
- Develop a clear strategy for each segment and how this is measured. E.g. What is the volume and percentage of MICE business?
- Focus on weddings as these are revenue generating and recession-proof
- Explore the usefulness of a booker programme recognition
- Manage your loyalty programme
- Look at the condition of the hotel’s database
- Measure conversion rate optimisation
- Measure the percentage of repeat guests and length of stay
- Be proactive on social media and respond to customers’ comments and recommendations
Getting the best yields
The love-hate relationship between OTAs and hotels/operators will continue. OTAs are beating branded hotel websites both on social media and in web searches. Such sites continue to be quick in establishing market dominance through consolidation. Hoteliers are doing poorly at cooperating for the common good of the industry and OTAs are taking advantage of this. OTA commissions remain far too high.
Manage your OTA relationships by
- Controlling OTA volume and rate plus commission
- Not allowing OTAs to purchase rooms below your BAR rate
- Being alert to whether your OTAs have access to your special tactical packages and contracted corporate rates to top producers
- Constant monitoring of your OTAs’ activities, refocusing on your own website and managing a dynamic pricing system
Guidance on revenue management
- Give your revenue manager necessary tools to analyse data and plan accordingly
- Develop a sales-revenue culture in the hotel that takes priority over any other activities and involve all division-department heads on sales and customer relation activities
- Involve all division heads on the forecasting process (a month, three months, year-end) and set targets for accuracy
- Revenue managers should be seen as a critical part of the executive committee
- Manage your rates and ensure rate parity, if necessary adjust your BAR rate on daily or even hourly basis
- Practice balance on increasing rate, occupancy (objective is the RevPAR)
- Consider creating or participating in hotel search engine websites like Roomkey.com with the objective of reducing costs (commission) and expanding source of business
- Are you measuring the amount of commission paid and comparing year-on-year?
- Is there a daily revenue meeting at the hotel/s chaired by the GM?
- How is the reservation team performing? Also what is the volume of business generated by the regional sales offices? Are there clear KPIs?
- Ensure the catering book is controlled (normally one person is responsible)
Running a tight ship
No doubt generating the desired ROI is the final objective of leaders, but do you realise that revenue and profitability are not created at the corporate but hotel level – executed by a team of motivated and committed people and by having a competitive product that actively responds to ever-changing customer/market needs. In this demanding industry, strong and experienced leaders are necessary at both the corporate and hotel levels.
Remember the balance: happy staff and unhappy guests mean poor business, as do happy guests and unhappy staff.
Suggestions on leadership
- Create a strong and clear aligned vision towards a common objective, addressing both your staff and customers
- Avoid procrastination at all levels and respond quickly to the needs of staff and customers
- Lead by example instead of a “do as I say” approach
- Be visible i.e. get out from behind your desk
- Delegate and recognise results and achievements
- Be a solid communicator and maintain creative communication with your team at all times
- Hire the right people (those “smarter” than yourself) but get rid of “rotten apples” quickly
- Avoid unnecessary lengthy reports as well as third-party consultants who claim they can change the company’s performance. Note that a good and motivated in-house team can produce much better results than consultants.
Treat your staff well by doing the following
- Provide an attractive career path and personal growth for staff. Ensure that compensation and incentive packages are among the top three to four in the city and that they are reviewed or updated annually
- A long-term provident fund for executives and management staff is a must
- Do evaluation often, always let people know where they stand and reward top performers
- Avoid overloading your team with complex multi-programmes, but heighten their knowledge in technology, social media, etc
- Have a programme that allows you to measure productivity e.g. revenue per labour hour, rooms cleaned per shift, covers per service period, etc
- Open your team to new ideas and let them participate and contribute. Provide an environment of risk-taking
- Look into basic facilities for staff e.g. lockers, showers, recreation, staff cafeteria and decide if it’s time to upgrade/renovate
- Celebrate success but do not accept underperformance in your team
- Create confidence and provide support in good and bad times
By Giovanni Angelini
