Whether you’re a small B&B or a branded hotel, you know seasonality has its ups and downs and one way or another, it has the potential to impact your bottom line. It can be a lot of effort for you and your team to maintain decent occupancy levels and ADR in the quieter months especially when there’s other things to do. Lowering rates to boost occupancy can impact revenue and profitability, so that's not the best option when you have fixed and recurring expenses to think about. The good news is, there’re many options you can take to preempt the impact of Low Season, which we’ll discuss below
Let's begin by exploring the 5 Best Practices to help you navigate your way through:
Dynamic Rates: No hotel manager wants to offer lower rates to fill empty beds. Choosing a dynamic pricing structure for your hotel rates is good policy at any time of the year. Dynamic simply means adjusting your rates to reflect market conditions rather than having a “one size fits all” strategy. Static rates are a thing of the past and no longer accurately reflect market conditions that can change from one day to the next. Get your Dynamic Rates in place for the low season, easily with the help of Channel Manager and PMS.
Yield Management: The concept of yield management is that you are trying to get the best rate your guests’ are willing to pay, based on market conditions. With yield management it's important to take into account booking trends and historic booking patterns to set up dynamic rates that align with current market conditions. Especially in Low Season, when you need to fill empty rooms - each new booking is more valuable than at any other time in the cycle, so it's doubly important to manage yields carefully. Know the market price of your hotel against competitors so you minimize the chance of new bookings being abandoned at the checkout.
When setting up your low season strategy, you may want to pull historic booking data from the Channel Manager or PMS as a guide to managing your revenue and profit expectations. Most importantly though, you should leverage both dynamic rates and yield management to sell rooms at the best price according to market conditions. For the best results, use the Channel Manager and PMS to manage your rate strategy during the low season.
During the low season you'll want to broaden the appeal of your hotel. It's a good time to be more aggressive with your sales and marketing activities. You can finetune your tactics according to historic booking patterns.
To make sure you’re not missing any opportunity, use a combination of sales and marketing activities to improve your overall conversion opportunities.
Here are some tried and tested techniques to use for the best results:
Offer Extended Stay Packages: Prepare extended stay packages that include: golf weekend, wellness retreat, culinary courses etc. The idea is to get more “bang” from the booking by encouraging guests to stay longer.You can also include flexible add-ons like food credits or breakfast included options, depending on the guests' preference (discussed more in “Upselling” below). As the pace of bookings stabilize, adjust the benefits or remove the discount ensuring that you maintain a healthy balance between value and profitability.
Target Specialty Group Tours: Incentive discounts for Group Tours can be an occupancy boost minimising the hard work and marketing cost of filling up rooms separately. Securing many bookings in one go can help to stabilise the occupancy rate, boost revenue and remove the burden on fixed costs. Group bookings can include a wide range of categories, including corporate events, conferences, weddings, family reunions, and social gatherings.
Collaborate in Local Events & Sponsorships: Hotels can partner with local attractions, restaurants, spas, and tour operators to offer joint promotions. You may get complimentary tickets, vouchers or coupons to nearby attractions which you can package with room only bookings. Partnering with local service providers is a great way to add value and pay less commission by making the direct booking more attractive than offering the same thing through an agent without perks. On the flip side you can offer discounted rooms to event participants as an incentive to stay at your hotel.
Along the same lines, sponsoring (local) events with room stay incentives is another way to work with the local community to attract bookings. Moreover, sponsorship can have added advantages:
Social Media Activities: Post regularly on social media to attract new customers by word of mouth as well as keeping your loyal customers informed with what's going on at your hotel. In low season, invite recognized social media influencers and KOL's to conduct reviews and stay experiences and post about it on the platform. You can vlog about events you sponsor, through social media to help secure direct bookings from niche audiences. Social Media is an inexpensive way to build awareness and keep in touch with customers at any time.
Leveraging OTA Promotions: Utilize the OTA’s own website to conduct booking campaigns by offering additional commission. OTA's are eager to drive business in low season and will happily work with you on a campaign or promotion. Build hotel visibility by running sponsored ads on your OTA partner website. This will make your hotel name pop up more often under a general hotel search or under hotel search suggestions etc…
Retargeting Website Search Ads: Search Engine Ads (SEM) are a powerful way to pinpoint guests thinking about booking their stay at your hotel.
Retargeting (or remarketing) campaigns use the browser cookie from an original search campaign to continue to track people who have visited your website and browse through alternative sites. Data collected by the cookie is designed to serve ads (that specifically appeal to the guest) about your hotel when they visit other websites.
Retargeting guests can be highly effective in boosting the conversion rates by reminding them about your hotel. This can be a good strategy in low season when guests visit many websites looking for deals and promotions.
Customizing Guest Experiences: Make it easy for guests to customize their stay by offering add-ons. During the booking process, give them a choice of options like a high-floor room, business class service or premium views. Tailoring stays according to requirements or preferences, personalizes the overall experience, helps identify specialty needs and provides additional sources of revenue on top of the room rate.
Focus on Upselling and Cross-Selling: Upselling can increase the average spend per guest. Customizing upgrades, like high floor, newer room or premium view and options like fully stocked bar, business services etc. can help boost revenue. Just like upselling you can cross sell similar services like those mentioned at the time of booking or during check-in. This is especially effective during low season and works to maximize the revenue for every booking.
Leverage real-time reporting and analytics from the Channel Manager and PMS to identify any booking trends and notable variations in the booking demand. Doing so will help you to be more tactical when to be more or less aggressive in your sales and marketing activities.
The two data points to consider are:
Both metrics give you a window into market demand, so you know whether business is on track, lagging or exceeding expectations. Reviewing this matrix can help you finetune your alignment with the macro environment, in order to stay ahead of the curve.
Re-Configure the Staff Mix There’s no reason to schedule staff not absolutely necessary during the low season. Therefore, scale back day workers or part time staff, especially in housekeeping, F&B, Landscaping and Maintenance.
With less guests around, give your staff an incentive to work harder. Asking staff to be more productive in areas where you need it is good HR resource management. Delegating responsibility to regular staff gives them the opportunity to be recognized for promotion, better service charge or pay bonus.
Eliminate Inventory Waste During low season, minimize the inventory of consumable items held on the books to preserve available cash flow. This includes your F&B, Housekeeping and Admin (sales and marketing expenses) departments etc… You should be scaling back the amount of goods and services regularly ordered. Again, be cautious and not overly aggressive about eliminating waste. The challenges of the low season don’t get any easier when you run out of clean sheets or room service menu options. This is also a good time to reevaluate supplier relationships. You may be able to save money by switching suppliers during the low season, and then switching back when business picks up.
Low season requires hoteliers to adapt their strategies. Assume a tactical mindset moving quickly to capture booking opportunities where they exist. Analyze historic booking patterns to guide revenue expectations, and structure your rates to be dynamically in-line with the market.
Your sales and marketing team can focus on attracting business from alternative markets and tailoring packages and promotions to a wider audience. Tried and tested sales and marketing activities can include discounted room only rates, extended stay packages, and value-added booking incentives (coupons and vouchers) or bundled services, like dining, tours, and wellness services. Get additional help by working in collaboration with your travel partners and use social media to reinforce everything else you are doing.
From an operations perspective, be smart, and take steps to ensure that your property is not overstaffed or spending money needlessly. Encourage staff to be more productive, and don't hire labour you don't absolutely need. Purchase consumable items to match turnover and minimize stocking slow moving inventory.
Low season can be a challenging time, so it might also be a good idea to seek advice and collaborate with experts. Hoteliers Guru offers hotel revenue management service that can help you set goals, align strategy and implement the activities you need to exceed expectations. If you’d like to speak to one of our experts about the services we offer - please get in touch with our team.
