Are you a regional hotel or motel operator looking for ways to grow occupancy and revenue in an increasingly competitive market?
You’ll be keen to read these tips and insights from Michael Harper of Australian-based Hotel Rescue that will prevent you from missing another opportunity or leaving money on the table again.
Growth of Serviced Apartments
The serviced apartment segment is on a spectacular growth curve as it continues to steal market share off the motel and hotel segments.
This trend comes off the back of changing guest expectations as they demand more value from short stay accommodation providers. Serviced apartment style products give guests more space, facility, flexibility and often better value. There is also a change in service expectation as the modern traveller lays less emphasis on things like daily cleaning or laundry services, especially if it comes at an added cost.
Dumbed Down Customer Service
I had an experience in Albury [Australia] once at the Siesta Resort where by upon my departure date, I emerge from our suite to find the general manager of the property washing my windscreen and leaving a ‘travel safe’ message for me. The general manager! Now that’s customer service.
You don’t need to spend money to improve customer service. Yet, if you improve your service standards, it can do wonders, helping improve loyalty and spreading the word. The cost of a smile or remembering someone’s personal details is nil, as is going over and above. Near enough is not good enough!
“She’ll be right mate” is not quite the authentic experience your metropolitan guests are seeking.
Digital Lag
While many regional operators have in fact moved to a website and even adopted platforms such as Trip Advisor and the booking engines, there is a reluctance to distribute room rates online through online travel agents.
The rise of consumer-led platforms such as Airbnb have made its imperative for operator – even in the regions – to create a strong digital footprint and riding the OTA wave is critical for this.
Easier said than done though! Even if property owners understand the power of digital, they lack the resource bandwidth to carry out the tasks. To truly harness the potential of digital platforms, first assess your scale and needs, then find the platforms that will help you scale up – with minimal time investment. Ignore at your peril.
Static Pricing
Now here’s what I think is the biggest missed opportunity of all. Having spent time driving sales in a city hotel, I have first-hand experience of what the big guys do to maximise revenue performance. It is a multi-faceted approach with the simple aim of increasing, or optimising, room rates while maintaining or even growing occupancy.
There are many levers we can pull to achieve this and it’s not that hard. It simply takes a system and some focus.
As country boy at heart, upon returning to my roots in regional New South Wales [Australia], I see so many hospitality businesses missing out on the opportunity that property yielding presents. Most regional hotels and motels I see run with a ‘static’ pricing structure which doesn’t allow them to take advantage of the ebbs and flows of the market. If the occupancy is 100%, showing demand, it is time to ask for a premium on your rooms, making up for the days when the occupancy is low.
So what are the impacts if we begin to address some of these challenges that are pressuring regional hospitality?
Revenue Here and Now
Make hay while the sun shines, so they say. Well that’s what you’re in business for isn’t it? It’s about putting some profit into your pocket towards the well-deserved dream holiday or investment. But, you need a solid motel business plan to achieve this.
Revenue in the Future
Looking to sell any time soon? The hospitality accommodation sector in Australia has had a pretty flat experience in recent years with many developers and investors looking more towards serviced apartment stock because of the attractive returns, growth trajectory and alternative exit points. So how are you going to position yourself for exit in a tightened market?
You need good performance numbers with strong revenue, great physical appeal, expanding business and leisure customer base and solid systems and processes in place. Remember, investors don’t buy “potential”, they buy what’s real.
Michael Harper is the General Manager & Co-Founder of Hotel Rescue, a training and consultancy firm focussed on maximizing performance of accommodation businesses. Michael has many years of experience driving sales and revenues of hotels across big cities and is now based in regional New South Wales, helping properties of all sizes improve their performance. The tips in this blog are also shared on video – Watch the Video.