Revenue Management & Covid-19

The doors to your business may be closed, however, there is still much to get on with, and managing the revenue and reservations strategy is just one of these things.

You may have only decided to cancel bookings up until a certain date, but you still have other future guests calling and asking questions about their reservations. Ensure you know what these answers are for your guests, so the same message is given to everyone. If a lot of your business is group bookings such as wedding parties, hen do’s, family get togethers or you host weddings there will be many guests with many questios due to their longer cancellation policies and deposits that have been paid.

Even if you are optimistic that you will be open by dates that guests have questions about, many of these group bookings will already be planning alternative dates just in case. My advice to you would be to accept these moves free of charge as you will want the business in the future as well as the incremental spend. However, remember to check pricing etc for changes that may fall on bank holidays or key dates in the future. Keep track of the group bookings that don’t rebook so you can target them once you know when you are re-opening to try and gain their business in the future.

During this time, it is important to keep a good relationship with key corporates, tour operators, walking holidays and anyone else that puts business your way. Maintain good communication with them so that you hopefully won’t lose out on this business when you re-open. Many tour operators are encouraging guests to rebook and therefore there may be an increased amount of business from them during September and October or these guests will be moving to next year bringing longer lead times for next years bookings. If you can respond to these enquiries immediately, you will probably have a better chance of gaining the extra business from them than other properties who currently have their reservations team on furlough.

It goes without saying that it is important to ensure any new enquiries for reservations are responded to straight away and that you convert every one of these enquiries. Every booking for the future is needed, follow ups are key, so that you can open with some business on the books.

Rates will still need to be looked at, as bookings start coming back through. You may not need to do this as often as you were, but they do still need to be flexed and looked at and compared to the market. It may also be worth uploading rates for your business so that they are ready up until September 2021 so that as you see these enquiries come through, your team already know what to quote them and can get them booked in easily. The reservation process should be smooth. I would expect to see an increase in enquiries for next year for weddings, family gatherings and from tour operators at this time.

An important thing to remember here, is don’t lower your rates as this doesn’t create demand and will only dilute your revenue. Work on the marketing behind your business to drive through the enquiries to then be converted into bookings.

Guests will probably be a bit hesitant to part with their money at the moment and therefore Advance Purchase Rates and rates with stricter cancellation policies may not be being booked at the moment and this will probably continue for a little while. You may find group bookings for weddings and family gatherings may not want to pay deposits, so it is important to be prepared for this and work a plan to ensure that you don’t lose out on these reservations altogether. Depending on your reservations team, you can probably look at these on a case by case basis and adapt to the individuals worries and needs. The trust will come back, but the next year or so guests will probably be less likely wanting to pay those deposits.

With the Advance Purchase Rates not being booked, the lowest rate going out would be your Room Only and BAR rates – have a look at these rates, do you need to turn off the Advance Purchase Rates for a while and lower your BAR and Room Only rates to be in line with the pricing of the Advance Purchase? Any room packages that required full payment and maybe had tighter cancellation policies may also need looking at and changing slightly. You may find that people are still booking these rates as they know that if the government advice is not to travel, they know they will be refunded, so do what you know is best for your business.

It is worth looking through the different types of business that you get your way and thinking about how they are going to react and when. Is the same demand going to be there for each segmentation and are there any new markets to tap into for your business. We need to think about how guests are going to behave in the future. We can then use this to look at the marketing strategy and how we may need to adapt some offerings that we have.

Obviously, we don’t know exactly what is going to happen in the near future with the government restrictions, vaccines being found or tests for Covid-19 being easily available. However, it would appear that people are confident that by September restrictions won’t be as strong, even if it’s just for travel in the UK. Therefore, if we look at the leisure market there may be a large demand for ‘Staycations’ and you should focus your marketing to the correct demographic. Going abroad may be the next phase, but it will all depend on how restrictions are lifted.

In the business and corporate market, some people will be desperate to go back to work. However, many companies may adapt to their employees working from home permanently in the future as it has been working for them over this time and therefore, do they need the overhead costs of an office? There will be disadvantages to this as guests may not need weekly accommodation but let’s look at the possible revenue opportunities of this to you. Now that they may not be going into an office, there may be a demand in meeting spaces and away days. Do you have the facilities to accommodate this, or can you adapt a few things to be able to. If you don’t already, have a look around at what others are charging and get your offerings and collateral ready for when you re-open.

When looking into your Travel Agent bookings, there are a few things to consider. Yes, some of these are encouraging guests to rebook for later in the year and next year. However, some of these companies are small and may not be around after Covid-19. You need to think of where you are going to make up this loss of revenue from for next year. There may be new companies popping up that your sales team can be making contact with, and they need to be building a good relationship with current ones to drive more business your way.

Looking at the group booking market segment, this could have many effects. It may go boom the second you re-open with friends gathering to get away who had summer city breaks planned, or maybe they will wait until they can go abroad again. Family group bookings, these may wait until Christmas, they may come straight away after not seeing each other for many months, or maybe they will plan next year, but maybe happier to spend that little bit more as they didn’t get to get together this year. You could look at ways to target families that wouldn't normally go away to drum up some extra business.

There may be an increase in autumn and winter weddings this year, and more last minute weddings than before, so be prepared to move the odd booking to let in a wedding if you host them, as long as they drive the revenue and you are better off having the wedding party (which you should be if the displacement of revenue has been calculated correctly). This could also be the opportunity to drive these weddings to days such as Thursdays and Sundays as the demand will be higher. Some guests may not think they can organise a wedding at such short lead time or maybe not even considered an Autumn or Winter wedding, so work on what you can offer and then the marketing and make it known to them that you are willing to take last minute weddings.

Even though the business is not trading, now is a crucial time to ensure that all enquiries are converted into business on the books and the time is used wisely to plan things such as targeting new markets, building new packages, loading rates and looking at rate plans. Look at your marketing campaigns and sales strategy for the next few months as the marketing and sales will be so important to get the business through the door. Think of all your market segmentations, their change in demand, and how you are going to market and target all these audiences, not just one or two. Maybe there will also be some new audiences to target such as rewarding of the NHS staff or maybe all emergency staff and those that work in the army which could help boost occupancy. Look at all the guests that have cancelled because of Covid-19, maybe you could send them a personalised enticing room package to get them booked in directly with yourself that 1st month of opening to try and get some quick business on the books (if you need it). Chances are they will come again at some point in the future, so don’t dilute the revenue by offering them something super cheap. You may need to split this into market segmentations or demographics and target the oversea travellers later on, again, dependent on how the government restrictions are lifted for us and the rest of the world.

This time could be perfect to put together your direct booking strategy and ensure it is strong. When you re-open you will want all streams of bookings open to ensure you get that business on the books so it would be good to have your direct booking strategy in place. Hopefully your guests will be looking around and want to book direct as OTA’s have been hard to get hold of as a consumer or hotelier over the last month. Make sure it is clear on the homepage of your websites that booking direct is best. Ensure that your OTA bookers know that next time they stay they are better off booking direct. Combine the booking direct strategy with a reason for guests to sign up to your newsletter and let them know the other benefits to signing up to your newsletters such as the great content and be in the know before others.

It may be worth getting the marketing going behind your vouchers or putting a voucher sale on. It may not be Christmas, but there will be many people looking for gifts for loved ones at this time for birthdays, ‘’just because’’, ‘’cheer up’’ and ‘’something to look forward to’’ presents. With having to stay inside (and the royal mail service reduced), vouchers make an easy gift to give and something guests can look forward to using in the future. It’s a good opportunity to get some guaranteed revenue through the door for when you re-open.

Overall, what will happen when and the effects on all the above will all depend on how and when the governments advice will change, if people follow the governments advice, if a vaccine comes along or an easy assessable self-testing kit is available. Keep an eye on rates, watch the market segmentations, look at pace and watch when it starts to pick up again. Ensure that all your enquiries are converted into bookings, don’t let any hurdles get in the way.

If you need a hand with your Revenue Management Strategy during this time, please don't hesitate to get in contact with us.