If you haven’t learned your own lessons during the treacherous year that was, then you may as well stop reading now. You’re like my neighbor’s dog; no matter how many times he’s been shocked by his electric fence, he still charges at me every day during my morning run. Bark … charge … ZAP! … whimper.
For the rest of us, periods of crisis not only force us to adapt and sharpen our skills in the moment, but they also help us prepare for future crises to come.
Sheryl E. Kimes of the Cornell Nanyang Institute of Hospitality Management understands as much. And during December 2009 and January 2010, she put those principles to work, asking more than 3,000 revenue-management professionals what they did to survive the recent economic downturn and whether or not their tactics worked.
Her findings, which you can (and should) access here, reveal that while discounting was the most frequently used strategy, marketing approaches (e.g. developing new market segments, using pay-per-click advertising, developing other revenue streams) were the most effective.
Kimes also identified seven key lessons all revenue-management professionals should remember in future downturns:
1. Be prepared. The foremost piece of advice respondents shared was to be prepared and to have a plan. When devising your plan, keep long-term goals in mind, Kimes said. How will your plan impact customer satisfaction, employee satisfaction and the long-term image of your hotel or chain?
2. Don’t panic. Stay calm and look for solutions. Don’t compare downturns periods with previous good periods. Think more in terms of long-term decisions.
3. Be wary of broad-scale discounting. Respondents were least likely to recommend this tactic for the future. It takes years to recover from carte-blanche discounting.
4. Don’t cut your marketing budget. If you cut your budgets, you won’t be able to develop the packages and promotions to keep current guests and attract potential guests.
5. Consider marketing approaches. Respondents reported high success targeting smaller, less price-sensitive market segments. Another popular tactic was to develop new revenue streams (e.g. food, spa) within the hotel, as were Web-based marketing approaches such as pay-per-click advertising.
6. Consider rate-obscuring practices. There’s a difference between your public rate and your private rate. Respondents were generally pleased with the performance of opaque distribution sites.
7. Service, service, service. Are you really surprised? While budget cuts typically are unavoidable, never do so at the cost of service.