5th New Year's Revenue Resolution

Happy Monday! As I complete our New Year reflections series how appropriate we start the week on our last however arguably the most important pillar of our Revenue Resolutions, Plan Your Guest Relations Strategy. Guest relations is a part of hospitality we all know exists and is important. However frequently our first cuts to budgets and attention when times get tough end up being items like marketing and guest relations. Ironically in tough times, it’s exactly these two things that can help to stem the tide and even get a property moving back the right direction.

At the same time, ignoring these two or cutting these two items also can quickly hasten a ‘fall’ or ‘crash’ from a revenue perspective. Let’s examine why. First, as markets tighten and become a buyer’s market versus a seller’s market, consumers quickly start to become more discerning. During the height of our pandemic we saw a lot of this as much as guests started shifting from ‘formerly full service’ properties to comparable select service. While this is an extreme example and is a-typical of a more usual downturn, this still holds true albeit at a smaller in-segment level between more similar hotels. Small touches and considerations frequently especially with today’s consumer more concerned of value and experience over the promise of quality from being brand loyal. Secondly, cutting back and reducing guest relations strategies are akin to taking a step backwards in most cases. Potentially reducing guest scores or outright generating complaints that become a self-perpetuating cycle of poor scores and complaints costing money in compensation and reduced occupancy and rates which then become reduced revenues potentially forcing more cuts that slowly bleed revenue year over year from the property.

At the same time maintaining strong guest service scores and offering services and amenities that set your property apart can be the exact opposite impact. Alluring guests to come to your facilities over another. Much like our negative self-perpetuating cycle, this can create another self-perpetuating cycle, except positive. Positive scores generating increased interest, increased interest creating the opportunity to run higher occupancies and ADR, ultimately resulting in higher revenues. So now that we have discussed the importance we can see how important these strategies being implemented are. Given their importance much like marketing, it’s easiest to prevent cutting or removing what you have planned, than what you are planning as you go along month to month. When you have pre-planned and strategized your guest relations strategy, the tendency will be to adjust it’s budget inline with other budgeted costs in a fiscally responsible way. When planned month to month (period to period), the natural tendency is to cut what feels fiscally responsible. Typically it’s going to feel most fiscally responsible to cut the ‘extras’, and naturally whatever wasn’t in the yearly budget in advance is going to feel or be seen as the ‘extra-fat’ to trim. So it’s not that we never want to cut guest relations strategies, but we do want to make sure when it’s fiscally necessary, that we are cutting them giving them a proper level of consideration when determining how much to cut, as opposed to ‘trimming the fat’ on the top. Well that’s our five New Year’s Revenue Resolutions to set your year up for success!