Techniques for Managing a Distressed Hotel and Return it to Profitability
As with most industries, the hotel and tourism sector is experiencing a variety of unexpected difficulties due to the recent global financial crisis. With a dwindling capital market and decreased corporate and individual spending resulting from a loss in disposable income, the hospitality industry has been hit by a loss of revenue. For some establishments, the challenging financial situation can be serious enough to cause the viability of the hotel to be called into question.
Sub-Prime Hotel Loans Require Comprehensive Overhauls
Similar to the housing market, loans made within the hotel and tourism sector are beginning to come due and many sub-prime borrowers are operating in the red, making it impossible to pay off their mortgages. While there has been a rebound for luxury hotels and resorts, many owners of lower end establishments have failed to see the recovery they were hoping for. This has resulted in an increased number of hotel owners being unable to find a solution to their increasing debt, since they are convinced that their only choice is to sell at a heavy loss or face foreclosure.
Even in this economy, there are still many owners of distressed properties who are not ready to give up on their establishment. However, they have to face the fact that fewer customers in hotels has greatly increased competition in the industry and it is harder than ever to identify optimal methods to handle their financial problems. It is necessary to take advantage of every option to re-create the hotel’s image, if they are to keep it open and restore it to profitability.
In order to succeed, property owners or managers need to identify, utilize and monitor techniques to ensure that their brand is recognized as widely known, reputable, popular and talked about locally, online, and at hospitality-related events. They are not alone in these efforts however, as well-established Hotel Management Companies such as HMG exist to help them manage recovery efforts and problem-solve when their hotel is falling short.
Key Strategies to Attract Customers and Increase Revenue
In today’s world, a hotel must stay on the cutting edge of image control and marketing techniques in order to remain competitive. There are a number of techniques which should all be used to help a business survive in today’s economy.
Every critical strategy for rescuing a distressed hotel has one objective: establishing a first class reputation and maintaining a high-profile public image that constantly sustains this reputation. Key strategies for accomplishing this goal include a variety of steps:
Build a New Clientele
Create a new, unique and distinctive brand identity that appeals to a wide variety of potential customers
Offer regular specials, such as discounts for online booking
Create package deals for customers who want to do a minimum of planning, while getting a deal while traveling
Create unique offers for specific seasons (e.g. when the leaves change), Holidays (e.g. Mother’s Day), Special Events (e.g. wedding packages)
Through a trend analysis or by conducting online surveys, determine the specialties of main competitors and identify attractive alternatives that potential clientele might prefer
Establish Customer Loyalty
Focus on delivering superior service
Ensure that staff is carefully selected and trained
Create a unique experience for the customer, every visit
Offer specials for returning customers
Provide a gift basket with a note welcoming return customers back
Strive to Consistently Exceed Customer Expectations
Analyze customer feedback and use the data to identify and improve areas that receive lower ratings by defining the targeted goal and generating solutions to increase future customer satisfaction
Marketing does not only include direct advertising, but consists of any approach taken to encourage new customers to book a room, or previous customers to return. Today, an enormous degree of creativity is required to generate ideas that competitors are not already using. With technological advances, successful marketing strategies incorporate interactive components.
Every hotel can take advantage of some type of alliance building with other companies. Promoting others services, attractions, or activities can benefit not only from parallel marketing efforts, but lead to cooperative efforts establishing special packages. For hotel owners, offering specials that include, for example, tickets to amusement parks, national parks, tourist attractions, cultural events, festivals etc. will attract customers who want to experience local events without having to make the arrangements themselves. There should be packages arranged for every demographic segment including families, newlyweds, retirees, business professionals, individuals looking to get away and relax for the weekend, and others likely to enjoy various aspects of the area.
It is important for the hotel owner to maintain a local presence in the community. Owners should be seen at important local events, take part in community service projects, be a member of various local business associations and attend networking meetings, as well as know and be known by as many locals as possible.
Providing discounted specials for local residents will increase the likelihood that they will they will recommend the establishment to tourists during high traffic seasons.
Maintain a Strong Online Presence
To a large degree, since the technological revolution, it has become practically impossible to be successful without multiple online elements. Since each of these sites must have well-written, engaging content that is updated frequently, it is well worth the money to hire a good content writer, as few owners have the time to keep up with each site.
o Website – This is the main portal for learning about a hotel online. It should be well designed and provide the information that potential customers are looking for quickly. It should also serve as the hub toward which all other online sites related to the hotel point.
o Blog – The hotel blog should provide interesting and entertaining information about the area, a calendar of local and nearby events, discussing each in different posts, offer travel suggestions and advice, address any newsworthy events or stories that are relevant. The cardinal rule of Blogs is post, post, post, and new posts should be added as frequently as possible.
o Social Media Sites – Business owners have come to realize the value of using multiple social media sites to increase brand recognition and interaction with current and potential customers.
Using Ratings and Feedback
It is crucial that there be a method for customers to provide feedback and ratings about their stay. There are a number of online software options that let business owners design online surveys to measure customer satisfaction, along with the ability to analyze responses by category across a clientele base.
Narrative comments that are responded to by management are the most important aspect of customer feedback. This provides the opportunity to thank those who commented positively and to address any negative feedback, so previous and potential customers perceive the management’s commitment to improving customer experience and willingness to listen to customer opinion.
Maintain Online Visibility
An establishment may have the best designed website in the business, but if they do not show up in the first few pages of search engine results, they might as well be invisible. Methods of increasing Search Engine Rankings are always evolving, but using keywords likely to be entered during a search related to a specific establishment is still a critical component to having an effective website.
In addition to establishing successful general SEO strategies, registering for local SEO services such as Google Places, Bing Local, and Yahoo Local is crucial, since more than 60% of internet searches are related to local locations.
Is That All?
This list may seem daunting at first and possibly difficult to accomplish. Yet, for owners determined to restore their distressed hotels to profitability, each of these strategies must be employed.
The fact is that with everything owners and managers have to do on a daily basis while trying to keep a floundering establishment afloat, this plan is very effective.
There are quality hotel management firms that are staffed by skilled professionals who offer comprehensive services to help a hotel get back on its feet and can take over managing operations to the extent that the owner feels necessary and can continue to provide a variety of services or consultations after the hotel has recovered.
It is important to research any hotel management company to determine if the company has an established record of successfully achieving the goals and objectives the owner has set for their hotel. While examining the online presence of various companies, it becomes quickly apparent which are the most highly regarded hotel management firms available and which best meet the needs of a particular establishment.
Where to Find a Qualified Hotel Management Consultant