In recent weeks we have attended numerous debates on how and when the crisis will end, while each government tries to implement the appropriate measures to overcome these circumstances in the best possible way. Still, the uncertainty continues, and we can only speculate about the future that lies ahead and be aware that recovery will take place at different rates in each destination.
What we can do is use our time wisely and continue preparing ourselves to return with all our strength, demonstrating the knowledge, preparation and experience of the great professionals who make up our industry.
We have already talked about inventory and pricing. In this new edition, the experts at Beonprice want to remind you that, although we already know that you are constantly on the lookout for news, you should not lose sight of your marketplace and its evolution. We hope the following recommendations can help you:
Follow the news at macro level
We know that you are very aware of the news about the global pandemic. It is interesting at this point to closely follow the recovery in China. This was the first country to be affected by the pandemic and will be one of the first to emerge from the crisis. Do not lose sight of the economic indicators and the occupancy trends, as they can be precursors to what will happen in other countries. We can already see news about the start of the economic activity and hotels in Wuhan.
On the other hand, we must monitor the evolution of activity in airlines, and the continuity of travel restrictions in each feeder market. Tourism in any destination depends largely on its accessibility, and therefore we must be aware of transport to have an idea about how the market will behave in the coming months, and be able to react in time when something changes.
EIt is interesting to have market analysis and benchmarking tools, such as STRwhose regular reports can be of great value at this time.
But don’t lose sight of the micro-level
How is the situation affecting your country and your destination? What restrictions are there? Are there any forecasts about the return to activity? At the local level, it is interesting to analyze what actions are being carried out in close by, such as associations of entrepreneurs, hoteliers, or solidarity activities of which your company may be part, to continue being present in your local market and in continuous relationship with your community.
Analyze whether there is a possibility of creating strategic alliances with the properties around you, both for activities in the community and with a view to reopening, as well as the relationship with customers, suppliers and local and central government. It is time to show the solidarity that characterizes our industry..
On the other hand, talk frequently with your colleagues in the sector. Many times we make the mistake of considering other properties as enemies, when the reality is that we all have similar objectives and teamwork is always more efficient. It will help you to know what condition others are in, who has had to fire their employees and what rehire plan they have, when others open and who cannot open yet. We are very aware of demand, but the truth is that changes in supply in your immediate environment will also condition your decisions in the coming months.
Beonprice's competitors module makes it easy to monitor which hotels are open and which hotels are closed. This is quite useful as provisional information, but don't forget that some competitors with several hotels in the same city may physically close some of the hotels, but still be open in the distribution channels, and then walk the reservations away to the properties that are still open (in countries where hotels have not closed by government order).
Check your potential competitors and substitute products
Now is a good time to check if you have correctly identified your competitive set. Many times we fall into the trap of confusing or mixing up our real competitors with our desired competitors..
The real competitive set is the one made up of the properties my clients would go to if my hotel was fully booked - we encourage you to ask this question to your clients through a small survey, you may be surprised by the results.
We can identify our competitors based on different criteria, such as category, product type, available services, location, and price. Many times we do not consider a competitor because their product or category does not fit the target customer, but our customers may consider it a substitute product by location.
On the other hand, we can also identify what the desired competitive set: hose properties where potential clients, who I would like to reach, may go to. We can identify these competitors based on the segment they are targeting, the sales channels and marketing strategies they use, the location or reputation they earn.
In the same way, it is convenient to review the state of the tourist rental market, if you think that it can be a substitute product for your client.
Positioning quality / price
The relationship that exists between the overall quality of each property and the selling price level, determines your positioning in the market within a particular competitive set. In this regard, we recommend that you review your procedures and standards and consider how you are going to return to them and what you are going to change or maintain when the activity rebounds.
At Beonprice we understand overall quality as a combination of objective quality, that is, all those features and services that make up the hotel; the expected segmentation, since each segment has different quality expectations; and online reputation, understood as the guest’s perception of quality. At this time, the customer's expectations will take into account the hotel's health security and cleanliness. These parameters will configure the concept of hotel quality differently for a while, and how we respond to expectations will make a difference. Indicators such as the HQI™ facilitate the consideration of these expectations to discover the willingness to pay of each segment and the probability of sale for each price level.
We insist on the importance of the added value that you can provide to the client, to reduce the price sensitivity of the demand and thus be able to position your property, within the competitive set, in an optimal position that matches with what each segment is willing to pay. Bear in mind that this will also affect the overall experience of the destination for the traveler and will enhance the loyalty of the different segments.
Use reliable sources of information
Finally, we recommend the use of Google alerts, which can be the best friend of any Revenue Manager. By scheduling the keyword search on a regular basis, you stop spending time searching every day or every week for news of an event, the current economic situation of the destination, natural phenomena, etc. You only need a gmail account to activate it and receive your notifications either daily or weekly.