Hospace Conference 2021

10:45 - Short Term Profit vs. Long Term Loyalty
Samantha Williams, Veryan Palmer & Heather Hart
Moderator: Adrienne Hanna


Adrienne Hanna, Samantha Williams, Veryan Palmer and Heather Hart — Short Term Profit VS Long Term Loyalty

  • Should we simply be talking about pricing v reputation?

  • UK hospitality outlets have had massively successful summers, with staycation being the word of the year — especially in rural resorts with skyrocketing ADR’s and incredible occupancy rates.

  • Staffing has remained an issue amongst other things but were we right to push occupancy and continue to do so?

    • Cornwall was completely overrun this year and restaurant bookings and hotel occupancy were through the roof.

      • This was great for business, however, many hotels had to shut bedrooms to cope with an increased volume of guests and reduced staff. This essentially helped to maintain service levels. Working smarter is key for example people don't need their newspapers delivered, they can pick them up at breakfast.

    • The majority of people were understanding however, some were not.

  • Will these same rates repeat next year?

    • A lot of people realised how beautiful places like Cornwall are and will come again next year.

  • What’s happening outside the UK? How did ordinary hotels deal with these challenges

    • A lot of hotels noticed almost a double ADR rate, the challenge that we're seeing now is around loyalty. Mid market hotels have priced out the people that would have returned year on year and people might not be able to afford higher rates due to increased demand.

    • Higher rates come with higher expectations and not all hotels can meet these expectations. The key going forward is not to focus on what happens this coming year, it's about the year after that.

    • Profitroom is suggesting that hotels segment their data to target their database separately, for example people who stayed this year paid a higher rate and they probably shouldnt receive the same marketing as people who came the year before.

    • If you don't make the effort to retain your new guests you will lose loyalty. Targeting these groups separately is key.

  • Guests are willing to pay a higher rate, but expect a service common to pre-covid times.

    • People were forgiving this year and just grateful to be away.

    • Planning and communication is key and pricing by demand is important, however, you have to be able to back this up with good service.

    • Forecasting was difficult this year and is essential as we move forward. Communicating changes in your service to guests is vital so that you set their expectations.

  • Being multiskilled used to be advantageous, do we need this or should people focus on one role?

    • We need both. Customers don't want to see the same person checking them in, making the beds and serving them in the bar. However, being multiskilled within certain areas is a great idea. This also depends on the size of the hotel. It's important not to lose specialisation and this shouldn't be diluted down.

  • Are we moving into a people pandemic?

    • The next 18 months will be tougher in the UK as if people do decide to go off to the med there will be a race to the bottom with rates.

    • Having a strong community is essential, however, recruiting staff will be a challenge. This year a lot of senior teams went back to the floor and obtained a new found respect for some of those entry level positions which is a positive.

  • Will subscription pricing be the new thing?

    • This is a topic that is spoken about a lot. The aviation industry was the first to launch dynamic pricing and hoteliers are already introducing subscriptions into their business but this tends to be for things like golf and spa memberships so transferring this to bed nights will be a different challenge. The guest would have access to negotiated rate plans and reduced prices for extras, however, the question is how this will all come together in the future.

    • Having the right technology in place is essential for this to be a success. Subscription pricing is ok for a brand with lots of different options, it becomes more difficult for individual hotels in a time where people are craving new experiences.

    • In luxury hotels, people tend to love the little moments of sparkle and personalisation e.g being greeted by name etc. This is more important in luxury hotels than the pricing and often is the cause for return guests.

  • There is a buzzword around the industry which is ‘personalised pricing’

    •  What exactly does that mean? Is it personalised product offering more than pricing? You need a huge amount of data and systems to analyse the data to come out with what the recommendations should be. You can not only personalise offers based on what people have done in the past, you can also encourage them to use facilities they haven’t used before.

    • Profitroom has a built-in CRM and integrated digital marketing so they really understand the last time the guest was on the website or the last time they stayed. They are seeing more upsells due to personalised pricing and increased conversions of repeat customers of 13% — this may be down to comfort during the pandemic. Not all customers are triggered by added value, they may be triggered by the price.

  • Is it dangerous to assume what customers are looking for?

    • It’s important not to segment people completely as the circumstances for the booking may change. For example, if someone is charctersided as someone who doesn't book the top end suites, but decides to book one for a 50th wedding anniversary they won't receive the same marketing. Segmentation might not always be correct.

    • There are some hotel styles where personalised pricing would work however, for some it is a lot more complexed.

    • Make sure you're not blanket marketing your database as this will lead to a lack of engagement moving forward

  • To sum up today:

    • The people pandemic will be around for the next 18 months so investing in staff is essential going forward.

    • Technology offers a way to make the future easier.

    • Reviewing operational procedures is essential and stripping back to what you need and eliminating what you don’t need.

    • Buzzwords aren’t always useful for the entire industry; each hotel has their own unique set of challenges.

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