Why Are Hotel Proprietors Like Ostriches?

29th August 2006 (Last Updated August 29th, 2006 18:30)

Effective marketing strategies are a good way of increasing the revenue of a hotel or hospitality business. Michael Cockman explores the issues that hotel owners need to confront in order to improve their profits.

Why Are Hotel Proprietors Like Ostriches?

Ostriches have a very loud voice, either a hissing or a booming roar. While they eat they are on the constant lookout for predators and they can run very fast when the need arises. Maybe some of these attributes seem familiar, but why do they bury their heads in the sand?

“The only preparation for driving revenue is a thorough analysis of your total marketing effort.”

The one major lesson that I have learnt during my dealings with hotel owners is not to mention the word ‘marketing’. It seems to be a rude word and it usually involves spending £10,000 on advertising. Or it is attached to the word ‘consultant’ and involves the same sort of expenditure but with nothing to show for it except maybe a fat report that gathers dust on a shelf. Yet what most hotels could do with is actually more marketing, and definitely marketing that is relevant to your particular business.

INCREASING REVENUE

My experience of many owners is that a typical response to problems around the need for extra revenue is one of the following:

  • Appoint a manager and hope that they will take the problems away and solve them for you – this never or rarely works since the owner is constantly looking over their shoulder and they soon feel disempowered and leave, usually very disillusioned
  • Cut costs, reduce staffing and even maybe take over the chef duties yourself – this is a recipe for disaster since the owner is the only person who can drive business development and they certainly can’t do this after a full shift in the kitchen
  • Do nothing, hope that it is only a blip and things will get better – this may be the case, but you cannot afford to wait and see if it is a blip or a trend

However, the only realistic and effective action to take if your profit and loss is looking weak is to increase the top line revenue, assuming margins are satisfactory and customer service is good.

The only preparation for driving revenue is a thorough analysis of your total marketing effort. You need to look at all the issues concerning how your business is presented to your target market. Where should you start?

CRITICAL ISSUES

Start with a vision. Exactly what are you trying to do? How does food feature in your total offer and what sort of atmosphere are you trying to create? Consider your pricing policy and your attitude to value for your guests.

Next, establish what your goals are. Are you looking to sell the business or the lease in the near future? Do you want to have more time off? Are you trying to raise more funds for further development?

You then need a team to help you. What jobs need doing – have you written down exactly what is expected from each team member? How do they participate in the profit? If you team involves family, how do they relate to non-family team members?

What customers do you want to attract and how can you find groups of them to promote to? What do they need from your hotel? Are these potential guests nearby or are they overseas?

“If you carry on doing what you have been doing in the past, you will get exactly the same results.”

Think about whether your product suits these identified target customers. Are your facilities what they require? Do you have a thorough understanding of your competitors, and have you sufficiently differentiated yourself so as to be memorable?

What channels can you use to reach your market? How important are the various intermediaries? Can you rely on direct sales, or do you need help from agents? How important is the internet to your business – is your own site optimised to sell from?

How can you reach your prospects? Will advertising work and can you achieve it all by direct contact? Do you need a sales specialist in your team or are you going to allocate time to drive the business forward? Direct mail and e-mail work well but only if you have good databases. Editorial publicity is excellent and free, but you need to have or develop something newsworthy.

What promotional material do you need to support your efforts? Will one brochure do it all or should you consider support material for your different products and customers? Who is going to help you with text writing and design? Good design has only to be done once and lasts for years.

How do you set the right price for your offer? Is it good enough to follow your local competition – is the local budget hotel really the best benchmark for this? How do you make sure that you coordinate all the various offers and special deals?

Have you set up the right procedures and systems so that you maximise all the potential from customers that make contact with you? Are you losing opportunities? Do you constantly monitor levels of guest satisfaction, based on the priorities of your guests? Do you have a system for collecting favourable comments and using them to promote your business?

Have you analysed all the opportunities for increasing revenue? How do you convert leads to sales? How do you increase the average spend and how do you try to get guests to come back more often?

Does everyone in your team know what the aims of the business are? Have you written it all down so that everyone knows what is going on and can make their correct contribution? Action plans need only be one page but everyone must contribute and understand their importance.

Even if you do know this already, it is not that easy to take time out to fully analyse your business and make some relevant changes. What is certain though is that if you carry on doing what you have been doing in the past, you will get exactly the same results.

In actual fact, ostriches do not really put their heads in the sand. When the female is in her nest and sees a threat, she presses her neck flat on the ground. If you are under threat, you need to do exactly the opposite; new business will only come if you get up and roar your head off