How to increase hotel occupancy during slow periods or recession
There’s no sugar-coating it: the COVID-19 (coronavirus) outbreak is having a serious impact on the $1.7 trillion global travel and hospitality industry.
Skift Research found that nearly a third of U.S. travelers have deferred their travel plans due to the outbreak. Major conventions and citywide events like South By Southwest (SXSW) have been cancelled; hotels in the hardest-hit regions are closing or sitting empty; and airlines around the world are being pushed to the brink of bankruptcy.
According to Bloomberg, it’s the “biggest setback for the travel industry since a downturn that accompanied the 9/11 terrorist attacks in 2001 and the SARS outbreak and the war in Iraq two years later.”
Phew. Deep breaths everyone.
What can we do to increase hotel sales during a low season we never anticipated?
First and foremost, don’t panic. This article details a ton of different marketing ideas used by hotels to increase occupancy rate during challenging times. We know that surviving a low demand period or even a recession is not impossible. The hotel industry will recover. The key is to keep calm and clear-headed about your plans.
If you want to know how to increase occupancy in a hotel right now, you need to think long-term — and remember that this too shall pass.
*Heads up, this post contains links to products or services I recommend, which I may get commission from.
1. Maintain your service standards
Let’s talk about cost-cutting. It’s probably one of the first things you’re hearing from owners and key stakeholders.
It is absolutely critical that you don’t cut costs in areas that impact the hotel guest experience.
Every low season eventually ends — when this low demand period is over, you’ll have a much harder time recovering your rates if your reputation for service quality has suffered.
Use the slow season as an opportunity to review your SOPs and procedures.
Instead of skimping on your service standards, for example, can you revisit your “green” practices? Look to housekeeping, engineering, and F&B departments for opportunities to reduce waste, water usage, and/or electricity.
By the way, that challenge should extend to other departments, like Sales and Front Office, too.
During times of uncertainty, customer service is more important than ever.
Keep your team updated on all things COVID-19, particularly your policies regarding changes and cancellations. Understand that your hotel guests will have a lot of questions — really, don’t we all — so proactive, honest communication is key.
2. Don’t cut your marketing budget
Another item that’s often on the chopping block during downturn? Marketing.
Heavy sigh.
As a marketer, yes, I’m obviously a bit biased. But I’ve also seen firsthand how cutting a hotel marketing budget can be a knee-jerk reaction that bites you in the ass down the line. (Pardon my French.)
During a low demand period or economic downturn, smart hoteliers play the long game.
Instead of stopping your paid media spend entirely, consider re-allocating your hotel’s digital marketing budget to different source markets or non-rooms revenue streams.
With dining outlets, you can capture guests already in-market by running ads on search engines, online booking platforms like OpenTable, Bookatable (UK), TripAdvisor, and Yelp, or through social media platforms like Facebook and Instagram.
The same goes for promoting your spa. Pivot your online marketing strategy to focus on capturing local residents with a compelling offer, and consider narrowing your targeting to users already in your geographic area.
Investing in non-paid media is important, too.
I talk a lot about how hotel SEO is a long-game and in times of economic downturn, that’s more important than ever.
Now is a great time to review your search positioning: How do you stack up against competitors? Where are the gaps in content? In terms of technical SEO, have you dotted all your i’s and crossed your t’s?
There are a few different (mostly) free tools that hotels can use to review their search positioning. Two of my favorites are Moz Keyword Explorer and Ahrefs Site Explorer, but you’ll have to fork over some dough if you want to unlock all of their most useful features.
If you’re an independent hotel, not part of a big chain that pays for a pricy hotel SEO tool, managing your search strategy can quickly get expensive and overwhelming.
That’s why KeySearch* is my go-to recommendation for the most user-friendly and affordable keyword tool for hotels.
Sign up for KeySearch here* and get 20% off with coupon code KSDISC.
Then there’s social media…
Few other marketing channels have the potential to connect your brand with your ideal audience like social media. Are you using your accounts to their full potential right now?
If you’re interested in learning more about using social media to stay top of mind with future hotel guests, check out my free hotel social media training below.
3. Niche down your audience
When cost-cutting happens, non-essential corporate travel is one of the first things to go. If your hotel has been focused on reaching business travelers or capitalizing on the “bleisure” trend, you might want to rethink.
That applies to the source markets you target, too.
In terms of geography, that could mean re-allocating spend to reach markets within driving distance versus flying.
It could also mean looking closer to home! How are you reaching people who live or work in your destination already? What can you offer them in terms of a staycation, dining experience, or spa promotion?
When I say “niche down” I’m also talking about demographics.
Millennials and/or Generation Z, for instance. Even in uncertain times, younger travelers still show booking intent due to the emergence of competitive flight deals (domestic and international).
Which brings us to the next tip...
4. Discount at your own risk
It’s tempting to slash prices right now, but I urge you to reconsider.
Years of steady rate growth can be undone in a matter of weeks or months. It can also take years to fully recover from aggressive discounting, from both a consumer brand perspective and in your corporate negotiations.
My advice? Revenue management should maintain your public-facing “rack” rate as much as possible.
In other words, keep a close eye on your channel manager. Ideally, this should be synced up with your property management system (PMS) so your rates and availability are always updated.
Instead of straight-up discounting, consider repackaging. Sweeten the deal, so-to-speak!
Work closely (and directly) with your discount rate programs and get creative with your inclusions or add-ons.
Anyone can offer breakfast or “3rd night free” rooms packages. What can your hotel provide that’s unique and adds perceived value? What you can you build in to your online booking reservation system as an added upsell?
Maybe it’s a daily Happy Hour for guests or a complimentary 30-minute massage.
Upsells and packages are among the most effective strategies to increase hotel revenue and occupancy. They can prove enticing to consumers during critical need periods — and often cost very little to execute.
5. Explore new revenue streams
It should go without saying, but hotels can’t solely rely on putting heads in beds. When your hotel occupancy rate is down, you need to look elsewhere for new revenue streams.
In a “normal” low demand period, there are lots of ways to create ancillary hotel revenue.
You could create a coworking space on property, host a local farmers’ market, offer an elopement or unusual wedding package, or even market your property to wellness retreats.
Of course, COVID-19 presents a number of barriers to the above... so we’ll just have to get a little more creative!
Every property is different, but here are a few ideas for ancillary revenue streams for hotels:
Retail - If you don’t already, start selling gift cards or vouchers for future stays. You could also try selling your own line of luxe toiletries, new bathrobes, or homewares.
Pop-Ups - Test the waters with offering a seasonal beverage or simple food item for sale in your lobby. Make sure it has a strong presentation; the more Instagramable, the better!
Transportation - Depending on what your market demands, you could offer paid transportation services to/from the airport, train station, or popular local attraction.
Amenities - Get creative with small add-ons at the time of booking, like a romance amenity of champagne and rose petals, or even a kids amenity pack like coloring books and a teddy bear.
Another tip? Tap local partners.
If tourism is down, chances are, other local businesses are suffering too. Get together with local business leaders and brainstorm ways to help one another, whether it’s through referrals, special offers for guests, or creating package deals.
6. Do a little spring cleaning
If you’ve worked through the tips listed above and still find yourself with a bit of time on your hands, you may as well do a little spring cleaning!
What I mean by “spring cleaning” is using the slower period to work on things you don’t always have the time for — or aren’t always willing to make the time for.
This could look a little different for every hotelier, of course.
For some, this could mean spending time on employee training and skills development, or even refreshing and reviewing your service standards.
If your website hasn’t been touched in ages, now is a good time to audit your existing content and find opportunities for improvement. (Psst. I can help you with that.)
Same goes for your social accounts and online listings! Spend some time capturing new images or video. Go through your listings to make sure everything is filled out, accurate, and up-to-date.
The coronavirus outbreak is challenging both the global economy and the hotel industry, for sure. But as with any recession, downturn, low demand period or slow season, things can and will recover. While it’s pretty hard to completely recession-proof your hotel business, there are many ways you can take action now to lessen the negative impact.
To recap, here’s how to increase hotel occupancy in low season:
Maintain your service standards.
Don’t cut your marketing budget. Instead, reallocate spend to align with your new strategy and invest your time in long-term growth channels like social media and SEO.
Niche down your audience. Know that your typical hotel guest and business mix is going to change.
Discount at your own risk. Create rooms packages and upsell add-ons instead.
Explore new revenue streams.
If you’re interested in learning more about using social media to stay top of mind with future guests, the Hotel Social Media Masterclass was created specifically for hoteliers.
You can also get a little sneak peek at what’s in store by watching my free hotel social media training. Click below to watch the free class!
*Heads up, this post contains affiliate links. If you decide to make a purchase using my link, I’ll get a small commission at no extra cost to you. I only recommend products and tools that I use and love. Thanks for supporting my business — and iced coffee habit.
WHAT TO READ NEXT:
Hotel Recovery Strategy Ideas to Prepare You For Reopening During COVID-19
Marketing During a Crisis: 11 Things Hoteliers Can Do Right Now
Hotel Marketing Trends That Are Here To Stay, Beyond COVID-19
Updated: September 2020