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  • BezlaLLC
  • Revenue Management Strategies during an Economic Downturn or Global Financial Crisis August 24, 2020|Hotel Marketing How should you manage your hotel's revenue during a financial recession? This question is very topical at the moment, given the COVID-19 pandemic and its felt impact across the hospitality sector. It can understandably cause quite a lot of panic, mostly because a financial crisis thankfully doesn't happen that often. Now is the best time to be prepared and get creative so you can minimize the impact of the economic downturn on your hotel business. Firstly, keep an eye on your competitors. We advise this time and time again, but it could not be more relevant today. It is one of the easiest things you can do as a revenue manager. Look at what actions your competitors are taking and decide if it is something worth doing for your hotel. Remember, it is better to learn from other's mistakes so that you can avoid making your own. Secondly, online travel websites are a great solution to consider if your hotel does not already use them. As the market becomes ever more competitive, guests are more selective about where they choose to stay. Many turn to websites that allow them to compare hotels easily. These websites often come with a small fee, which may have made you hesitate in the past. Now is the time to seriously consider investing in them and adjusting your pricing accordingly. It may also be worth checking out websites that you have considered in the past to see if they have reduced their prices. For example, the cost per click of Google AdWords has come down significantly since the outbreak of coronavirus earlier this year. Another thing you can do is to capitalize on the strengths of your hotel. It is something that often gets forgotten in the panic of an economic downturn. Ask yourself what makes your hotel unique and how you can use this to your advantage in the current time. For example, because of the COVID-19 pandemic, many people want to avoid densely populated urban areas that typically have higher risks of catching the virus. If your hotel is in a more rural location, promote how much space your property has and how this makes it easy to observe social distancing compared to inner-city hotels. Another factor to consider is how far guests can travel to your hotel. Generally, guests choose not to travel as far. There is certainly no exception to this when it comes to the COVID-19 pandemic, where regional and national lockdowns have prevented guests from traveling across state and international borders. For this reason, it might be a great idea to bring your marketing strategy a little closer to home and advertise to locals who are more likely able to access your hotel. Another equally important matter you should look into is your booking terms and conditions. Every hotel has them, but many are left untouched for years. An economic recession may be the best opportunity to review your booking conditions. With all the uncertainty that comes with the COVID-19 pandemic, guests are checking the fine print a lot more closely and are paying more attention to things like your cancellation policies. If your hotel offers more flexibility during the booking process, it could give you that much needed competitive edge. There are lots of ways hotels already provide value-added features, so make sure you use these to your advantage, too. Your hotel might not have always offered a complimentary breakfast. It is well worth considering now because it is through incentives like this you can keep as many rooms occupied as possible. There are many more strategies used to counteract the effects of a financial crisis, but these are some of the main ones. Be careful not to do everything at once. For example, flash sales are a proven technique for filling up rooms but bear in mind that other hotels will also be taking the same approach. Always look for promotions that make your hotel stand out. If we can be of any with your hotel revenue management, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • Top 10 reasons why hotel investments fail August 17, 2020|Hotel Marketing Business failure in the hotel sector is almost always avoidable. Arm yourself with the right knowledge so you can avoid the top 10 reasons why hotel investments fail. 1. A lack of investment into people and property It is easy to think that the less you have to spend on paying staff and maintaining your hotel, the more you will gain in profits. On the contrary, it can end up losing you more money in the long term. If you do not maintain your property to a high enough standard, guests are less likely to give you good online reviews, which can then impact your future sales. Additionally, if you do not regularly maintain your hotel, the working environment would be less appealing to staff, which means it would be harder to employ and retain the right people. 2. Inflexible management The crucial thing to be mindful of is that the hotel industry is always changing. You cannot afford to stand still. You have to take a flexible approach to manage your hotel business. It involves keeping yourself educated about the latest technologies, products, and market trends and implementing them into your hotel business. The benefits of keeping up with change will likely trickle down to your staff teams, too. It can end up making their work more efficient and productive. 3. Not enough working capital reserves It is a fundamental but critical truth. If your cash flow turns negative, your hotel must go into liquidation. You can risk losing your hotel business. The obvious way to avoid this is with proper financial planning. Have back-up plans and stress test these plans under multiple worst-case scenarios. For example, hotels that operate heavily as seasonal businesses need to have market cycle plans. As a rule of thumb, have an adequate working capital to cover the next 12 months' worth of liabilities. 4. New competition disrupting the market Development in the hotel industry tends to happen in steady waves. Sometimes major developers come in and invest in large projects. It creates an influx in hotel rooms, which can offset the balance between demand and supply. Ultimately, this will lead to a reduction in hotel room value across the market. The solution here is to be ready for when these new hotels open. Your hotel's pricing strategy should likely reflect a reduced room rate based on the changes in the market. In some cases, this may cause a hotel to become unprofitable. If this is the case, the only option is to sell the property. Be decisive and make quick decisions to avoid losing more money over time as newer properties open. 5. Getting overwhelmed by your costs Large-scale scale construction and renovation projects carry high costs, which can make or break the success of a hotel. The trick here is to use the people around you to your advantage. Get your team members to review your plans and specifications. If your hotel is a franchise, ensure that your franchisor has the opportunity to review the final budget before you start construction work. Another tip is to make timelines your best friend. Ensure that you follow timelines for each contract because if a project overruns its deadline, it will almost certainly end up costing you more money than planned. 6. They are over leveraged with expensive capital When investing money into your hotel business, it might be tempting to borrow as much money as you can to maximize long-term returns. Generally, the more money you borrow, the higher the interest rates you pay. It leads to a higher cost. Be sensible and have a disciplined approach to borrowing and investing. Remember, a lower return on investment is better than no investment at all. 7. Making poor underwriting assumptions When presented with sales contracts, you must read them. Do not ever assume anything and always ask the right questions if you are ever not sure of something. It seems obvious, but you would be surprised about the number of investors who do make this mistake. It is not just contracts that you should avoid making assumptions on; it is on every aspect of your hotel investment. Never assume that the hospitality market will stay the same. Skilled investors make decisions based on their knowledge of the market and how they think it will change over time. 8. Location Hotels fail if they are in a weak location. It can change over time depending on its proximity to transport networks, tourist destinations, entertainment values, and a range of other factors. Whether you are selling a property or looking to make a new investment, a hotel's location has a significant impact on its market value. Carefully consider location in the construction process as many aspects of the hotel can be changed after it has been built but not its location. Avoid barriers to entry where possible. A lack of development land may also pose a barrier to expansion. For example, a hotel surrounded by undeveloped land has an opportunity to expand and offer value-added services over time. 9. Being victim to the market cycles Average values go up and down over time based on a range of market factors. It can be frustrating because these factors are out of your control. Hotels, however, have a track record of rebounding back up in value after they have fallen. In some cases, the rebound value can end up exceeding the original value, too. A great way to look at this is to compare it to stock market trading. There are good and bad times to buy and sell. The hotel market is no different. It is easy to spot the signs of where you are along the hotel market cycle. For example, if construction projects are frozen and borrowing becomes more difficult, this typically means you are nearing the bottom of a market dip. 10. Not having the right people in your business The hotel business is largely people-driven. That is why employing staff is costlier for any hotel business. It is tempting to keep costs down as much as possible, but you risk not having the right people working for you. Take the time to recruit the right people for the job. Make sure you have a thorough recruitment process. The important things to consider in hiring are experience in delivering similar projects, a strong track record of success, readiness for any challenge, and awareness of how their role fits into the bigger business context. If you want to know more about hotel investment, or if you need help in making investment and management decisions, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • Should we offer flat or dynamic discounts for local negotiated rate accounts? August 10, 2020|Hotel Marketing If you have an LNR account, say a university or hospital in your area that is producing room nights within your market, you can start a referral partnership with them so that they will refer guests to your hotel. If the guest mentions the name of the LNR account that referred them, the guest will get a discounted rate. Set up a referral program that is a win-win for everybody involved. Offer your referred guest a discounted rate, which will not lower your hotel's ADR. If your LNR account cannot commit to a certain number of room nights and if they cannot sign an agreement with you for the whole year, offer them a dynamic discount instead of a flat rate discount. Why? Let's say you offer referred guests a $99 flat rate. On dates when you have high occupancy, and you are trying to push for a higher rate, you cannot offer a room at a $99 flat rate because it will lower your ADR. To avoid that situation, offer a dynamic discount, say 10-15% from your best available rate. When referred guests come in, you don't need to turn them down, and at the same time, you are increasing your overall ADR and revenue. If you want to know more about hotel referral programs or if you need help in setting up a hotel marketing strategy, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • How revenue managers should spend their time with STR data ? August 3, 2020|Hotel Marketing Data from your STAR report is valuable intelligence data that is often overlooked by many revenue managers. They assume that STR data from the previous year is no longer relevant in the future. That is wrong. You should look at your STR data to develop your next competitive revenue management strategy. Looking at your STR data is a much more difficult task than it sounds. Here are four simple steps on how to look at your STR data and use it most effectively. Step one is to look at your STR data. It is a common mistake for hoteliers not to look at their STR data in full before they dive into action. Read your reports from start to finish. Get a grasp of your hotel’s long-term performance against your competition for the past year to the last three years. Step two is to spot the trends in your STR data. You want to be looking at your strengths and weaknesses concerning your occupancy rate, average daily rate, and revenue per available room. Is your hotel performing better or worse than your competition? Is a particular day, week, or month performing better than others? Step two should take you the most amount of time just because it can be labor-intensive to identify trends, compare year-on-year numbers, and make conclusions about your observations. Once you have done steps one and two, it is time to start taking action, which is step three. Develop your revenue management strategy based on your STR analysis. It is the time when you ask yourself why your numbers are the way they are and what you can do to improve it. When making your strategies, do not just copy what your competition is doing. Back it up with evidence from your STR data. Step three requires synergy across your sales, operations, and marketing departments. You should come together as a group and make an evidence-based decision about changes you need to implement to improve your revenue and profitability. Finally, step four is to monitor the impact of the changes that you have made based on your STR data. Monitoring is important because you need to be able to know if the changes you made have gone well or not, and whether you need to retain or reverse them. Step four feeds back into step one, which is to look at your data again. If you are monitoring the impact of your changes, you are also looking at your next STR reports. That starts the cycle all over again. It is a never-ending process, and it keeps you going to see that the changes you have made yield your desired results. That is the four-step STR data analysis and how to use it effectively. Remember, look at your data, spot the trends, take action, and monitor the impact. If you want to know more about STR data analysis or if you need help in setting up an STR management strategy, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • Occupancy vs. ADR: Which is the biggest influence on a hotel's bottom line? Other hotels in your local market could have a RevPAR of $80, but they could be larger hotels with more rooms or smaller hotels with fewer rooms. Hotels can have the same RevPAR, but they are performing very differently depending on their actual number of available rooms. Thus, use RevPAR along with other revenue management metrics such as your occupancy rate and average daily room rate to get a fuller picture of your performance against the competition. The beauty of RevPAR is that it is purely based on your room revenue. By excluding value-added features like your bar or restaurant revenue, you can focus on your core business. That essentially enables you to decide if you need to adjust your nightly rate or increase your occupancy to get the right amount of revenue for your hotel. If you get your core business right, the success of your other value-added features will follow. The occupancy rate is the percentage of occupied rooms in your hotel at a given time. The higher the occupancy rate, the better for you. You would want to fill as many rooms as possible and as often as possible. To know your occupancy rate, divide the total number of rooms occupied by the total number of rooms available, times 100. If you have 75 occupied rooms out of 100, you have 75% occupancy for the night. The ADR or average daily rate, on the other hand, is how much a room is selling for on average. To increase the ADR, hotels must look for ways to boost room rates. To know your ADR, divide your average room revenue by the number of rooms sold. If you have $20,000 in room revenue and 250 rooms sold, the ADR would be $80. What is the best indicator of the financial performance of your hotel? What has more impact on the bottom line of your hotel? Neither one is an exclusive reflection of the financial health of your hotel. The key is to find the perfect balance for your hotel and to compare your hotel to your competition. For example, if you are operating a value hotel such as a travel lodge or quick motel, you need to look at the rest of the hotels in the market. You might find that your pricing strategy is to have a lower ADR to attract customers who are looking for a good value option. Therefore, you need to drive up your occupancy rates to make sure that you are making money. On the other hand, if you are operating a premium hotel, you will run your hotel the exact opposite way. You might not be too concerned about occupancy, but you will have a higher ADR because there is a lot of added-value features that come with premium hotel listings. The worst thing you can do is totally ignore your occupancy rate and ADR, so it's a bit of a balancing act. To maximize profits at your hotel, always consider both in the equation. If we can help you find that right balance, or if we can customize a winning revenue management strategy for you, call at 888-999-8086 or email support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • What is RevPAR ? July 20, 2020|Hotel Marketing We all know that the core business of the hotel industry is selling rooms. How can you tell if you are doing well in your core business? RevPAR, which stands for revenue per available room, tells you how much money you are making from each room per night based on how many rooms are occupied and how much you are charging for them. RevPAR is the gold-standard metric in hotel revenue management and is used across all hotels worldwide. If you have not been using RevPAR at your hotel, you should start doing it today. Add all of your total room revenue for the night and divide it by your total number of available rooms, whether or not they are occupied. Let’s say that in a 250-room hotel, the total room revenue for the night is $20,000. The RevPAR is $80. Other hotels in your local market could have a RevPAR of $80, but they could be larger hotels with more rooms or smaller hotels with fewer rooms. Hotels can have the same RevPAR, but they are performing very differently depending on their actual number of available rooms. Thus, use RevPAR along with other revenue management metrics such as your occupancy rate and average daily room rate to get a fuller picture of your performance against the competition. The beauty of RevPAR is that it is purely based on your room revenue. By excluding value-added features like your bar or restaurant revenue, you can focus on your core business. That essentially enables you to decide if you need to adjust your nightly rate or increase your occupancy to get the right amount of revenue for your hotel. If you get your core business right, the success of your other value-added features will follow. If you would like to help in calculating your RevPAR or in setting up your revenue management strategy, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • What does Benchmarking mean in the hotel industry? July 14, 2020|Hotel Marketing Benchmarking is about looking at your own business performance and comparing it to that of your competitors to enable you to identify what success looks like as well as what failure looks like. It's a good idea to keep an eye on your competition anyway. If you can identify and learn from other's mistakes you can avoid making your own. Benchmarking relies on real existing data, your sales figures and the sales figures of your competitors, so there's no guessing game and no estimating. This allows you to make evidence-based decisions, whether that's tweaking your marketing strategy or changing your pricing. For example, you own two hotels in totally different locations, America and England. Say the sales figures in your hotel in America went up by two percent from last year and your hotel in England went up by five percent from last year. That tells you on the surface that your English hotel is doing better than your American hotel. Is that all there is to it? Certainly not. Here is where benchmarking comes in to give you the full story. If you look at your competitors in America you might see that the other hotels that you compete against also went up by two percent, which is about the same as your hotel. On the other hand, if you look at your competitors in England, you might see that the other hotels that you compete against increased their sales by 10 percent, which is double that of your hotel. This tells a very different story now. Actually your hotel in America might be doing better than your hotel in England because your hotel in England isn't doing as well as the competition. That is why benchmarking is so important because it allows you to look at your own performance within the context of other competitors. If you need help benchmarking your hotel or setting up a revenue management strategy, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • What does LPAR stand for in the hotel industry? July 6, 2020|Hotel Marketing Believe it or not, they're a lot of hotels that do not track their labor costs, or if they do, they track them inaccurately. Whether you are a small or big hotel, labor will be one of the major operating expenses. Allocate your labor costs properly to maximize your hotel's profitability. LPAR, which stands for labor per available room is a benchmarking tool that gives you a better picture of how much you spend on labor expenses across all your rooms. To calculate your LPAR, add all of your labor costs, including wages, salaries, pensions, and holiday rooms in your hotel for a given period, whether they are booked or not. Let’s say your hotel spends a total of $5 Million on labor expenses annually. If your hotel has 100 rooms available for 365 nights, your LPAR is $136.99. In other words, your hotel spends $136.99 per room on labor. Track your LPAR across different departments in your hotel. Which departments are you spending more on? Does your spending translate to higher efficiency? If your hotel has plenty of rooms, but no full dining and drinking options, your room service costs will likely be higher than your F&B cost. Compare your LPAR with other hotels in your local market. Are you spending more than your competition in the same segment? Does your spending translate to higher revenues? Have some context to know if you are spending more than you should be to achieve your profit margins. Lastly, make the necessary adjustments to your labor spending to improve your profitability. If you want to know more about LPAR, or if you need help in setting up a revenue management strategy, call us at 888-999-8086 or email us at support@bezla.com. #HotelMarketing #BeatTheCompetition #Bezla Bezla.com [more]
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  • How to generate more revenue from BidClerk, Crew, Construction Leads June 16, 2020|Hotel Marketing If you are an economy brand, you should be looking at construction leads or crew leads to generate more revenue for your hotel. To attract this market segment, you need to offer competitive rates. Construction projects often have a specific budget to work with compared to large management consulting firms like McKenzie and Bain that have deeper pockets and unlimited money to spend on hotels. There are a lot of ways to source your project leads. You can check with the local government in your county or city to see what kind of construction projects are coming up in your area. You can also check online lead source platforms like BidClerk, Construction.com, and PlanHub. BidClerk has a rich database of construction project leads. It has complete contact information of relevant decision-makers, as well as project plans and specifications. It allows you to tailor your searches and save them on the platform. While most hotels have BidClerk, they most likely do not use the information there to the fullest. Follow the following tips for you to generate leads on BidClerk and convert them to actual sales. Log in to your BidClerk account and enter your zip code. Search for projects within a ten-mile radius from your hotel. Select projects already under construction, or already been awarded to a company, or already have bid results. Sort the projects by value and date modified. On the bottom of the page, you will find the company handling the project. Check the company area code to find out if it is based out of town or in your area. The farther the company is, the better. It means they will need a hotel for crew coming from out of town. Find out the project cost. The bigger the project is, the better. It means they will have to stay longer at your hotel. Once you have identified your leads, get the companies on the line immediately. You cannot just click the “I’m interested” button and wait for the companies to contact you. Project leads get overwhelmed with requests as soon as a project becomes public. There are a lot of other properties in your area that are doing the same thing. Beat them to it. Be persistent and get in touch with every project lead as soon as you can. Introduce yourself and your hotel. Have a sales call script rehearsed. You need to know the right questions to ask to get the ball rolling. You need to make the right pitch that gives them the confidence to entrust their business in your hands. If you want to know more about commercial construction leads or if you need marketing strategies professionally customized for your hotel, call us at 888-999-8086 or email us at support@bezla.com. #HotelSales #BeatTheCompetition #Bezla Bezla.com [more]
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  • Triple your hotel's revenue with search engine optimization “SEO” June 7, 2020|Hotel Marketing Hotel search engine optimization (SEO) is the practice of increasing your hotel website’s ranking on search engines like Google, Yahoo, and Bing, thus driving traffic and bookings on your website. Let’s say your hotel is in Houston, Texas. Just type “Houston Texas hotels” on Google and hit search. Make sure that you are on a private browser so that Google does not personalize the results based on your search history. Click on the map on the right-hand side of the page. It will open up and show you the hotel properties in your local market. The top two or three properties you see on the first page of Google’s search results have an ad icon beside their property names. That means that the properties spent money on pay-per-click (PPC) advertising and were the highest bidders for that ad placement. PPC bids vary. In some markets with very high demands like New York or Las Vegas, bids can go as high as $20 per click. The organic search results, on the other hand, are ranked below the ads. Make sure your property is ranked higher so that you appear on the first page of search results. You could have the best reviews or the most competitive rates, but if you are not showing high enough on the rankings, chances are no one will visit your website. We recommend that you invest in PPC advertising to ensure that your property is always on the first page. Most online users only look at the first page and are more likely to refine their search rather than move on to the next page. We also recommend that you use hotel SEO to increase your ad ranking. When done correctly, SEO will attract users with the intent of visiting either your hotel or your city, and therefore more likely to become paying guests. Make sure that your webpage title, description, and URL include keywords and phrases that your target audience may likely search. There have been a lot of OTAs in the last couple of years that are competing in the hotel search engine market. The top ones are Kayak, Trivago, Booking.com, Expedia, and its affiliates. Do the same private browser search of your hotel on these websites. If your property name does not come up on the first page of search results, you will have very, very low chances of getting any reservations. If you want to know more about SEO or if you need help in setting up a digital marketing strategy, call us at 888-999-8086 or email us at support@bezla.com. #HotelSales #BeatTheCompetition #Bezla Bezla.com [more]
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