It might not be the end of the world, as some would have us fear, but not having marketing and budget targets set now for 2012 comes pretty close in the cut throat world of hotels.
Unfortunately, a good plan also isn’t created overnight, so ask yourself these questions:
- How far are you with your targets, budget and plan of attack for next year?
- What REVPAR and GOPPAR do you need to achive?
- Is your hotel marketing plan complete?
- Does it describe all actions in detail?
- Does everyone on the team know the objectives?
- What steps will it take to get there?
- Did you make your 2012 budget already or are you right in the middle?
- What methodology are you using?
- Are you simply adding a 3% to 5% each month based on last year’s performance?
- Are you really putting your teeth into it and drilling down per segment, per channel, per account, per day?
The basis of the target or budget lays in a detailed demand calendar. Get a clear overview of what drives revenues each single day of the year.
Map the events, conferences, exhibitions, trade fairs, concerts, holidays, vacations, long weekends, etc through 2012. You will start seeing a clear shift already.
Perform displacement calculations on all segments, channels and accounts to uncover hidden revenue potential.
Incorporate channel distribution cost like travel agent commission, agency fees and marketing investments, payroll for sales, marketing and reservation, to determine the true net value of each segment.
It seems though, however, not everyone goes into as much detail when making their budget. To demonstrate, I will share with you a intriguing story about budgeting.
So we work with many hoteliers, and in this case it relates to the management of a resort.
Hotels in vacation markets for many have been influenced (indoctrinated) by tour operators on how to manage their property. As a result, budgets are made per person rather than per room, meaning that the total revenue objectives become "flexible" if measurement of results does not incorporate enough factors.
In this particular case, management were under the impression the hotel was performing on target as the correct average rate per person was achieved.
Unfortunately the average occupancy per person per room was actually 20% lower than normal, which made it impossible to reach total revenue target, because the average room rate was totally off.
Stick with me here... When we were working through the budget for each month, we noticed that several months had targets at revenue levels below last year. After looking deeper, we were told that some tour operators had informed them they were expecting 10% less bookings from a particular country.
No one ever raised the idea of initiating partnerships with other distribution channels to offset the possible decrease in demand. Capturing more market share, or penetrating new markets was just not in the team's mindset.
Unfortunately this tale is very typical of our industry.
Especially in resort hotel markets, tour operators have for too long influenced hoteliers on how to run their business. Hoteliers need to get more strategic insight and understanding of the financial side of the business. Moreover they have to become more creative in methods to increase the revenue performance of their property.
Franjly, hotel marketing plans in general are too superficial. It is time they are taken to a more professional level, and become complete. Hotels are multi-million Dollar or Euro businesses and they demand an expert strategic and structural approach.
So what are elements you need to incorporate in your 2012 marketing plan?
Taking into consideration the continuing growth of online sales and the quick adoption of mobile technology by consumers, we have put together some questions that will need your attention in 2012:
1. Internet marketing
- How much revenue do we expect our hotel website to produce in 2012?
- What growth are we expecting from 2011?
- What is the balance between print and internet marketing?
- Are we shifting budget from offline to online?
- What is our plan to attract more traffic to our website?
- What will we do to increase more conversion of our hotel website?
- What new online marketing initiatives will we launch next year?
- How will we collect more emails, mobile phone numbers, and FaceBook connections to be able to directly engage with our guests?
- How will we attract our different client target markets and niche guest segments?
- How will we measure the effect and ROI of all our marketing actions?
Furthermore, what will you focus on, how much financial and human resources will you dedicate to:
2. Online distribution
- Website redesign or optimization
- Links from local and travel directories
- Search engine marketing SEM/PPC
- Search engine optimization/SEO
- Banner advertising
- Advertising on metasearch, review websites and travel forums/social networks
- Interactive campaigns/promotions (contests, games, quizzes, sweepstakes)
- Email marketing
- Mobile website
- Mobile search engine marketing SEM/PPC
- Social media marketing / Travel 2.0
- Online reputation management
- Analytics / ROI tracking
- External marketing agency (experts)
- Have you identified new local or international sales channels your hotel needs to be on?
- What are your key segments, niche segments and feeder markets?
- Are there any travel agency channels or forums out there that can help you attract these customer target markets?
- How will you manage to keep a healthy balance between direct and indirect (third party) sales online?
- What is your approach to protect your hotel from brand hijacking by OTA?
- Are your FIT and wholesalers respecting the contract?
- How will you prevent wholesalers to distribute and publish package rates as room only deals on online travel agency websites?
- How will you control your cost of distribution?
- Will we use rate parity as a strategy to drive business through more cost-effective distribution channels?
- Will we guard against cannibalization by costly distribution channels like Flash, Group and Lastminute sales websites?
- Will we let ourselves be caught up website trends and hypes which only lead to an erosion of the hotel’s net rate?
As you can see, many things have to be considered and included in the hotel marketing plan. We need to look at these aspects of the business, and many more, as they influence your financial results.
I hope these thoughts will help you to make a more complete hotel marketing plan for 2012.
NB: For more ideas, visit the Xotels blog.
NB2: Image of 2012 movie from Sony Pictures.