As we get down to the final days of 2016, many have already compiled their resolutions for the coming year. Whether you’ve already done so, or (like us) haven’t quite gotten there yet, we’d like to add some thoughts to the list of possible “must do’s” for the coming year.
1. Resist Temptation: This is perhaps the most important resolution of them all. Resist the temptation to join the ‘race to the bottom’ that so many of us have been caught up in during 2016. When one of our distinguished colleagues/competitors enacts a strategy to try to stimulate demand by lowering price (really???), many of us have historically followed such a trend. For 2017, ‘just say no!’ There will always be someone to argue that their strategy of dumping rate makes them more profitable and more successful. Rather than engaging in this debate, take the high road, stick to your guns, and watch them suck up all of the low-rated business in the market, leaving more premium customers for the rest of us. Trust us, it works!
2. Cutting Costs is Not Growing Business: As Robert Cross, Chairman of Revenue Analytics, said so many years ago, “growth comes from the marketplace, not the workplace.” What does that mean for us? It means that when we go through periods of softer demand or even outright market downturns, while we certainly need to manage costs and expenses much more closely, we cannot truly grow our business by relying on reductions in payroll and/or services. Rather, we must challenge ourselves and our teams to work harder to come up with strategies and tactics designed to reduce the loss being experienced by our marketplaces.
3. Grow Market Share Even In A Down Market: do we all clearly understand the meaning of market share? It is absolutely possible to win the market share or RevPAR Index game when all around us are declining. In a market that is losing RevPAR, your ability to lose less RevPAR means that you are winning the market share game. Let’s face it, ours is a cyclical industry, and markets will contract just as they will expand. The measurement of our success is not necessarily growing RevPAR, but it most certainly is gaining RevPAR Index. It’s vital that property leadership teams understand this distinction, and practice tactics aimed to make it a reality.
4. Activate Your Assets: Whether a guest really plans to have a glass of wine in your lounge or dinner in your restaurant, one can be assured that these things will not happen if these outlets are closed, or are devoid of any activity. A wise person once said “you have to spend money to make money,” and this adage still rings true today. Put yourself in the role of the guest; you’ve just arrived at the hotel, you’re hungry, you dread the idea of locking yourself in your room for the night. Is the empty, brightly lit, music-less hotel lounge or restaurant really an option, or should you walk down the block to see what else is out there? Increasing your capture ratio of in-house guests translates directly to improved revenues, but you need to have a well-laid plan in order to accomplish this.
For many markets, 2017 will represent the most challenging year that our industry has faced in the recent past. The power to resist the tendency for history to repeat itself by our doing the same things and expecting different results resides completely with ourselves. For the new year and beyond, challenge yourselves to resolve to work smarter as well as harder to maximize all opportunities.
Your new year’s strategy isn’t something that you set a few months ago and now put into place. Rather, it is an ongoing and highly dynamic plan to take advantage of ALL scenarios that present themselves. Are you and your teams resolute in your commitment to this approach?