At the time of writing the past blog in mid-December, my expectation was that there would be a full lockdown in January and I was not surprised with the announcement later in December.
What has perhaps surprised me is the continual uncertainty of re-opening dates. As I write, it does not appear that we will be any the wiser until later on this month, with the potential of April, or even May opening a distinct possibility.
With clients having been shut since early November (and opting not to open in December), this represents the possibility of being shut for 6 consecutive months.
A current consideration is how to approach the forthcoming Spring and Summer months. Loss of revenue needs to be accounted for, but at what rate? Getting the balance of a realistic rate that is profitable with a decent occupancy is absolutely key. With this rate, what should we base VAT on? Perhaps it will increase, but maybe in increments and not just reverting back to 20%.
A real hope though for leisure based properties, is a bumper summer. Some coastal hotels are already seeing strong booking levels for July and August in particular, but will this transpire nationwide? At this stage in early February, my view is to prepare now and:
- Load all rates right through until the Autumn and consider flexing immediate months now, rather than just leaving at a blanket rack rate
- Work out the cost base and percentage of profit wishing to be obtained
- Undertake your calculations with various VAT percentages, ensuring suitable profit at 20% VAT
- Take a close look at OTA inventory, contract commitments and commission levels. My view is to close-out OTAs for July and August as a minimum criteria to drive the direct sale. Inventory can always be opened up nearer these summer months.
- Get your direct rates on metasearch to compete with the OTAs bidding on your Google profile in particular. Once hotels are open I anticipate aggressive meta feeds with OTA rates dropped as they squeeze their own profit margins to lure consumers onto their own websites (and subsequently present your property and your competitors!)
- Hold your nerve. Create appealing packages and consider added value – but don’t discount the summer months. Consider April to June carefully and any Covid restrictions subsequently put in place, pricing accordingly to entice guests back into your property
The above bullets are just some immediate considerations. With all these, communication is absolutely key. Audit the website, regularly email the guest database and post via social channels.
Another key and perhaps less of a focus for marketing remits, is the property website booking engine. Try and break it, look for bugs, check the image gallery, carefully review the checkout page, try it on mobile, establish figures from Google Analytics on the booking engine (and not just the property website).
The OTAs have really mastered booking engines, knowing that independent hotels can slip up here, enabling the OTA to execute the reservation. Do you know what your drop-off is from your booking engine and therefore what your conversion rate is?
Innitiate can take forward for you and fulfil all elements as an extended team member at the fraction of a cost of using an agency or adding a marketing position to your payroll.
Stephen Callis | stephen@innitiate.co.uk