Monthly Archives: May 2009

Nagib’s Corner: Mastering Internet Marketing in 2009

By,

Mr. Max Starkov

Mr. Jason Price

Mariana Mechoso

Evan Rosenblum

Commentary from Nagib Lakhani.

I have taken the liberty of presenting you with the conclusion to this article up front. The highlighted sections represent some of the very key points. I think they make for a very compelling read.

Grab a coffee and clear your mind for some reconsideration of your marketing $ allocations!

(Edited to top from bottom of article).

Nagib.

Conclusions

The survey results show that hoteliers really are “Getting Back to the Basics” in this tough economy – read HeBS’ article on the subject. While there were some interesting results, such as an increase in hoteliers planning on advertising on social media sites, hoteliers are shifting budgets from offline to online, focusing on Internet marketing initiatives that have been proven, are becoming savvier at monitoring their hotel reviews on their own, and in general are embracing the Internet as their most cost-effective, revenue generating tool.

All industry forecasts indicate that in 2009-2010 the travel industry in North America will experience a major decline. GDS contribution is also projected to decrease by several percentage points. And yet, online travel bookings in 2009 are expected to grow by 10.5% and reach $116.1 billion due to channel shift, and an additional 11% in 2010 to reach $128.9 billion (eMarketer).

In other words, this year the Online Travel Channel will be the only growth channel in hospitality and, as the survey shows, many hoteliers clearly understand that. Here at HeBS, we firmly believe that a comprehensive, ROI-centric Internet marketing strategy is one of the perfect “survival tools” for hoteliers in the current economic environment. The direct online channel can help smart hoteliers generate incremental revenues, improve marketing ROIs, attract more affluent travelers and out-smart the competition. For the past 14 years, our experience shows that Internet-savvy hoteliers with robust Direct Online Channel strategies are the winners in economic downturns like this one.

Mastering Internet Marketing in 2009
Here is your key to the current trends in hotel internet marketing
Friday, May 22, 2009

Mr. Max Starkov

Mr. Jason Price

Mariana Mechoso

Evan Rosenblum

How are hoteliers budgeting for their Internet marketing this year? Are they focusing on Web 2.0/Social Media initiatives in this recession? What percentage of business should be coming from your website?In the tough year that 2009 is turning out to be for hoteliers, it is crucial to know where every marketing dollar is being spent. When reevaluating marketing plans – as most of you have had to do this year – hoteliers also need to consider whether or not they should shift marketing dollars from offline to the more measurable online initiatives, what their peers are doing, and how they can evolve with the industry without wasting valuable dollars on unproven tactics.

In the 3rd Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices in Hospitality, HeBS set out to answer these questions and identify trends in online marketing in hospitality. The purpose of the survey was to assess hoteliers’ 2009 Internet marketing priorities and strategies in order to compare with the responses received last year, and to provide the industry with insights on how internet marketing strategies for the hospitality industry are developing.

Who Participated in this Survey?
The survey experienced global participation, with almost half of respondents from the US and Western Europe. Hospitality executives included general managers (20.6%), sales and marketing directors (49.6%), e-commerce managers (13%), and revenue managers (29.8%).

The full spectrum of hospitality and travel verticals are represented in this survey, including boutique hotels, upscale hotels, budget, mid-scale and luxury franchised properties, major brands, real estate groups, resorts, hotel management companies, casinos, and more. Most participants were hoteliers from independent properties; however there was a heavy influence this year of franchise/hotel brand hoteliers.

Main Findings from the 3rd Benchmark Survey

  • Hoteliers strongly believe that Internet marketing produces the best results. We asked hoteliers whether they thought Internet marketing, traditional marketing, or a mix of both produces better results and 55.7% said Internet marketing (up from 49.2% in the 08 survey and 37.7% in the 07 survey). Hoteliers are right on target as the online channel will be the only growth channel in hospitality in 2009-2010.
  • Even in this current economic environment, 63% plan to increase their Internet marketing budget in 09 – and a majority of hoteliers are planning on raising their online budget more than 15%. A larger percentage of respondents this year (33%) will be keeping their 09 budget at 08 levels. Where is the money coming from for hoteliers that are increasing their Internet marketing budget? Fifty-three percent of respondents are shifting money from offline marketing budgets.
  • In the 2009 survey, we introduced ‘the economic environment’ as one of the multiple choice options when we asked hoteliers what factors they will consider in planning their 2009 budget. Not surprisingly, 81.6% of respondents said that the economy will affect their budget planning for 09. We also saw that ‘what my peers are doing’ and ‘industry averages’ had less of an influence on hotel budget planning this year.
  • The types of Web 2.0 marketing initiatives planned for 09 vary greatly from 07 and 08. In previous years, hoteliers selected Surveys and Comment cards as the Web 2.0 initiatives they were planning. This year, hoteliers selected advertising on Social Media sites (i.e. TripAdvisor), creating profiles on social networks and a blog on the hotel website.
  • Almost half of all respondents believe their property does NOT conform to industry’s best practices in terms of Internet marketing. While hoteliers are getting more educated about the direct online channel, many of them do not have the internal resources, bandwidth or knowledge to deal effectively with this highly dynamic field.
  • This year, hoteliers overwhelmingly responded that they thought website optimization produced the best results and the highest ROIs (81.6%). Search optimization – organic search was next at 60.9%. Indeed, both website and search optimizations are the most-cost effective initiatives for hoteliers in this economy.
  • This year, 85.6% of franchise/major brand hoteliers respondents said they did not find there to be major restrictions in online marketing due to brand restrictions. This percentage is increasing over the years (81.8% in 2008 and 76.2% in 2006) as more and more franchisees embrace best practices and launch local Internet marketing initiatives that complement their brand efforts.
  • The percentage of hoteliers who are participating in Paid Search increased from 50% in 2008 to 59.8% in 2009. The use of Meta search and local search is also increasing year after year. Also, Web 2.0 Paid Search (e.g. TripAdvisor) was big this year as 32% of respondents are spending marketing dollars on this initiative. These responses are in par with industry practices and show that hoteliers are aware that as much as 60%-80% of traffic and bookings on hotel websites originate from the search engines.

Where is Hotel Business coming from?

For the past three years, Benchmark Survey respondents have said that most of their business comes from the direct online channel, which is supported by industry data. In 2009, more than 55% of all travel bookings and up to 40% of all hotel bookings in North America will be generated from the Internet (eMarketer, HeBS), which represents a double-digit growth over 2008. At least another third of hotel bookings will be directly influenced by online research, but booked offline. Over 65% of online hotel bookings will come from the direct online channel (76% for the major hotel brands).

However, 2009 survey results also show that bookings made via Online Travel Agencies (OTAs) have increased for hoteliers – from 19% in 08 to 21% in 09. This is in large part due to the dire economic situation many hoteliers are going through. Hoteliers seem to be worried about lower occupancy rates and are providing more and more inventory to the OTAs. What hoteliers are not realizing however is that the OTAs are also affected by the overall decline in travel demand (Expedia reported 7% decline in revenue in Q4 2008) and can help only so much. Therefore the only real growth channel in 2009-2010 is the direct online channel which allows savvy hoteliers to outsmart the competition and gain market share.

Budgeting for Hotel Internet Marketing in a Recession

Compared to last year’s survey, we noticed an increase in hoteliers saying that they have overall budget constraints. Hoteliers are less concerned with what peers are doing now then they were last year (24% in 2006 up to 27% in 2007, and back down to 18% in 2008), and much more concerned with the economy. We saw the same decrease with concerns over industry averages for budget planning (from approx. 40% over the last two years, to 30%). However, despite the economy, most hoteliers are increasing their Internet marketing budgets in 09:

Table A

Do you plan to INCREASE or DECREASE your 2009 Internet marketing budget?

I plan to increase my budget

63.2%

I plan to decrease my budget

3.4%

I plan to keep my budget at 2008 levels

33%

So where is this increase coming from? As expected, over half of the respondents (53%) said they were shifting money from the offline marketing budget.

When asked approximately what percentage of your overall marketing budget was devoted to Internet marketing activities in the past year, most respondents were in the 11-20% and 21-49% range. More people are devoting a larger portion of their overall budget to Internet than they had been in 06 and 07. Year after year we are seeing a shift from lower categories of percentages to higher percentages of money spent on the Internet, although hoteliers are still using traditional media. In this year’s survey results, people that were throwing their entire budget towards the Internet (76-100%), have scaled back as hoteliers discover a better balance between traditional and Internet marketing budgeting.

Once the budget is set, what are hoteliers spending their Internet marketing dollars on? From the table below, you can see that they are indeed spending their money on those formats they believe achieve the highest ROIs. Website design, website optimization, paid search and email marketing consume fairly high percentages of the budget (Table C), and this correlates with those activities hoteliers see as producing the highest returns (Table D).

Table B

Of your Internet Marketing Budget where did you spend your money in:

2006

2007

2008

2009 (projected)

Website re-design/design

18%

22%

19.6%

20.6%

Website Optimization

9%

11.3%

12.8%

13.3%

Strategic linking/partnerships

6%

9.6%

7.5%

7.6%

PPC/paid inclusion (SEM)

14%

8.6%

17%

15.7%

Local Search

3%

3.6%

4.2%

5.2%

Meta Search

2%

2.6%

2.6%

3.2%

Search Engine Optimization

10%

11.5%

8.7%

9.3%

Display Advertising (banners)

6%

6.6%

7%

7.8%

Email Marketing

10%

11.5%

10.4%

11.2%

Consulting Fees

6%

7.0%

5.1%

5.5%

Web 2.0 Formats

1%

3.1%

3%

4%

What Marketing Formats do Hoteliers Believe Produce the Best Results?

What are the Internet marketing formats hoteliers believe generate the highest ROIs?
In the 2007 and 2008 results, website design, website optimization and search engine optimization ranked as the highest revenue generators. For 2009 we saw a decrease in the percentage of people who ranked website design as one of the highest revenue generators.

This thinking is in line with current budget restraints due to the recession. Website optimizations are much more affordable than website redesigns, and often pay for themselves within 3-4 months (as do website redesigns). Unless the website is over 2-3 years old, hotel optimizations can help hoteliers take advantage of the much cheaper organic search related visitors to the hotel website.

Table C

What Internet marketing formats do you believe produce the best results and the highest ROI?

2007

2008

2009

Website design/redesign

62.9%

70.19%

56.3%

Website Optimization

71.9%

68.27%

81.6%

Strategic links to property website from online

52.7%

41.35%

48.3%

Paid Search Engine Marketing: Pay-per-click (PPC)

40.7%

39.42%

56.3%

Search optimization – Organic Search

68.3%

56.73%

60.9%

Display Advertising (banners)

16.2%

12.5%

28.7%

Email Marketing

58.7%

60.6%

51.7%

Email Sponsorships

6.6%

4.8%

4.6%

Web 2.0 Media Formats

16.8%

26%

37.9%

Other

4.2%

2.9%

2.3%

Even though hoteliers are going back to the basics this year, there are a high percentage of hoteliers who believe Web 2.0 initiatives produce results. This is interesting considering that according to Table E below, 15% of respondents are not even planning Web 2.0 initiatives for 2009.

The results make a lot of sense however, in the case of the increase of hoteliers who thought Paid Search Marketing produces the highest ROI. We saw the use of paid search decrease from 07-08, and then saw over a 40% increase in the 09 survey results. This is most likely because more and more hoteliers realize that Paid Search works. According to eMarketer, these survey results are on track for search engine marketing across all industries (not just hospitality), as U.S. spending on search engine marketing will nearly double from $12.2 billion in 2008 to $23.4 billion in 2013.

Brand Standards & Regulations on Hoteliers are Easing Up

For the past two years in the HeBS Benchmark Survey, franchised hotels have responded that they feel there are some major restrictions on their online marketing efforts. However, this percentage has been decreasing year over year:

Table D

If you are franchised or managed by an outside major chain or brand, do you find there to be any major restrictions in online marketing conduct due to brand standards and regulations

2007

2008

2009

No

76.2%

81.8%

85.6%

Yes

23.8%

18.2%

14.4%

Here are some of this year’s responses:

  • “Email marketing is a challenge when past guest lists are under brand control.”
  • “You can’t be as flexible as you need, you don’t spend a lot of money in online marketing because you can’t analyze it as you would [normally] do.”
  • “Hotel website is stand-alone however we have to use the Franchise Booking Engine.”
  • “Limitations of who you can contract with.”
  • “Restriction for hotel pictures loading…restriction for hotel package design and loading.”

So what does this tell us? HeBS believes that there are many online revenue opportunities which fall outside the scope and ‘bandwidth’ of the major hotel brands’ Internet marketing efforts. Even though most of the leading hotel brands have become proficient national and international eMarketers over the past 5-6 years, they cannot possibly cover all the local online revenue opportunities available to the property. As hoteliers are becoming more Internet marketing savvy, they are realizing they can complement the hotel brand’s Internet marketing efforts with their own “Local Internet Marketing Strategy for Franchised Hotels” – read HeBS’ article on the subject.

What’s Ahead for Hoteliers and Social Media?

Social media continues to be a hot topic in the industry, and more hoteliers are looking for the next big thing they can do (without spending a lot of marketing dollars). We asked hoteliers what type of web 2.0 initiatives they were planning for 2009 and compared it to 2008 results:

Table E

What type of Web 2.0 marketing initiatives are you planning for next year?

2008

2009

A blog on the hotel website

14.5%

14%

Photo sharing functionality on the hotel website

12.7%

4.7%

Sweepstakes and contests on the hotel website

9%

3.5%

Survey and comment card on the hotel website

18.4%

14%

Subscribe to a reputation monitoring service

8.4%

2.3%

Create profiles for my hotels on social networks (Facebook, MySpace, etc.)

13.3%

14%

Actively participate in blogs that concern my hotel

12.7%

5.8%

Advertise on social media sites

8.1%

24.4%

I am not planning on Web 2.0 initatives for 2009

NA

15.1%

According to the survey, this year the most important Web 2.0 initiatives were: advertising on social media sites (25%), a blog on the hotel website (14%), creating profiles on social networks (14%) and survey and comment cards on the hotel website (14% – although this is significantly down from last year). Last year, hoteliers selected Surveys and Comments Cards as the most popular option. Another big drop was in the use of reputation monitoring tools, as hoteliers become savvier and realize they can monitor the most popular sites that offer reviews themselves – and for free – read HeBS’ article on the subject.

Conclusions

The survey results show that hoteliers really are “Getting Back to the Basics” in this tough economy – read HeBS’ article on the subject. While there were some interesting results, such as an increase in hoteliers planning on advertising on social media sites, hoteliers are shifting budgets from offline to online, focusing on Internet marketing initiatives that have been proven, are becoming savvier at monitoring their hotel reviews on their own, and in general are embracing the Internet as their most cost-effective, revenue generating tool.

All industry forecasts indicate that in 2009-2010 the travel industry in North America will experience a major decline. GDS contribution is also projected to decrease by several percentage points. And yet, online travel bookings in 2009 are expected to grow by 10.5% and reach $116.1 billion due to channel shift, and an additional 11% in 2010 to reach $128.9 billion (eMarketer).
In other words, this year the Online Travel Channel will be the only growth channel in hospitality and, as the survey shows, many hoteliers clearly understand that. Here at HeBS, we firmly believe that a comprehensive, ROI-centric Internet marketing strategy is one of the perfect “survival tools” for hoteliers in the current economic environment. The direct online channel can help smart hoteliers generate incremental revenues, improve marketing ROIs, attract more affluent travelers and out-smart the competition. For the past 14 years, our experience shows that Internet-savvy hoteliers with robust Direct Online Channel strategies are the winners in economic downturns like this one.

About the Authors:
The HeBS team for this project consisted of Max Starkov, Jason Price, Mariana Mechoso and Evan Rosenblum.

About HeBS:
Hospitality eBusiness Strategies, Inc. (HeBS) is the industry’s leading Internet marketing services and strategy consulting firm for the hospitality and travel verticals. As a full-service Internet marketing and strategic consultation services firm, HeBS has pioneered many of the “best practices” in hotel Internet marketing and direct online distribution. HeBS specializes in helping hoteliers boost their hotel Internet marketing presence, establish interactive relationships with their customers, and significantly increase direct online bookings and ROIs.

A diverse client portfolio of over 500 top tier major hotel brands, luxury hotel and resort brands, golf and spa resorts, hotel management companies, franchisees and independents, meeting and conference venues and CVBs has sought and successfully taken advantage of HeBS’ hotel and travel Internet marketing expertise. Contact HeBS consultants at (212)752-8186 or info@hospitalityebusiness.com.

http://www.hotelinteractive.com/app_images/corner_top_right_hi.gif

Credit

Mr. Max Starkov
Chief eBusiness Strategist
Executives, Principals, or Partners
Hospitality eBusiness Strategies

Bio: Max Starkov is Chief eBusiness Strategist at Hospitality eBusiness Strategies, Inc. in New York City. He advises companies in the Travel and Hospitality verticals on their Internet and eDistribution strategies. His eBusiness expertise is sought after by a diverse client portfolio of top tier multinational hospitality corporations, hotel management and representation companies, and independent, privately owned properties. Max is a highly recognized eBusiness expert in the hospitality … more

Mr. Jason Price
Executive Vice President
Sales and Marketing
Hospitality eBusiness Strategies

Bio: Jason Price is EVP of Hospitality eBusiness Strategies, Inc. in New York City. Jason’s expertise in eMarketing and eDistribution crosses all hospitality business models from flag hotels to independent properties. He also provides extensive business development experience from advising strategic partnerships to capital acquisition, particularly to technology providers in the Travel and Hospitality … more

Mariana Mechoso
Hospitality eBusiness Strategies
more

Evan Rosenblum
Director, eMarketing Services
Hospitality eBusiness Strategies
more

Nagib Lakhani.  RevMax Hospitality Consulting Services

O: (425)677-7866        C: (425)445-7750     F: (866)508-7866

nagib@RevenueMaxConsulting.com
4313 245th Avenue SE
Issaquah, WA 98029

Nagib’s Corner: Stop Using the Economy as an Excuse!

Roberta Chinsky Matuson has some excellent points we often overlook, both during down turns and upturns.

Certainly, the economy has its part to play but a sharp focus on what the guest is responding to, extra effort to recognize and acknowledge shortcoming within our systems and processes can go a long way to mitigating the impact of a slower marketplace.

Take the example of what guests are purchasing – it isn’t just what is cheapest. Quite the contrary, many are very mindful of the value proposition and they will move to a higher quality of service and product if the value package is appealing.

SALES: it’s about VALUE.

HR: It’s about empowering and challenging your department heads, and your line team members, to be creative, to live the culture of hospitality and exemplary guest service.

Remember, it isn’t always going to be this way! Truly, there will be an upturn and there is no time better than now to motivate your teams to raise the bar at every level. Profitability is always higher on the upswing of a cycle than on the downturn. You can make up for some lost ground if your teams are efficient, motivated, guest-centric and unforgiving on the pursuit of achieving the very best that they are able.

Most important – IT STARTS WITH YOU – you lead, you set the bar, employees follow the example. Make this an opportunity.

Enough sermonizing!

Nagib

http://www.hotelnewsresource.com/images/logo.gif

Stop Using the Economy as an Excuse! – By Roberta Chinsky Matuson
Date: 2009-05-20
Industry: -Hotel-Restaurant- Category: Features

Leaders are using the economy as an excuse on a daily basis. Don’t believe me? Just ask your managers why now it’s okay to lay-off those employees who haven’t come close to meeting their performance objectives over the past several years. Perhaps your company could have avoided lay-offs if the entire team had been operating on all four cylinders. This is just one example of how companies are using the economy as an excuse for poor decisions. Here are some others.
Poor planning

You can blame employees for a lot of things. However, at some point you have to take responsibility for what is in your control. Here’s an example. Have you ever heard of a fast food restaurant that sells only pizzas, at an airport location, running out of food at 3:00 PM? According to those employees staffing the counter, this is not an uncommon occurrence. So who is to blame? Certainly not the people who are popping the frozen pizzas into the convection oven.

This is a planning and inventory problem. Not an economic problem. However, if you look at this company’s declining earnings and recent interviews you will hear them say that business is down because less people are going out for pizza. Maybe less people are eating their pizza because there is no food to be had. Is this really the way to increase profits in a down economy?

Creating new expectations

Everything appears to be on sale these days. It has gotten to the point where people will not make purchases unless there is a discount associated with the price. Is this really the fault of the economy? Or have businesses created an expectation among customers and clients that has created this new reality?

What if you were to offer a product or service that people felt was worth the purchase price, regardless of what this number was? What would that mean in terms of increased revenue and profitability? In spite of the economy, people are still purchasing luxury vehicles and are patronizing restaurants where they perceive the experience is worth the money spent. Customers are choosing cool electronic equipment over cheaper less innovative products.

Stop blaming the economy and start looking at your offerings. Are they appealing? Are you creating ‘must have’ products and services? Are you providing consistent service? Are people invested in your product or service? Or have they moved over to you because you are the cheapest guy in town?

Improving your people

Companies used the excuse that there was no time to invest in performance improvement programs when the economy was humming. Now many of these companies have nothing but time on their hands. Would this have been the case if they had provided training for their leaders on how to effectively manage through periods of change?

These organizations can emerge from this recession even stronger than where they were before the decline. How? By preparing their organization for the recovery. This means investing in the training and development of managers and those individual contributors who are on the front lines with customers.

It certainly is a heck of a lot easier to blame the economy for the decline in your business. But by doing so, you will miss out on the opportunity to build an organization that can sustain itself and thrive in any economic climate.

(C) 2009 Human Resource Solutions. All rights reserved.

Roberta Chinsky Matuson is the President of Human Resource Solutions (www.yourhrexperts.com) and has been helping companies align their people assets with their business goals. She is considered an expert in generational workforce issues. Roberta publishes a monthly newsletter ‘HR Matters’ http://www.yourhrexperts.com/hrjoin.cgi which is jammed with resources, articles and tips to help companies navigate through sticky and complicated HR workforce issues. Click here to read her new blog on Generation Integration. She can be reached at 413-582-1840 or Roberta@yourhrexperts.com.

This article comes from Hotel News Resource
http://www.hotelnewsresource.com

The URL for this story is:
http://www.hotelnewsresource.com/article38936.html

Nagib Lakhani
RevMax Hospitality Consulting Services
O: (425)677-7866  C: (425)445-7750  F: (866)508-7866
nagib@RevenueMaxConsulting.com
4313 245th Avenue SE
Issaquah, WA 98029

Tom’s Take: Collecting Your Customers Email Addresses

Customer email addresses:

  • Build repeat business
  • Reduce your marketing spend per customer contact

Novel ways to make it easier for your employees to ask for, and get email addresses:

-At Front Desk/customer contact point, have a card that offers a drawing for something free or an immediate discount on something you need to sell. Be sure your employees make the offer verbally as well.

-In elevators, interrupt the music from time to time to ask customers to leave their email addresses to learn about coming specials. (We presume, you are already interrupting your the music to build your normal marketing and sales efforts. It’s extremely easy to do.)

-When interrupting your music, include endorsements from your employees or customers. Most people are thrilled to be asked to help. Employees will listen for their voices and voices of their friends. Then ask your employees for their ideas. 

-Ask customers and employees for email addresses of other people who would/could be interested in your products and services. Offer a small incentive. Hotels can knock $5 off on a room upgrade, or offer a free appetizer in the restaurant, 

Valid, opt in email lists are perhaps the single most important marketing tool available. They certainly are the least expensive form of advertising. Email give you the opportunity to create small lists, highly customized to meet the needs of specific customers.

Hotels for instance can have several email lists for their group clients. SMERF clients react to different information in the message than do large corporate groups. Large corporate groups will react best to different information than small corporate groups do. Resist “one size fits all” email campaigns. They generate more bad will than good will.

The cost in email marketing is the time spent making sure your email will appeal to the audience you are mailing to. Spammers get away with “throwing something at the wall in hopes it will stick.” The rest of us have to be much more focused in the content and headline of our email solicitations.

I’d be interested in publishing any success stories you are having.

How Do You Hire Managers Who Empower Employees?

Ask candidates questions that let them describe HOW they train and develop employees.

Ask them what “empowering employees” means to them. Then ask them to give examples where they empowered their employees. Last ask what happened.

Then sit back and listen to their answers. These questions often catch candidates by surprise, so give them the time they need to answer. If they hesitate, or stop midway through the answer, resist the urge to ask another question or to help them. Give candidates time to think through their answer. 

At the end of the interview ask them if they have any other examples of empowering employees they would like to share. Often candidates will have thought of better examples after they have given an answer. Giving them a second chance often demonstrates their skills far better than their initial answer.

Tom’s Take: Developing Shared Values

 Empowering employees creates the shared values that are critical for great service.

People who use a participative style demonstrate by example. While good, these demonstrations don’t necessarily translate into the shared values that assure great service. 

When employees are empowered they see the results of their own decisions. They can then adopt or modify the behavior as they see fit.

It’s the difference between doing something themselves versus seeing something done and being expected to mimic the behavior.

Nagib’s Corner: Maximizing NOI

We have good news but it sure is sprinkled with some tough stuff as well.

Reports have predicted around a 30% decline in NOI.

Companies are generally slower to cut costs at the onset of a slowdown and slow to add expenses back on when we’re on the upswing. The result is better NOI on a rising market, worse on the decline.

What can we do to ensure you maintain margins as best possible?

1. Avoid compromising on your marketing budgets. However, you must demand more accountability and returns on your marketing expenditures. Many ways to do this.

a. Track the performance of your sales team – for those who do not, you are missing out on the most powerful tool to manage your sales effort. It does not require fancy software or dedicated time from scarce human resources: USE YOUR NIGHT AUDITOR to track and manage who is in your hotels, the companies they represent and if your sales team has a communications trail with that organization.

b. Monitor the return on your marketing programs – your Front Desk can/should already be asking all guests the reason for their visit – add how they heard of you and record the responses. Also, add calls to action on your marketing programs that will make it easier to recognize/track the source of the guest visit.

2. Labor, labor, labor – mucho bucks here. Set your budgets to identify fixed vs. variable labor – Housekeeping, restaurant, catering, housemen, etc, are all examples where significant portions are variable. Identify the variable component, educate the department head of the relationship and then hold them accountable to maintain this relationship between revenue and labor-weekly, not monthly.

a. Reward success in maintaining this relationship of variable costs to revenue. It will force accountability and you will come out ahead, every time.

3. Cross training – this is a great time to make this mantra a reality. Front Desk cross-trained with housemen, Housekeeping, restaurant and catering, amongst many. More variety for the individual thereby making them more valuable team members while causing the performance bar on what it takes to be a long term player to rise exponentially.

4. Communications – everyone is mindful and aware of the situation. Let them know your challenges and engage them in solutions which they will be so well versed in identifying. Keep this ongoing, share results, successes and frustrations. Make sure you define what success looks like so they recognize it when they get to it. Simple but often overlooked.

5. Tighten reporting intervals. Check labor performance weekly (actual vs. projected on a proportional basis – % against catering revenues, $ POR for HK, etc). This can be done for almost all departments and will allow you to track progress towards achieving your labor goal.

6. Utility costs. There are very economical energy management systems that require minimal installation, minimal purchases and yet deliver stellar results. You can achieve recovery within a year or so. Huge savings possible.

7. Most of all, INSPECT WHAT YOU EXPECT. When results are expected, and you look for them, you will get them. Expecting without inspecting will always leave you wanting (I can be poetic too!)

Feel free to call if you wish to share thoughts on your approach or if you want to bounce off any ideas on process or strategies to manage the areas mentioned.

Call if you want to learn of the Trends for hotels in your regions.

Also remember, pontificating is easy, doing is tough. It never comes easy – but it has to come.

Thank you and take care.

Nagib

Nagib Lakhani

RevMax Hospitality Consulting Services
O: (425)677-7866 C: (425)445-7750 F: (866)508-7866
nagib@RevenueMaxConsulting.com
4313 245th Avenue SE
Issaquah, WA 98029

Summer Travel Is Looking Good!

Hello Ladies and Gentlemen,

It’s going to be a summer to look forward to!!

Memorial Day road traffic is expected to surpass 2008 levels.

Bring Happiness and Smiles to Your Bottom Line
-Value offerings for families – include

  • Receptions (partner with restaurants to offer some sample foods and coupons, you provide the drinks
  • Breakfast for families
  • WiFi if not already in your offering
  • Attraction related coupons or deals
  • Area retailer coupons and sale information
  • Car wash or interior car vacuum (you know how messy cars get when you have kids in tow!). Include service (or at least provide for access to hose and vacuum cleaners).

-Packages, Packages, Packages

  • Family movie with pop & popcorn – package
  • Attraction entry passes, where possible
  • F&B related deals with neighboring restaurants or your own outlet

Note the sweet spot of $300-$400 over the two – three night stay

Package full deals so families can budget for meals and known costs

  • You have at least $150+ per day, total for, say 4 people.
    Room, breakfast, WiFi – typically included in limited service hotels
    Lunch: fast food coupons @ average $20 per family (they can use these coupons anytime)
    Dinner: in house restaurant values can be strong. In absence of that option, include a certificate, preferably from a chain they can recognize the value with.

Depending on your market, and the demand over the weekend, you can price your rooms with a more comprehensive package that covers the basics – that makes you more attractive than others.

Provide a reason for travelers to be at your location:

  • Use your websites: 80%+ of the traveling public starts their search on line.
  • Tell them why they should be at your hotel and your location: remember, people can easily drive around 2-3 hours in a radius from their home. You want to offer excitement that makes your location stand out.
  • Consider Pay Per Click to get higher exposure – feature your attractions in metatags and in paid search key phrases.
  • Newsletters – if you have a database, now’s the time to send out offers, if you haven’t already.

If you want some more ideas on packages, feel free to call.

Take care and good luck in your planning.

Nagib Lakhani President
Nagib@RevenueMaxConsulting.com
425-677-7866

Revenue Max Consulting
4313 245th Ave SE
Issaquah, WA 98029

Nagib’s Corner: Managing Gen Y

We’ve all experienced the reality of our staffing mix today – it’s the Gen Y that makes up a large portion of our teams today, particularly at the Front Desk. And we also know that their expectations are different from the ones we’re used to – not that there is a lower propensity to deliver on good work, just that it takes a different approach to understand what ‘good work’ is and what ‘customer service’ is from your perspective as compared to theirs.

Gen Y keys:

1. Training for Gen Y’s needs to include a healthy dose of technology to hold their attention.

2. Keep training session brief and content rich – richer than you have so far.

3. Clarify what you mean by good customer service – have a dialogue on what their understanding is of good customer service. You may be surprised with the result!

Certainly there is the expectation of a shorter window for gratification – the challenge is develop a better understanding on what ‘gratification’ means to this group. It will require more direct engagement from you and a lesser dependence on a ‘traditional work ethic’ to generate the results you may want.

The energy you’ll get is high – the energy required from you will also be high!

Good luck.