Take Advantage of All Market Segements
When talking to hoteliers that have been in this business for over 20 years, you hear about the market segements that seem to be standard all over the world. Corporate, Lesiure, Group N Travel, Goverment and Milliatary and SMERF. However to me a couple of these segements can be broken down a little bit more to better see the full picture of what they offer.
When writing about a subject like this most hotel owners are going to read this and be totally disgusted to find out what is needed in some areas to boost their occupancy. Other owners will be like, oh duh, why didnt I think of that. Hotel sales people will be like, I have tried to do this at my property but the GM and owner both are against it. Your proably asking yourself this. What are you talking about? Well I am talking about Weekly Rates!
Weekly Rates At Your Hotel and How To Profit From Them
Now before you leave this blog and start dumping rates in the toilet to bring in your occupancy, you want to make sure your going to profit from this type of market. You also want to be careful and not to get the clientel that is going to bring your hotels reputation down. Here are the first things you want to look at.
1. What Segement is Your Hotel In? Budget, Economy, Economy Midscale, Midscale, Upper Midscale, and Upper Scale Full Service.
2. How Many Rooms Does Your Property Have?- This is very important because if you only have 40 Rooms and you are already running 55% occupancy you might not profit from this kind of business.
3. What Is Your Cost Per Room Sold, and Cost Per Room Empty? - This will help you figure out your rate.
Once you have this down you can then decide if this kind of business is profitable for you or not. If you dont think its profitable for you and you have a 100 room hotel with only 30% Occupancy, then I am going to tell you that you are wrong. This kind of business will be profitable for you, and could possibly keep you out of foreclosure.
Companies are looking at ways to cut costs and get more value for their money. They are passing these traits on to their employees. The employee that travels to a city that is going to be there for 1 to 4 weeks is going to look at a way to help save their company money, because either A They get to pocket the difference of their pier diem, or B they are rewarded with bonuses if they are able to cut down on expenses when on the road. Now with weekly rates you want to be comfortable with choosing your rate, but you need to know that a good weekly rate, that will get bookings is usually %50 to %75 Off BAR/RACK. Your asking well how will I make money with that. I am going to show you.
Take Cash Only For Payment- This is becoming a trend with Midscale and Economy Midscale properties, so guests are not too shocked when you tell them you have a great weekly rate, but you must take cash for payment up front for the whole 7 days. This way your not paying credit card processing fees.
Limit Housekeeping Services- Your weekly stays will receive trash and towel service daily, with one day out of the week, you will give them full service. This will help you control your labor, laundry and chemical costs. I have seen where some midscale hotels will elimiate breakfast, I STRONGLY RECOMEND THAT YOU DO NOT DO THIS! Allow the guests to take advantage of the other amenities in the hotel as those are the reasons they are staying with you.
NO REFUNDS FOR EARLY CHECK OUTS- Make sure to have a policy for the guest to sign at check in, letting them know that they will not be refunded for checking out early, that checking out early will raise their nightly rate to the full nightly rate of the hotel, and they will be charged accordingly. So if a guest pays you for 7 nights at a nightly rate of $50, and checks out on their 3rd night, they will be charged the $100 per night for their 3 nights which will cause the guest to pay more. When you have a policy like this, if the guest has to leave they will do so with out asking for a refund, knowing they were getting one hell of a deal to begin with.
Occupancy How Many Rooms Do You Sell - Occupancy will depend on your own operating costs, area, time of year, and how big your property is. Here is my basic recomendation based on a 100 Room Holiday Inn, Ramada, and or Clarion to just give you an idea of possible operating costs. 100 Room Property 20% Weekly Stays. Another great way to do this with out too much thinking is take your fixed costs and figure out your daily costs to just keep the doors open. Then sell that much daily revenue in Weekly Stays. This way you can rest easy knowing your basic costs are covered but make sure you do have at least 30% of regular business coming through, other wise you will go into the hotel.
Senior Citizens Also Called The White Hair Segement
For years Seniors were grouped in the Leisure Segement and never really sought out after invidually because of limited funds. That was a mistake, and will be a mistake even now if you do not consider this a seperate segement of its own. Seniors make up the largest segement of the United States Population for the first time in history based on the 2010 Census. They are also very big spenders. Read this article we found on Seniors and their spending power, along with how they make purchasing decisions click here.
If you were to work these two segements your property could see an occupancy boost of 15 to 35%. It just depends on you and your sales skills. Feature and Benefits must always lead, but just remember people are looking for deals in these segements but they are also looking for value. If your value is worth $100 a night, then they will pay $100 a night, if its only worth 50, then why would anybody want to pay for more?
These items that were discussed in this article also will give you a shot in the arm occupancy boost as Weekly Stays are happening all the time, and Seniors can spontaneously travel any time they want when faced with a good deal that has value to them.
Until Next Time!