#boutiquehotel | KRG Hospitality

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August 14, 2024by David Klemt David Klemt No Comments

Maximizing a Hotel’s Off-Season

Maximizing a Hotel’s Off-Season

by Doug Radkey

Note: AI-generated image.

Nearly every hotel experiences an off-season during the calendar year, a period of time when they can see occupancy rates drop by as much as 30 percent.

But when did it become normalized to sit back and view this significant dip as acceptable?

With the right strategies, these periods can become opportunities for growth. Or in the very least, reduce the occupancy drop to five or ten percent.

What would that difference do to your annual outcome?

Forecast Your Off-Season

Hotel operators, independent and chain, should be mindful of the off-season, forecast demand effectively, and leverage local opportunities. This change in approach can help hotels develop comprehensive strategies to maximize revenue and occupancy during traditionally slow periods.

Being mindful of this period allows you to develop strategies proactively to mitigate its impact. This approach involves recognizing the specific months or times of year when demand traditionally drops, which can vary significantly depending on your location and target market.

For instance, a beach resort may experience a lull during the colder months, whereas an otherwise busy hotel located in the heart of a large city might see fewer guests during the summer when business travel decreases. Identifying these patterns helps operators better prepare and implement measures to attract guests and maintain profitability during these quieter times.

Effective forecasting involves analyzing historical data to identify trends and patterns in occupancy rates, daily rate, and revenue metrics. Tools such as Atomize, a dynamic revenue management system (RMS), and Mews, a property management system (PMS), can provide valuable insights by processing large amounts of data and highlighting seasonal fluctuations.

Predicting slow seasons accurately gives operators the ability to adjust their marketing strategies, pricing models, and operational plans. Doing so optimizes performance, and minimizes the negative impact of a reduction in demand.

Diversify Your Target Market

One of the most effective strategies for maximizing hotel revenue during the off-season is diversifying your target market. Broadening the scope of a hotel’s potential guests attracts new segments that may not have been the primary focus during peak periods.

This can include targeting niche markets such as wellness travelers, eco-tourists, digital nomads, and local residents looking for staycations. Each of these segments has unique needs and preferences an operator can cater to with specific packages or experiences.

To reach these off-season niche markets effectively, hotels need to create customized marketing campaigns that speak to their interests and needs directly. Personalized, targeted marketing can enhance the appeal of your hotel to these segments significantly.

For example, digital nomads, who seek remote working environments, can be attracted with packages that include high-speed internet, comfortable workspaces, and discounted long-term stays. Marketing campaigns for this segment could highlight the hotel’s co-working spaces, business amenities, and serene surroundings conducive to productivity.

When targeting local residents looking for staycations, campaigns could emphasize the convenience and luxury of a local getaway, offering special weekend packages, family deals, or romantic escapes.

This strategic approach may not only fill rooms but also build brand equity among niche segments, ensuring a steady flow of revenue throughout the year.

Embrace Group Bookings

Group bookings can be an effective strategy for filling rooms quickly, and generating revenue during the off-season.

Targeting groups helps hotels secure multiple reservations at once, thereby stabilizing occupancy rates, and mitigating the impact of seasonal downturns.

Further, group bookings encompass a wide range of categories, including corporate events, conferences, weddings, family reunions, and social gatherings. Each of these groups has specific needs and expectations. Operators can meet these needs through tailored packages that include group discounts, meal plans, and activity options.

Going further, operators can appeal to these groups by partnering with local tour operators and community organizations to promote personalized packages.

Dynamic Pricing Strategies

Dynamic pricing involves adjusting room rates in real-time based on demand, competition, and other market factors.

Leveraging revenue management software and data analytics helps hotels optimize pricing to attract more bookings while maintaining profitability. This flexible approach ensures that room rates are always competitive and aligned with current market conditions, filling rooms that might otherwise remain vacant. These pricing strategies can be extended into bundles and experiences to showcase additional value.

Combining accommodation with additional services and amenities offers more value to guests, making their stay more appealing. These bundles not only enhance the guest experience but also encourage longer stays, and increased spending on-site.

Further, curated experiences can range from culinary workshops and wellness retreats to cultural tours and outdoor adventures. Understanding the preferences of the targeted or niche off-season market should lead to the creation of unique and memorable experiences that go beyond standard accommodation offerings.

For example, a hotel might collaborate with a local chef to offer cooking classes, or with artists to provide guided art workshops. Curating guest experiences not only differentiates the hotel from competitors but also provides added value that can justify higher room rates during the off-season.

Lastly, a dynamic pricing strategy could be used to encourage short-term and long-term stays beyond the typical three- to seven-night range.

For short-term stays, offering discounted rates for extended weekends or mid-week stays can appeal to both leisure and business travelers looking for a quick escape. With long-term stays, hotels can provide special rates and amenities for guests staying multiple weeks or even months. Doing so can attract digital nomads, business travelers on extended assignments, or families relocating to the area.

Strategic Adjustments

Outside of trying to build business, the off-season provides an ideal opportunity for hotels to review and adjust their operations. This ensures they are running efficiently and effectively, and preparing themselves for the next peak season.

During these quieter periods, hotels should conduct comprehensive reviews of operational efficiencies to identify areas where processes can be streamlined.

This may involve analyzing housekeeping routines, front desk procedures, and food and beverage operations to find ways to reduce waste and improve service delivery. Focusing on these improvements enhances overall efficiency, which not only saves costs but also improves the guest experience.

Reviewing and updating standard operating procedures (SOPs) is another crucial task that can be undertaken during the slow season. Hotels can take this time to involve staff in the review process, gathering feedback on current procedures and identifying any gaps or inefficiencies. Updated SOPs can then be communicated and implemented through targeted training sessions, ensuring that all team members are aligned, and equipped to provide the highest standard of service.

The off-season is an excellent time to schedule one-on-one meetings with team members, and comprehensive training sessions that include refreshers on existing protocols, along with introductions to new technologies or service standards. Investing in staff development not only improves service quality but also boosts employee satisfaction and retention.

Technology plays a pivotal role in modern hospitality management, and the slow season is the perfect time to review and upgrade technological systems. Whether it’s enhancing the property management system (PMS), implementing a new guest (customer) relationship management (CRM) tool, or upgrading the hotel’s Wi-Fi infrastructure, these technological improvements can enhance operational efficiency and guest satisfaction significantly.

Additionally, hotels can explore new technologies such as AI-driven analytics and automated check-in systems to stay ahead of industry trends and improve the guest experience.

Review Playbooks

The off-season is a strategic time to review and adjust various playbooks that guide a hotel’s operations and strategy.

Reviewing the Brand Strategy Playbook ensures that the hotel’s identity, values, and positioning remain strong and relevant. Operators can update Marketing Playbooks to reflect new trends and campaigns tailored to attract guests during the next 12 months. Business Playbooks should be assessed to ensure all operational plans align with the current market environment and organizational goals. Financial Playbooks are critical for maintaining financial health, and reviewing them helps identify cost-saving opportunities and areas for investment.

Regularly updating these playbooks maintains strategic clarity and agility, ensuring a hotel remains ready to capitalize on opportunities as they arise.

Utilize the off-season to build occupancy, leverage revenue opportunities, adjust operations, update SOPs, enhance training programs, and upgrade technology. Doing so helps a hotel to optimize its performance.

This proactive approach ensures that when the busy season returns, the hotel is not only coming out of the off-season with better cash flow, but operating smoothly and efficiently, providing an exceptional guest experience.

Image: DALL-E

July 15, 2024by David Klemt David Klemt No Comments

Developing a Legacy with a Boutique Hotel

Developing a Legacy and Brand Equity with a Boutique Hotel

by Doug Radkey

Imagine staying at a boutique hotel that leaves a lasting impression, so much so that you share your experience with everyone that you know.

We’ve all surely been there and experienced that at some point in time and realistically—that should be the goal of every operating property. Does this happen with every property? Surely not.

However, when this does happen, it often means that the hotel ownership and leadership team has put in the strategic fundamentals of building a legacy.

Understanding Legacy and Brand Equity

In the context of a boutique hotel, legacy is about creating a lasting impact that transcends time, and resonates deeply with guests and the broader community. It involves crafting memorable guest experiences that linger in the minds of visitors long after their stay, whether through exceptional service, unique design, or personalized touches.

Cultural significance is often another crucial aspect. This is achieved when the hotel embodies and promotes local culture and traditions, contributing to a sense of place and identity.

The combination of lasting impact, memorable experiences, and cultural relevance not only elevates the hotel’s brand but also develops a profound connection with guests, encouraging loyalty and positive word-of-mouth, thus enhancing the hotel’s brand equity over time.

Brand equity, if you’re wondering, refers to the value that your hotel brand adds beyond its underlying functional benefits (such as a restful sleep that every hotel should be providing).

Essentially, brand equity is built on three pillars: perception, loyalty, and market positioning.

Brand perception encompasses the associations consumers make—and attitudes they hold—toward the brand. Marketing efforts, public relations, and experiences all influence this perception. Loyalty is reflected in repeat business opportunities, and the willingness of guests to choose the hotel brand over local competitors, often allowing the brand to command premium pricing. Market positioning refers to the hotel brand’s place in the competitive landscape, how it differentiates itself from others, and its overall reputation in the community.

Together, these elements contribute to the financial and strategic value of the brand, making brand equity a key asset for your business.

A strong legacy contributes to building brand equity and vice versa, creating a virtuous cycle of growth and reputation.

The Foundations of a Boutique Hotel’s Legacy

At the heart of every successful boutique hotel lies a unique story and vision that sets it apart from the competition. This narrative often stems from the hotel’s origins, its founder’s passion, or a distinctive theme that resonates with its location and clientele.

A compelling story not only provides guests with a memorable backdrop but also creates an emotional connection that builds loyalty and word-of-mouth opportunities. The vision of the hotel should follow its long-term goals, the type of experiences that it aims to offer, and its commitment to excellence.

Further, core values and principles form the ethical backbone of a boutique hotel, guiding its operations, decision-making, and interactions with guests and staff. These values might include commitments to exceptional service, environmental sustainability, community engagement, and cultural preservation, to name a few. By consistently adhering to these principles, a boutique hotel can build a strong, trustworthy brand identity that resonates with guests.

For instance, a boutique hotel may emphasize its dedication to sustainability and local culture, weaving these two elements into its story and vision to attract environmentally-conscious guests, and those seeking authentic experiences. This hotel, prioritizing sustainability, might implement green practices such as energy-efficient systems, locally-sourced organic food, and water-waste reduction initiatives.

By aligning its operations with its core values, the hotel not only differentiates itself in a crowded market but also attracts guests who share similar values, thereby outlining the fundamentals for a loyal and engaged guest.

Understanding the Guest

In addition to value and story-telling, creating purposeful guest experiences that exceed expectations is crucial for establishing a lasting legacy. This involves understanding and anticipating guest needs, offering personalized services, and creating memorable moments in time that guests will cherish long after their stay.

From personalized welcome amenities, curated local experiences and community partnerships to exceptional service and attention to detail, every touchpoint should reflect the hotel’s commitment to excellence.

That same sustainable boutique hotel from the example above might offer tailored excursions that highlight the local culture along with harvesting farmlands that integrate the hotel’s commitment to farm-to-table programming. Doing so will provide guests with unique and enriching experiences.

By consistently delivering above and beyond what guests come to expect, the hotel can build a reputation for providing the best experiences. That leads to repeat business and positive reviews, which are essential for long-term success and brand equity.

Building Brand Equity

Establishing a strong brand identity is a key element of building brand equity for a boutique hotel. Brand identity encompasses the visual, verbal, and experiential elements that distinguish a hotel from its competitors.

This includes the logo, color scheme, typography, and overall aesthetic, as well as the tone and style of its communications. A well-defined brand identity creates a cohesive and recognizable image that resonates with guests and instills a sense of trust and reliability.

For instance, a boutique hotel might emphasize a luxurious, eco-friendly brand identity, using natural materials and earth tones in its design and marketing materials to appeal to environmentally-conscious travelers. By consistently presenting a unique and compelling brand identity, the hotel can attract and retain guests, thereby increasing its brand equity.

Furthermore, quality and consistency are critical factors in building and maintaining brand equity. Guests expect a certain level of service and experience when they choose a boutique hotel, and meeting or exceeding these expectations consistently is essential. This involves maintaining high standards across all aspects of the property, from room cleanliness and staff communication to the quality of on-premise food and amenities.

Consistency ensures that guests know what to expect and feel confident in their choice to stay at the hotel.

Emotional Connections

In addition to brand identity, quality, and consistency, building an emotional connection with guests is a powerful way to enhance brand equity. Such connections are created by delivering personalized experiences, genuine interactions, and thoughtful touches that make guests feel valued and appreciated.

A boutique hotel team must anticipate guest needs, provide tailored services, and create memorable moments that resonate on a personal level. By developing a deep emotional connection, the hotel can transform guests into loyal advocates who not only return for future stays but also recommend the hotel to others.

This emotional loyalty is a key driver of brand equity, as it builds a strong, lasting relationship between the hotel and its guests.

In summary, the difference between boutique hotels that focus on building a legacy and brand equity—and those that do not—can be stark. Hotels that invest in creating a unique story and vision, adhering to core values, and delivering exceptional guest experiences establish a lasting impact and cultural significance. They build strong brand equity through effective messaging, consistent quality, emotional connections, and strategic marketing and public relations efforts.

These hotels are able to attract loyal guests, secure positive media coverage, and maintain a reputable and recognizable brand.

In contrast, hotels that neglect these aspects often struggle with inconsistent service, lack of guest loyalty, and minimal market presence, leading to an unstable business model. In failing to create a compelling brand identity and invest in personal development and effective marketing, they miss out on the opportunity to build a strong legacy, along with equity in their brand.

Ultimately, the sustained success and growth of a boutique hotel depends on its commitment to these foundational elements, which differentiate it from competitors and ensure its place as a leader in today’s often saturated market.

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