Undoubtedly you are familiar with the vast amounts of data and statistics that point to the market edging ever closer to a recession. While other industries and their corresponding companies’ share prices will feel the brunt of this economic correction, hotels will inevitably get caught up in the tsunami, if and when it happens.
The questions that surround anything like this are always when will it come, how long will it last and how much will it hurt? So yes, the sky is going to fall and it is likely sooner rather than later, judging primarily from the course of regular market fluctuations over the past century. Regardless of how long you have to lay the sandbags down, let’s discuss what types of proactive steps you can take to lessen the impact of this unavoidable pendulum swing and to recover quicker than the competition.
Lessen the blow
I happen to have some experience in a downturn. My first GM role was heading into the last recession, which seems like a long time ago at this point but has frankly left some immovable impressions on how I view my job. During that great tumult, the projections for our hotel and the market overall were bleak, yet I was nonetheless tasked with executing and completing a $1 million renovation on what was ostensibly a fairly small property.
In order to lessen the blow, I dove headfirst into rapidly locking any additional business in the market. I canvassed the area and was able to secure a contract that would gross $500k annually for a new company that was building a plant nearby. The rate was lower than what we had taken in the past, but I knew we needed the base business to minimize the impact of the recession.
So, in times of economic crisis, your property team needs to strategize and call a meeting of operations and sales. Take the time to throw ideas on a whiteboard and see what sticks. Call out crazy ideas or ideas that may seem silly, but what comes out of the session may be just what the hotel needs to survive the next big dip. By taking a proactive approach rather than a reactive approach, you can help your property throughout the impending downturn.
Come out ahead
Many properties and teams take their clients for granted. They often forget to check in on them and continue to build their relationships during the good times. They assume what’s healthy now will go on in perpetuity.
Too often a client or account only garners attention from a hotel when that property is looking for something in return. That above mentioned $500k piece of business I secured was in fact staying at my competition. When I asked the contact if she was happy or if they were taking good care of her, she said that she wasn’t dissatisfied but that they were not being proactive in their approach to protect the account. I offered her meeting planner points for every dollar booked at our hotel and, needless to say, she was more than happy to shift the business.
The lesson here is to take the time to check in on your top accounts, always and regularly. Protect your assets by learning about their present and future needs.
Do you know if they are truly satisfied and loyal customers of yours, or can your competition simply swoop in and take the business? Do you know what your contact’s likes and dislikes are? Can you send them a gift that is tailored to what they enjoy or are you having to guess or give them the same gifts that every hotel gives?
Ultimately, the two aforementioned ideas are practical steps that you can take to ensure your hotel comes out of the recession faster that the competition. Know your contacts better than your competitors, then meet and anticipate their desires. It is a seemingly simple concept, but when you master it you will see the wins on the top line of your P&Ls.
Everyone knows the next downturn is coming. The trend of record low unemployment coupled with record highs in the stock market will not last forever. It’s a matter of listening and proactivity. By taking a few points away from this article, you can ensure that your hotel does not feel it as much as the hotel across the street and that you come out of the recession quicker than your competitors.