How to diversify your hotel business source?
For many people, COVID was a harsh reality and hotels have also suffered. Personally, I have known many hotels and people working in hotels suffer from the effects of lockdown and closure.
However, with the business restarting, it is a good time to rethink the sources of business in your hotel and diversify your hotel business source.
Another benefit of diversifying your business source is that you will not be at the mercy of the OTA and the aggregators in fnb.
What to do first?
If you understand market segmentation – and I am pretty sure you do it already – then, take a hard look at the segmentation.
These days you have pretty much all type of data available in the Property management software.
Identify the ideal guest
As you segment your guest, you will get a deeper understanding of how you can attract them. Segmentation can usually follow
- Channels – Direct, Corporate, Leisure, MICE
- Source Market – City, Region, State, Country
- Age and Gender – Gen X, Y, Male Female etc
On a high level, understand if your business is relying on one channel like direct or corporate and then take action to reduce the reliance.
In a typical business hotel, the corporate mix used to be around 60%. Overnight many hotels lost out on that with the lockdown.
Now this year, it is still direct channels that are producing for the hotel. Imagine a day when they raise their commission. You will be at their mercy and will find your business affected.
Focus on improving share of target segment
Once you know the percentage share of business from each segment, decide what you want to focus on and create programs around improving share in that segment.
Now it is easier said than done.
However now you have a goal.
Increase direct booking from the hotel website from 2% of my business to 5%. You can implement strategies to help you with that.
If your business is coming from top metro and some business in coming from Tier 3 cities, you could possibly tie up with agents in that city.
You will have limited money for your hotel promotion this year. Make sure you review all your spending and spend it on targeted promotions that will help your goal of diversifying your revenue.
Spend on advertising only if it meets your goal of diversifying your source of business in the hotel.
Where is your business coming from?
By looking at your sources of business and seeing where it is coming from should help you. If you see a lot of business coming from a particular source, it should worry you enough to reduce your dependency on it.
By taking steps to diversify your hotel business source you will ensure your business is able to fight out the toughest challenges.
And if you are interested in training your team, do check out our training plans for hotels