This is part 2 in our series on rethinking hotel demand. Missed Part 1? Go here.
Convert Existing Demand
Hoteliers should begin by establishing a baseline for their demand conversion rate. This can be calculated using the following formula:
Converted Demand / (Converted Demand + Reservations Denials & Regrets + Booking Engine Denials & Regrets) = Demand Conversion Rate
This formula allows you to better understand how effectively you’re converting bottom of the funnel shoppers into paying guests. From there, you can utilize the following new tactics to influence your demand conversion rate.
|Traditional Tactics||New Tactics|
|Pricing||Empower your reservations team to close more business|
|Advertising||Outbound call reconversion|
|Evergreen promotions||Shopping cart abandonment recovery|
|Loyalty programs||Outbound sales efforts to guests frequenting your market|
|Responding to inbound group leads||Prioritized outreach based on qualification|
Create New Demand
Consider new ways of targeting prospective guests that have not previously considered your market or hotel. Here are a few ideas to get you started:
Align your sales, marketing, and revenue management leaders.
Not in a “we meet once a week to review reports” kind of way, but rather in a synergistic, flywheel type of way.
Develop a MQL/SQL process for group or corporate account acquisition, and a B2C lead nurturing automation process for transient business. Not sure what any of these terms mean? Stop reading this and Google them now. I’ll wait, I promise.
Utilize targeted digital marketing campaigns that leverage your established customer base to create lookalike audiences that share behavioral characteristics with those already in love with your hotel.
Expand your market’s demand.
Explore new ways to grow your market’s pie, not just your hotel’s slice of it.
Work with your local tourism bureau or chamber of commerce to target events and accounts that have used comparable or competitive markets in the past but have not yet visited your market or submarket.
Harness travel restrictions to redirect displaced demand. For example, combine advertising and promotional efforts within your market to convince nervous beach-bound travelers to visit Southern California rather than Florida by presenting it as a safer option.
Consider your market’s positioning. Are there additional amenities or services that would help your market to succeed? One organization that has done this successfully is Sage Hospitality, which often works with local governments to establish their hotels as a launch pad for their urban revitalization plans.
Leverage your entire ecosystem.
Work with complementary companies to gain exposure with new audiences.
For example, hotels in Bend, Oregon can work with local breweries to establish a “Bend Bikes & Brews” tour targeted at drive-market customers, bringing more people to the tasting rooms and selling guestrooms at the same time.
Or perhaps you can partner with a local hospitality school to develop a series of week-long “boot camp” courses for those looking for an entry into the industry. The hospitality school sells education, you sell rooms and gain a new recruiting pipeline.
How do I get started?
Converting existing demand and creating new demand will require a new set of tools in order to identify opportunities, quickly implement new strategies, and monitor results.
Hoteliers are already combining their external benchmarking data with pace and pickup reports. However, it’s important that they expand their analysis to incorporate demand and conversion signals across all dimensions: market segments, sources, geographic origins, rate codes, travel agencies, and target accounts.
By leveraging automated technology systems that provide accurate, forward looking data you can determine which customer subsegments present opportunity.
For example, you can use your recent booking trends by geographic origin data to determine how changing travel restrictions are impacting demand. This allows you to double down on targeted advertising spend to customers that have the ability to travel to your hotel, while cutting spend directed at those that do not.
Likewise, automated reporting tools can help you monitor and optimize your demand conversion efforts. Customers of Focal Revenue Solutions and Navis have the ability to combine their reservations conversion and call volume data with data from the PMS and rate shopping platforms in order to identify and improve conversion issues.
By adapting these techniques to convert existing demand and create demand from new sources, you’ll put your hotel in a position to bounce back more quickly and outperform your competitors.
NAVIS Reservation Sales Suite and Marketing Suite solutions generate a tremendous amount of data. Focal Revenue Solutions’ purpose-built analytics solution coupled with NAVIS data provides clients with unparalleled insights into their properties performance and health. Contact us today to learn more.