Hotel Revenue Management, CRM and Guest Loyalty in Challenging Times

The hotel industry entered a slowdown phase several years ago, exacerbating economic challenges and eroding consumer confidence. Occupancy rates must be fought for every day, and we will need to continue doing so unless we are able to manage them wisely, given the high elasticity of leisure and business travel spending, the significant reduction in routes offered by airlines, and the increase in hotel supply seen in recent years. In challenging times, hoteliers see occupancy levels stagnate, among many other indicators, making it necessary to deploy new revenue management strategies to halt the decline in revenue or RevPAR. How can we maximise revenue and profitability? The first step is to stop thinking as we did in the past. We must scrutinise, analyse, study and discover new approaches to pricing, openly and clearly centred on the guest. Let us begin by discussing programmes designed to win and retain the guests we already have. Loyalty programmes must be reassessed and adjusted to maximise the loyalty of existing guests at a time when the hotel brand is being tested and travellers are seeking the best possible value for money. If your hotel is not the lowest-priced option in the market, this is the ideal time to test the effectiveness of your guest loyalty programmes and everything they entail, as I mentioned a few days ago. More often than not, hotel loyalty programmes are not robust enough to retain the two most important guest segments:

• frequent travellers, those who travel for more than one month per year
• high-potential travellers, those with the highest growth in room nights

These two segments tend to accumulate multiple loyalty cards from different hotel chains. Research conducted by several hotel chains into guest loyalty shows that many plans do not offer an appropriate level of discount or are not updated for these categories. As a result, guests may be unaware of the benefits of these programmes, or those benefits may not be communicated clearly. There is no doubt that loyalty programme rewards and redemption rules, given the substantial number of room nights they generate, must be established with the same degree of rigour, analysis and precision as all other rates, by testing guests' willingness to remain loyal in response to specific incentives, among many other possible studies. The guest profile also provides us with a valuable source of information for further developing loyalty through packages and groups. If goods or services are bundled appropriately, including Food & Beverage, in-room entertainment services, the provision of certain amenities and other services, leisure, shows and entertainment in general, as well as excursions, etc., benefits can be achieved for both the guest and the hotel—a clear win for everyone. During this period, success will be determined by hotels' ability to define short-term pricing improvements. Rate differentiation, the adaptation of loyalty programmes and the intelligent design of packages for sale could be some of the key elements of successful management in these times.