Beat the crunch: top tips for hotels

With the travel market slowing down and the number of investors drying up, the hotel industry is certainly feeling the squeeze.

While operators in the restaurant sector have been quick to offer eye-catching promotions, their counterparts in the hotel sector have been arguably less forthcoming – until now.

In the past month, hoteliers have been offering a number of different promotions to attract guests during the turbulent economic climate.

The Hoxton hotel in London, owned by Pret a Manger founder Sinclair Beecham, has begun renting its bedrooms by the hour between 10am and 4pm, in an effort to fill empty rooms with business meetings and client briefings.

Meanwhile, Choice hotels is now offering a 25 per cent discount on all bookings for its UK properties when made five days in advance, and the Radisson Edwardian hotel group is giving away one free delegate space for every ten booked into one of their meeting and conference rooms.

Outlandish promotions may have worked for restaurateur Peter Illic, who implemented a ‘pay-what-you-think-it’s-worth’ at Little Bay in London and subsequently doubled his customer base, but it’s as yet unclear whether such promotions will benefit hotels.

However, there are also measures hotels can implement to help ensure rooms are fully booked and profit margins are healthy

Experts top tips

Jules Murray, director of customer service specialists Spider on the Wall, says hotels should work to retain their existing customer base rather than tempt in new ones, claiming it costs five times as much to gain new custom.

“Customer service will be the key differentiator of the 21st century,” she says. “The customer experience is today’s competitive battle ground, and hotel operators need to maximise this to its full potential.

“By tending to the customer’s emotional needs and pre-empting their next requirement, hoteliers can be sure to keep the great relationship with the customers they’ve got.”

Murray suggests that by offering perks such as a free room upgrade to regulars, including breakfast in the price, or even offering an airport pickup service can really add value to a guest’s stay.

However, she highlights that while a hotel may offer great value through its services, without a fully trained team of staff, its business can really suffer.

“The single biggest reason why a business loses customers is the indifference of just one employee. You are only as good as your weakest point. Every individual within a company can make a significant impact, not only on customer experience, but also on the company’s service reputation in the marketplace.”

Murray`s top tips for attracting customers:

1. Dispose of negative attitudes. Staff members with negative attitudes are poisonous to a working environment. Either encourage and train them to do their job well, or find someone else
2. Use and incentivise your existing customers. Encourage your existing customers to return through loyalty cards, or the promise of a free upgrade on a return visit.
3. Encourage staff to upsell. Offer incentives to staff to encourage them to upsell, for instance, implement a competition to see who can sell the largest volume of a particular wine, with a prize for the winner
4. Ensure staff are aware of the USP of the hotel. Staff won’t be able to sell the benefits of your hotel if they don’t know what they are
5. Take dinner reservations at check-in. Make sure guests dine at the in-house restaurant instead of looking elsewhere by taking a dinner reservation at check-in.

DLA Piper`s top tips for riding the recession

While the aforementioned tips will help build up a loyal clientele and make for a better working environment, law firm DLA Piper also recommends hotels think about the business in its entirety and ensure that they effectively have their whole house in order to soften the blow should it start to falter.

1. Use your brand. According to Mathilde Heaton, a legal director at DLA Piper, established brands often have a competitive advantage during economic downturns because consumers look for more certainty in brands they trust and lenders favour them because of their proven track record. However, there are some steps she recommends hoteliers take to protect those brands and develop them.
• Look at making your hotel more environmentally friendly. “Greening the brand in a challenging environment can not only have a positive effect but is also the opportunity to cut costs," she says.
• Check your intellectual property rights are in order. Get names and trade marks registered and ensure those already registered are with the correct company if you have several brand names under one group.
3. Protect your reputation. A business’s reputation is always important, but more so when customers are more choosy about where they spend their precious cash. Having a strong reputation is also important to ensure shareholders and financiers will continue to invest, says DLA Piper’s Ruth Hoy. She also recommends that senior management know exactly what is going on in the business and with their employees, but crucially they should keep abreast of what is being said about the company by the outside world. And if comment is negative – deal with it and quickly.
4. Check contracts. Looking at contractual arrangements with suppliers and lenders before the business takes a downturn could put you on a stronger footing if something does happen, says Heaton. Looking at finer details such as the term of a contract and where you stand on non-payment could also turn a challenge into an opportunity, says her colleague Sarah Bell, so study them carefully before signing and revisit them before making any relevant changes to the business.