Another Business Model for Independent Properties
Independent hotels and resorts are resourceful by their very nature, but the current business climate is challenging even the best of them. Drive market resorts and those with easy direct flight access are recovering more quickly than urban hotels, but too many properties have had to close: are unsure about the new business environment: and have taken big hits to their bottom lines.
If a brand or soft brand doesn’t appeal to you, know that there is another way to reduce overhead costs, minimize losses, and reduce the funding an owner needs to provide until there is sustainable, profitable demand for your independent property.
While we want to see our hospitality colleagues back to work as quickly as possible, owners will be overhead-challenged for the foreseeable future and need to rethink how to reorganize their businesses. Enter on-demand staffing for independent hotels.
This concept can be applied to many hotel departments, but for now, let’s focus on three areas of sales and marketing.
Benefits of On-Demand Staffing
- On-demand staffing is not the same as combining two (or more) roles into one the way chains and soft brands have centralized positions over time. Because it is based on the needs at the property level, owners can staff select management positions based on demand while still ensuring quality and control at the property level.
- The number of staff and the work assigned can be adjusted based on ownership’s appetite for investment — almost no matter how large or small that amount is. This can work for a variety of positions, but not all. There needs to be an element of projecting the dollar amount to be allocated based on each property’s financial situation.
- While most professionals agree that businesses that continue to market themselves during economic downturns recover faster, when an industry was as devastated as ours was, that is easier said than done.
- Pent up demand is continuing to build, and it is only a question of time before our industry improves. Now is the time to start bringing back proactive sales and marketing in a sensible and affordable way.
There are ways in which your independent hotel or resort could deploy on-demand staffing to correspond with anticipated demand growth starting in the second half of 2021.
Proactive Business Development
Proactive business development has stalled in most hotels and resorts due to the collapse in business, and sales departments are minimally staffed. Over the next few months, sales people will only have time to be reactive due to staff reductions. However, an owner does not have to add permanent fixed costs during this transition time.
Contract with an organization that can provide quality sales talent to develop new business and clean up accounts which will then be passed back to your existing team. This allows your property team the ability to focus on developing business, not looking for contacts and updating accounts.
Create an agreement that allows work that will flex with your budget and/or demand. In other words, if cash flow ebbs and flows, so will the staffing hours. Regardless, there is always some level of business development underway.
Strategy to Drive Revenue
Revenue management strategy and implementation is important, regardless of market conditions; processes may temporarily change but are permanently needed. The opportunity exists to have exceptional RM at a reduced cost, while ensuring full property-level control of the process and implementation of the strategy.
Even in the best of times we often find a gap between the RM strategy and implementation.
Retain an on-demand RM resource that can do a quick audit of the existing strategy and implementation process to fill any gaps to make certain no revenue is missed. This can also be structured on a flexible schedule based on the needs of the property, which has a positive impact on fixed costs.
Once demand improves and revenue management needs increase, consider a shared-services solution.
Keep Your Data Clean
Purchase updated B2B business development databases or contract resources to clean existing data. Look for B2B data that is cleaned on a regular basis. This will also save your existing sales and marketing staff time by providing them qualified contacts instead of using valuable sales time to update accounts and databases. This process can be prioritized by market segment based on your individual recovery projections.
In conclusion, the financial challenges for property owners and small companies will remain formidable throughout 2021 and probably into 2022. There are plenty of options for owners to explore so we wanted to add yet another, flexible business model to consider.*This article was originally published by eHotelier on February 22, 2021.