This article was orginally published at Hotel News Now.
Hoteliers should take these steps when they start developing business plans.
Before we complete our business plans for 2019, a review of macroeconomic data is in order.
Economists are starting to talk about a recession in the next two years. We should begin planning for that downturn but for the next 12 to 18 months, I would not lose any sleep over this. We should see a 2.5% GDP growth rate over the next four quarters.
Unemployment is low, consumer confidence continues to be strong, and notwithstanding the possibility of a trade war, the short term economic conditions are good.
All of this information continues to bode well for the hotel market in the U.S. next year. STR is forecasting 2.5% RevPAR growth in 2019 and most pundits agree on that range. Naturally, the caveat is that unexpected “event” that could stimulate a precipitous decline in demand. We believe that can be averted over the next 12 to 18 months. (STR is the parent company of Hotel News Now.)
The time for budget and market planning is coming up quickly. While many operators merely look at last year’s numbers to budget and forecast, the only meaningful way to budget is to analyze the market thoroughly. Whether you are opening a new business or getting ready for 2019 budgeting, now is the time to begin the planning process.
1. Stay informed on your performance
Review your trend report and competitive-set information from STR. This will provide a baseline. Ghost-call competitors to obtain price points, features and benefits.
2. Learn from the competition
Meet with general managers and marketing team members of competitors. Tour each business and establish a referral program. Coordinate a market review with your franchise marketing manager if appropriate and discuss opportunities for digital advertising to promote your business with your extended marketing team.
3. Develop a 2019 sales and marketing budget
Do not assume growth from this year. Review the STR report and other market intelligence and market pace reports carefully. Review quality and quantity of sales collateral and ensure your email lists are updated for newsletters and blasts and that you are compliant with GDPR.
4. Review customer information guides, whether electronic or printed
Plan a sales blitz. Order blitz giveaways and mementos with your logo, address, website and phone numbers. Choose items that will stay in contacts’ office such as candy jars, post-it notes or coffee mugs. Review your central reservation database property information file for errors or omissions.
5. Stay invested in your community
Meet with key contacts at your convention and visitors bureau and chambers of commerce. Obtain a list of advertising and trade show opportunities for budgeting. Contact local chambers of commerce and obtain lists of your area’s top businesses and employers. Qualify key companies and individuals to create or update your own emailing or mailing lists/labels. Business journals also have great lists.
6. Pursue many forms of marketing
Contact guest loyalty rewards program administrators at franchise headquarters to arrange to promote your business in the next member newsletter. Solicit articles on your business as a feature story. Develop possible press releases for the coming year along with a public relations plan and contact each segment specialist for the franchise worldwide sales staff to see what opportunities are available to promote your business at upcoming trade shows, future segment specific directories or sales missions. Naturally, if you are independent, you must ensure you have representation to compete in each market segment.
7. Rely on strong email promotions and website offerings
Create a database for electronic mail promotions and ensure your website is not a brochure but rather a focused, customer-acquisition medium. Create website awareness, or in other words, create some “buzz” via pay-per-click and unique offerings. And if your website is not mobile-optimized by now, this needs to be corrected immediately.
8. Continuously create and deliver ‘can’t-resist’ content
Traditional advertising is rapidly losing out as marketing professionals realize the advantages and effectiveness of digital content marketing. Marketing’s new mantra of “brands must now act as publishers” has arrived in part because of social media and its potential to engage in meaningful conversations with their loyal fan base and potential clients alike.
9. Invest in the sharpest media tools
These include blogs, social media, newsletters, webinars, e-books, photo-sharing and videos. You will drastically reduce the hefty investments in traditional paid media that are becoming substantially less effective with modern consumers. Simply put, you need to create and share content while being of interest to lots of people to be a player!
10. Calculate the lifetime value of a new customer
As an example, if a traveler stays with you two nights per month at $150 per night for five years, that is $18,000 in today’s dollars. This data is helpful in determining the value of a new customer. Include a call to action in all advertisements and measure the result of every email marketing blitz and test new approaches periodically.
Use this process now or risk losing your competitive edge! Here’s to a strong finish in 2018 and a great start to 2019 with a business plan and budget based on good information!