Business plans for 2020 must be clear, concise and simple and are most effective when done prior to completing a budget. Review macroeconomic data which currently indicates a combination of a mild global slowdown and softening but no imminent recession. Unemployment remains low, consumer confidence continues to be fairly strong and the short-term economic conditions are solid. STR is forecasting just over 1% RevPAR growth in 2020 and most pundits are in 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 months.
Start with the above premise if you agree and determine the impact on your market. In most markets, supply is starting to exceed demand, ergo, expect a reduction in occupancy levels if that is the case. Further, average rate growth has flattened to 1% or so and costs, especially payroll, exceed that by a fairly wide margin. The result will be reduced operating profits unless we can find savings. Look hard for savings from productivity! These steps below include new products that are now available in the market.
Business Plan Development
Complete your research. Review your trend report and competitive set information from STR including their new forward-looking data and consider purchasing new data from Kalibri Labs. These reports will indicate respectively where you are vis a vis your competitive set and what costs are incurred by every single reservation. Your table of contents should include basic macro-economic data, hotel supply and demand, competitive environment, action plans and expected results. The action plan details who, what, when and all costs associated with each action. Keep it simple.
Meet with general managers and marketing team members of competitor hotels. Site tour each business and establish a referral program. Coordinate a market review with your franchise marketing manager if appropriate and discuss opportunities for digital marketing and pay per click. Develop a 2020 sales and marketing budget. Review the STR report, Demand and Agency 360 from TravelClick and other market intelligence and market pace reports carefully. Ensure your email lists are updated for newsletters and blasts and that you are compliant with GDPR as well as CCPA if in California.
Meet with key contacts at your brand, visitor bureau and chambers of commerce. Obtain a list of trade show opportunities, lists of your area’s top businesses and employers. Qualify key companies and individuals to create or update your own email list. Business Journals also have great lists of top businesses and employers. Don’t forget to check your database in the reservation system for any errors – compare it to the convention and event calendars to ensure peak periods are blacked out. Take advantage of your Cvent listing by promoting your meeting space with interactive Social Tables floor plans.
Develop possible press releases for the coming year along with a public relations plan and contact each segment specialist for your franchise sales staff and local tourism agency. This will help 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. The PR Plan is part of your above-mentioned action plan.
Continuously create and deliver “can’t-resist” content for your website and e-blasts. Social media has turned marketing upside down – we all need a loyal fan base and potential clients alike. Media tools like blogs, newsletters, webinars, e-books, photo-sharing and videos are all needed to keep your content robust and to “tell your story.” I was privileged to read an advance copy of the book, Stories That Stick, by Kindra Hall. It comes out September 24, 2019 and makes a point that I felt compelling. “you must master three main elements if you have any hope of moving your intended audience… across the great divide: attention, influence and transformation.” Kindra makes it clear what storytelling can do for your product.
In developing this year’s plan, remember that the world is changing quickly. Sustainability is a thing and guests care about it. Simply put, sustainability is “meeting the needs of the present with innovative solutions without compromising the future.” Guests do care about that and also want an experience — this is where a story that talks about your features and benefits is very helpful. Otherwise, our hotels are just places to sleep.
When looking for productivity, the promise of artificial intelligence (AI) is a reality and is here to stay. In our case, we are using robotics, not to supplant jobs, rather to make them more effective and efficient. As an example, we are expecting delivery of our Maidbot that will vacuum hotel rooms and corridors, allowing housekeepers to avoid back injury and reduce room cleaning times.
Lastly, when budgeting after completing this simple but critical business plan, don’t forget to budget for cybersecurity, IT and wage increases that may occur in 2020. Good luck and may some wind remain at our back a little while longer!