Our 10-step Method to 2021 Business Planning
Every year during late August and early September, we embark on business planning for the following year. This year has been highly unusual to say the least. So, despite the low revenues, difficult operating environment, stress and anxiety and disastrous cash flow, try to breathe and enjoy the journey. It will make the transition to the other side more enjoyable and likely more successful. Here are 10 items to put on your “to-do” list that will get you there and keep you focused!
1) Complete your research.
Business plans for 2021 must be clear, concise and simple and are most effective when done prior to completing a budget. Review macroeconomic data which currently indicates a gradual economic turnaround by the second quarter. As with previous recessions, domestic leisure demand will be the first segment to bounce back, followed by corporate transient and corporate group demand drivers once a vaccine is broadly dispersed and a feeling of safety takes hold. Review your trend report and competitive set information from STR and Kalibri Labs, which 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.
2) Develop a budget.
Budget accuracy depends on the determination made to gather correct and current market data, so again, do your research! Once you have an in-depth understanding of 2021 market conditions specific to your property, your budget will streamline operations and create strategic opportunities for your hotel, ensuring that every dollar spent goes towards boosting your bookings, improving your reputation and generating the highest possible returns. Don’t forget to budget for cybersecurity, IT and wage increases as well as legal costs based on today’s litigious environment.
3) Coordinate multi-pronged marketing efforts.
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 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.
Meet with key contacts at your brand, visitor bureau and chambers of commerce. 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, socially-distanced Social Tables floor plans. Continuously create and deliver “can’t-resist” content for your website and e-blasts. Post to social media at least 2 times per week to “tell your story,” keep guests up to date with sanitation protocols, and promote your property to domestic drive markets.
4) Create a public relations strategy.
Brainstorm and create possible press releases for the coming year along with a public relations plan. 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 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.
5) Implement a focused sales plan.
Take the time to pause and reevaluate your overarching sales strategy. Even though hotel sales have hit all-time lows during the COVID-19 pandemic, there are still thousands of RFPs flowing through the system. Create a lead form at the front desk. Review competitor web sites and all competitor social sites, including Instagram, Facebook, and Twitter. Look at all previous business and examine key marketing reports. Now is the time to strengthen community relationships and to explore creative partnership opportunities such as space sharing or creating new experiences with local vendors because local markets will recover first. Be a lobby lizard at your own hotel and talk to guests because this leads to guest loyalty and gives you timely insight on who is traveling!
6) Review your revenue management tactics.
Conduct rigorous benchmarking, prepare accurate projections and develop a responsive new business mix — these are the pillars of sound revenue optimization and the foundation of a strong post-COVID business strategy. Position your property in the right channels with software and optimize rates for your unique location and rooms. As you increasingly provide guests with an authentic connection to your area, a well-configured hotel revenue system can help you optimize these strategies and boost revenue. Do not listen to pundits who say, “do not lower your room rates.” Yes, it is better to add value than to cut rates, but do what you have to do to survive! Leisure guests are still the biggest market segment.
7) Address changing COVID-19 protocols.
In developing this year’s plan, remember that the world is changing quickly. Continuously update health and safety protocols to keep staff members and guests safe as well as facilitate meetings. Offer flexible pricing, space options and contract terms, as well as offers tailored to customer needs — such as simplified agreements for small meetings. Collaborate with planners to achieve meeting objectives while addressing health and environmental concerns specific to your location. Continue to revise signage, cleaning schedules, and food-and-beverage offerings based on regulations and local guidelines. Design efforts around this question, “Once you’re willing to travel and gather, what will be important to you?”
8) Analyze current and upcoming trends.
Perceived cleanliness is a primary factor in customer experience and a clean record in hygiene and pest control will help to ensure a positive experience, which is a key challenge facing the hospitality sector right now. High-quality sanitation protocols are essential to protect brands and reduce the threat of negative reviews in online forums and on social media.
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.
Mobile will keep influencing the industry, along with other disruptive technologies that brands will keep on incorporating into its guest offerings. Think Internet of Things (IoT), Artificial Intelligence (AI), Virtual Reality (VR), and facial recognition.
9) Integrate technology wherever possible.
It’s no surprise that the future of the hospitality industry will be powered by digital technologies. When looking for productivity, the promise of 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. Maidbots will vacuum hotel rooms and corridors, allowing housekeepers to avoid back injury and stabilize room cleaning times since we have added an extra layer of COVID preventive disinfecting. Technology is also helping to keep everyone safe. As an example, we have a room-service robot that makes contactless deliveries right to a guest’s room. The use of mobile ordering technology can also help in converting traditional dine-in F&B outlets, to takeout and delivery outlets, to comply with social distancing ordinances.
10) Be resilient.
The resiliency of hotel owners and operators has been greatly tested this year. There will be several phases to the rebound, but we will recover. Count on pent-up demand in 2021 from overdue vacations and postponed weddings, honeymoons, birthday celebrations and anniversaries. There is some comfort knowing that travelers will be back on the road in full force within two years, so review investment plans and continue to identify opportunities for cost reductions. To a speedy recovery!
