06Dec

Disaster Struck, What's Next? Key Questions for Your Hotel

Author: Avanti Joglekar

There are many important considerations for hotel operators, specifically sales and revenue management leaders, in preparation for and following an event that significantly changes the supply and demand in a hotel market. This is a complex topic touching on many concepts, and raises unexpected questions you and your team may not have considered before.

To help your property address sales and marketing plans, demand forecasting, segmentation, pricing, and distribution, hotel staff, and IT systems, we have compiled a list of questions to consider in the event of a disaster at your property. 

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Sales and Marketing Plans

Properties may want to reprioritize budgets to stop newly-ineffective spend. Free advertising channels might be the most effective way to communicate in this time frame. Consider increasing efforts on social media, including communicating your time line well, posting updates and pictures of rebuilding progress, and potentially redirecting prospective guests to sister properties in different locations.

  • After an event, what is the expectation around demand recovering?
  • What are the broader plans for marketing from tourism boards or other agencies?
  • What can you do to ensure that your property benefits from any market-level efforts?
  • If your property is offline, what is the plan and timing to resume efforts relative to availability?
  • If your property is online, which media can you leverage to communicate your property “is open for business” via still and video images, blog posts, third party sources?
  • What are the impacts to contracted and negotiated business and what are their timelines and marketing plans?

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Demand Forecasting

All properties in affected and adjacent markets should consider a shift in focus towards using short-term data, for instance, booking pace, rather than relying on history as the primary basis for forecasting.  This will help forecasts to adjust more quickly to changing and unexpected trends.

  • What are the expected ongoing impacts to forecast lift?
  • How will you interpret temporary pickup from humanitarian or rebuilding efforts?
  • What is your plan to bridge any gaps in operational data?
  • Are you equipped to discount event-driven demand shifts when evaluating seasonality and forecasting in the future?
  • What block wash assumptions and pick up patterns are likely to change in the immediate term, monitor them on an ongoing basis to determine if shifts are permanent?

Segmentation, Pricing, and Distribution

Consider that discounting can also cause shift in segments and too much can lead to focusing on lower value guests. Prepare short term and long-term plans to revive occupancy over time without permanently impacting high end segments. If rebuilding or renovating do your market research to understand the effectiveness of new product in market and its prevailing price point.

  • How will you manage your pricing to maximize business results ethically?
  • Will your customer segmentation shift temporarily or permanently?
  • Does this event provide an opportunity to shift distribution to more favorable channels

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Competitive Set

Like many of these topics, the considerations are different depending the condition and availability of your property. In all scenarios you need to watch your comp set closely and understand that your legacy comp set might not look the same as your most appropriate comp set today nor the comp set you’ll have in the future. This may go through several iterations as previous competitors and potentially new entrants bring properties online in some cases in a different asset class. Hotels should consider expanding the competitive set they are watching and revisit their comp set frequently during the period when the market is re-stabilizing.

If Your Property is Available:

  • Which of your prior competitors are also available and which are not?
  • Does the current state of the market require expanding comp set to previously distant comps?
  • What is the markets path to recovery and how will your property be positioned once it does?
  • Might there be changes in both the comp set used for pricing and the (sometimes different) comp set used to benchmark performance?

If Your Property is Being Rehabilitated:

  • Once your property is rehabilitated will it be “better” than it was before?
  • When will your property come online relative to the rest of the market?
  • What is the timing of your prior and future competitors in this regard?

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IT Systems

While disaster plans put people first, loss of information technology functions can plunge your property into operational disarray. If IT systems are down, the ramifications can ripple throughout your entire organization. 

  • Have you lost any key infrastructure or data and if so what is your plan to replace?
  • If your property has a pause in regular operations does that provide time to reevaluate IT landscape?
  • Does the new market dynamic create a need for systems or staff that didn’t exist before?

If you have an automated revenue management system, you should watch prices closely as the shifts in supply and demand might result in price levels that are not in the best interest of your market or, in some cases even unethical.

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