By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
There have been and still are many necessary changes to
hotel operations to specifically address the need for viral safety in the wake
of COVID-19. But a better outlook would be to think long-term and understand
that much of the shift over the past two quarters would have come about anyway,
with the pandemic only markedly catalyzing the urgency for an evolution to the
hospitality industry.
Ostensibly the most profound way hoteliers and property
owners can build a profitable hotel in the next normal – and for the next next normal
once we are in the clear from crisis – is to abandon a siloed room revenues
model, as most identified by metrics like RevPAR and, to a lesser extent,
GOPPAR (gross operating profit per available room). With a multitude of factors
hindering full occupancies and consistent ADR growth over the next couple
years, we instead must look to how we can capture the most revenue per
available guest (RevPAG) or total revenue per available guest (TRevPAR) through
the proficient convergence of guestrooms, F&B, spa, parking, golf,
activities, gift shop and any other chargeable amenity. (To reduce confusion,
let’s stick with the RevPAG acronym from here out.)
In today’s hospitality landscape, though, the only realistic
way to achieve this goal of generating more ancillary capture is through the
deployment of integrated technologies so that the purchase of these amenities
is made as easy and as frictionless as possible, all without burdening a
hotel’s already overworked teams.
As background research for this central industry
development, we sat down with Frank Pitsikalis, CEO of ResortSuite, a PMS
provider based out of our hometown of Toronto, where he added, “What we’ve
keenly observed through discussions with our clients is that the post-pandemic
traveler wants a high touch hotel experience but without any physical
touchpoints. They value privacy above all else, where every service must be
available in seamless self-serve manner, both prearrival within the booking
engine and via the website or a branded app once guests are onsite.”
Indeed, hotels have already addressed the new demand for
this ‘seamless self-serve’ with guest messaging apps, self-check-in or
check-out, mobile room keys and a myriad of other software integrations. While
these features are essential for safe operations, most aren’t prompting or
encouraging guests to spend more. Hence, once the more immediate concerns for
Covid are resolved, hoteliers must find ways to optimize revenues from the
currently limited pool of customers.
When reviewing what hotels can do in this regard with
Pitsikalis, first to mind is having the ability to guide guests through a
series of amenities that will enhance their experience right from the room
reservation window. From the ResortSuite properties that we demoed together,
the most common ways to boost RevPAG were for dining and spa appointment as
well as in-room arrival amenities.
One specific resort example highlighted which uses the PMS,
the Watergate Bay Hotel near Cornwall in the United Kingdom, has experienced a
sizeable increase in online dining and activity reservations since marrying
these options to the website’s booking engine. Significantly, with physical
distancing measures in place, such prearrival prompting has worked to ensure
that hotel guests always have a spot at one of the hotel’s two restaurants
without a reservationist or restaurant supervisor having to reach out
individually in the week prior. This is due to the reduced capacity allowances
whereby walk-ins from locals may swoop in to claim all available seats at the
popular eateries, leaving hotel guests without reservations to fend for
themselves – and reflecting poorly on the incumbent property.
Whereas before there was some rigidity to properly
integrating these points of sale directly with the PMS, the Covid crisis has
brought to light a pressing need for holistic integrations like this. Making it
easy for guests to book additional services in a contactless manner will not
only heighten total revenues and give you deeper data from which to refine your
future marketing approach, but it will also help rein in staff costs because
manual transfer between disconnected systems is no longer necessary and more
prearrival service arrangements will let you better forecast upcoming labor
requirements.
As an essential caveat at this juncture, such tech upgrades
designed to enhance RevPAG should in no way detract from a hotel’s continued
commitment to proper sanitization and cleanliness. Rather, our hypothesis is
that these safety promises have rapidly become guest expectations and will not
act as core drivers for room bookings. Guest privacy and the ability to deliver
a host of services via touchless software portals will in fact work to boost
occupancy and overall customer satisfaction.
That is, there is a critical and often understated
relationship between post-departure guest survey results and service
utilization. The general trendline herein is that the more a visitor uses a
hotel’s amenities, the more they will enjoy their stay. With this in mind, getting
guests to eat at your restaurant, complete a spa treatment or sign up for a
half-day activity will halo positively back onto the core product – the hotel’s
rooms – in the form of improved online reviews, word of mouth and return
visits.
Given all these clear advantages, prioritizing a RevPAG
viewpoint is rapidly becoming a critical step for the future of hotel
operations. This is especially apparent for the near-term where leisure guests
are a dominant force and groups are slow to recovery, but it also holds true
for the entire decade ahead in that guests are increasingly digital-fluent and
want all services to be straightforwardly accessible in a self-serve format.
My hope is that by explaining how important it is to now
connect everything online, you’ll use the months ahead to map out what
technologies you need to make it easier for guests to purchase your services.
Only then can you maximize total revenue and develop a healthier approach to
operating in any travel marketplace.
About Larry Mogelsonsky
Larry Mogelonsky
One of the world’s most published writers in hospitality, Larry Mogelonsky
is the principal of HotelMogel Consulting Limited, a Toronto-based consulting practice. His
experience encompasses hotel properties around the world, both branded and
independent, and ranging from luxury and boutique to select-service. Larry is
also on several boards for companies focused on hotel technology. His work
includes five books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule”
(2013), “Hotel Llama” (2015), “The Llama is Inn” (2017) and “The Hotel Mogel”
(2018). You can reach Larry at larry@hotelmogel.com to discuss hotel business
challenges or to book speaking engagements.
Media Contact:
Larry
Mogelonsky
Email: larry@hotelmogel.com
Website: http://hotelmogel.com/
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