June 25, 2012
Are your 2013 Hotels Target, Budget and Marketing Plan Ready?
If you are thinking going for a vacation trip prior to Ramadan, well it may be just a short break trip with Fly Dubai or Air Arabia to a nearby destination.
Summer for hoteliers is always a sign for scratching numbers, looking at your segmentation, start collecting Business Intelligence information (trustworthy), read newspapers, select articles, spot the new company to re-locate in your city...
2012 Semester 1 - Evaluation
Where do you stand in terms of Year to Date 2012 Budget? are you ahead of the exercise, or are you running behind your numbers? you must analyze your figures, and understand your performance.
a) Negative Impact:
If you are in negative growth, then you need to strategically re-think your Q4. Will this be reflecting in a better mix, focus on higher rate contribution? You need to write down what went wrong:
- a wrong strategy (lack of availability, price resistance, turnaways analysis...)
- a new competitor with lower rates (don't only focus on their low rates, try to understand why did they use this strategy, do they have solid market base?),
- an existing competitor with distress inventory,
- a less performing sales team (=> go segment by segment to understand + and -),
- a sales manager that went to work for a competitor,
b) Positive Impact:
- Is that temporary due to regional situations (Egypte, Levant...?),
- Being ahead from budget is good (you may have build a low budget target), however did you gain position in RGI? (Revenue Generation Index: RGI)
- Was there any hotel inventory that go under renovation / closure? (i.e the impact of Metropolitan Hotel Dubai demolition, 255 rooms)
The basis of the budget comes from a detailed demand calendar. It's very important to map the events, conferences (Trade Centre, Exhibition Centre), sports exhibition game, trade fairs, concerts, GCC holidays (UAE, Saudi, Kuwait...), International holidays (Russia, UK, India, China, Brazil) and local bank holidays. This can be carry out by the revenue manager or the marketing coordinator.
Looking at your first semester exercise, we are working with hoteliers for which we have implemented a detailed daily market segmentation so that they are able to perform analytical analysis instead of reporting. Results: they started gaining back control of their inventory in order to maximize revenues.
It is more precise to leverage your Monday trends by explaining that your market segmentation is composed of 25% local corporate, 15% best available rate, 40% local DMC, 15% OTA and 5% crew, rather than saying on Monday we have leisure clientele. Huhh? what does leisure means? If 55% of my hotel is booked towards leisure segment, am I consider a leisure hotel? well only a detailed market segmentation can answer to you.
A real budget exercise is an activity that need to be elaborated through 90-120 days work and not 10 days.
We recommend hoteliers to implement a day by day budget for their market segmentation mix and revenues, because they will feel more in control, than programming a xx% increase, and dividing by 12 months, dividing by 30 days. That's the old school, and will not support your strategic thinking.
The General Manager or the Revenue Manager or Director of Sales, should effectively perform displacement calculations on all segments and channels to uncover hidden revenue potential. Additionally, you should analyze the real cost of each distribution channels by paying attention to the travel agent commission, agency fees, sales blitz investment, GCC trips investment, sales payroll, marketing collaterals, reservation costs, extra commission level (end of the year, 3-5% based on volume of targeted room nights).
For budget, you should also compare your year on year growth per main segments and sub segments, to make sure this tally with your marketing plan.
Marketing plan is a must for any hotel that has a strategic approach from the management. When you start managing 15-100 Million AED business, you deserve a structural approach.
Marketing Plan: back to basics
The marketing plan can function from two points: strategy and tactics. As I see, most of approved marketing plans are locked up in a book shelf, in the Sales Office, and don't move until the next season.
It should be on the Director of Sales desk at all times, to prevent that we don't follow the right strategy as outline 8-12 months back. Tactical decision to introduce new rates, or extend rates, should be record so that you could notice if your volume of bookings has made the difference...or not.
When looking at strategic information, RSVP Hospitality would recommend:
* Ministry of Finance information (GDP Growth, Inflation rate...),
* Ministry of Tourism Information (Arrivals, airport statistics, airline routes...),
* Overall Hotel + Hotel / Apartment Supply,
* Market Source by origin,
* Market demand by main and sub segments,
* Benchmark reliable online source for RevPAR,
* Geo-political opportunities and threats,
* Distribution channels analysis (local CRS provider...),
Taking in consideration, that most of hotels in GCC are growing their online sales, a part of your marketing plan should be focused on Internet marketing and Online Distribution.
Another part of your marketing plan, will be on to protect your corporate clients (individuals and groups), from giving them the best prices and ensure there are producing as per rational level. How you will communicate on that? How the sales team would be organized?
Shall you need assistance from expert, contact us at firstname.lastname@example.org or call us @ +971 50 589 3011 (UAE) or visit our website at www.rsvp-hospitality.com