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2nd HIT Club event took place on May 19th at the Moscow’s hotel Ararat Park HYATT.
This time attendees counted more than 30 representatives from top management teams of hotels and other hospitality industry participants.
What actions can be taken to sustain the hotels’ business in current economic climate? Hospitality industry professionals were trying to answer this and other questions during business breakfast «Revenue Management in economic slowdown: Lowering Prices or Losing Occupancy?», organized by Hospitality Ideas & Trends Club. The event was moderated by Andrey Malyshev – manager of online resource www.frontdesk.ru, and one of HIT Club’s organizers.
All participants of the event agreed that today hotels are experiencing difficult times. Thus, since the hotels’ occupancy has declined greatly, everyone lowers their prices and tries to find new ways out of the situation and at the same time to keep the hotels profitable and uphold the quality of service guests are used to.
Participants noted that it is doubtful prices will ever rise again to the 2008’s levels in the long-term perspective. So, the question is – what does one need to do today to keep their hotel running?
According to Andrey Smirnov, Regional Revenue Management Director at Marriott International, and a guest speaker at the event, the general attention should be paid to the four revenue management principles – product (guest rooms, restaurants and conference facilities), customer, response time and price. «At present time, we need to focus more on customer segments, analyze new categories of clients, which we didn’t work with before and try to attract new ones» said Mr. Smirnov. Besides, in his opinion, for different segments price policy should be different – a price and package offer for a group of leisure tourists can and should be different from that for corporate contracts or on-line reservation systems.
Mr. Smirnov also noted that it is better to use loyalty program instead of lowering prices as well as offer additional services (customized for each segment), to analyze hotel’s price strategy and develop e-commerce channels (the hotel’s website should be “live”, and be constantly updated).
Artyom Malinin, Revenue Manager at Ararat Park HYATT (the hotel sponsor of the event), and the 2nd guest speaker at the event, agreed with Mr. Smirnov. He also shared his hotel’s experience, noted that before crisis, Ararat Park HYATT primarily had clients from bank segment and finance industry, but now the situation has changed. Now the hotel pays more attention to various other groups of potential clients. According to Mr. Malinin, the hotel dropped prices about 15% in comparison with last year. In general, Ararat Park HYATT’s strategy Artyom Malinin has mentioned is not to follow the market in lowering their prices. «We know for sure that lowering prices won’t make our business grow. It does not depend on our lowered prices whether or not our clients will send their employees on business trips, so why do it?» - says Mr. Malinin.
Tatiana Loginova, Revenue Manager at Holiday Inn Lesnaya and Suschevskiy Val, and a 3rd guest speaker at the event, noted that in today’s situation forecasting as a revenue management tool can and should be used, however very carefully and differently from the usual. Forecasts can be made for the nearest three months at most, according to Tatiana’s words.
During the discussion all participants agreed that simply lowering room prices doesn’t create a needed occupancy level, and that the way out is in optimizing expenses, adding other services for guests, improving the hotel’s website, analyzing and attracting the new maarket segments.
Another question which was explored, and on which the expert opinions differed - do clients now prefer 4* hotel to 5* and 3* to 4*, has the downgrading which was so widely talked about in the beginning of the current downturn, happened? Some of the participants agreed that such tendency exists on the market, and some others had an opinion that it’s not true and that each hotel has its loyal clientele which wouldn’t change their preferences.
According to the results of exit poll, taken by HIT Club organizers, 50% of event participants are still planning to lower their prices during the current downturn in a hope to keep the occupancy levels high. About 23% of event participants are going to try to keep their prices and RevPARs on the «pre-crisis»
«Very useful event for a newly opened hotel», - Anastasia Kuznetova, hotels «Voznesenskaya Sloboda» and «Pushkarskaya Sloboda».
«Perfectly orchestrated event, thank you!» - Ali Seifelmlukov, Otel Proekt.
Hospitality Ideas & Trends Club organizers - IFK Hotel Management (http://www.ifk-
Photo:
http://www.prlog.org/
