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Are your 2012 Hotel Targets, Budget and Marketing Plan Ready?
publication date: Dec 21, 2011
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author/source: Patrick Landman @ Xotels
Are your 2012 Hotel Targets, Budget and Marketing Plan Ready?Did you make your 2012 budget already or are you right in the middle? What methodology are you using? Are you simply adding a 3% to 5% each month based on last year's performance? Or are you really putting your teeth into it and drilling down per segment, per channel, per account, per day? The basis of the target or budget lays in a detailed demand calendar. Get a clear overview of what drove revenues each day. Map the events, conferences, expositions, trade-fairs, concerts, holidays, vacations, long weekends, etc to 2012. You will start seeing a clear shift already. Perform displacement calculations on all segments, channels and accounts to uncover hidden revenue potential. Incorporate channel distribution cost like travel agent commission, agency fees and marketing investments, payroll for sales, marketing and reservation, to determine the true net value of each segment. It seems though not everyone goes into as much detail when making their budget. I have to share with you a funny story to budgeting with you. So we are working with many different hoteliers, and in this case it pertains to management of a resort. Hotels in vacation markets for many have been influenced (indoctrinated) by tour operators on how to manage their property. As a result budgets are made per person rather than per room, meaning that the total revenue objectives become ‘flexible' if measurement of results does not incorporate enough factors. In this particular case the hotel's management was under the impression the hotel was performing on target as the correct average rate per person was achieved. Unfortunately the average occupancy per person per room was actually 20% lower than normal, which made it impossible to reach total revenue target, because the average room rate was totally off. Hold on, it gets even funnier. When we were working through the budget for each month, we noticed that several months had targets at revenue levels below last year. Upon probing the reasoning behind this, we were explained that some tour operators had informed them they were expecting a 10% less bookings from a particular country. No one ever raised the thought to initiate partnerships with other distribution channels to offset this possible decrease in demand. Capturing more market share, or penetrating new markets was just not in their mindset. Sorry, I just had to get this rant of my chest. But unfortunately it is very typical for our industry. Especially in resort hotel markets, tour operators have for too long influenced hoteliers on how to run their business. Hoteliers need to get more strategic insight and understanding of the financial side of the business. Moreover they have to become more creative in methods to increase the revenue performance of their property. An industry colleague I respect highly called me last week, asking if I knew of any online tool which helps hoteliers developing a professional marketing plan. Not just a standard one, like most hotels punch out, listing a few trade fairs and shows a % increase per segment. No, he was looking for a system that really guides you through every detail and forces you to look at all aspects that need to be incorporated. And he is right; hotel marketing plans in general are too superficial. It is time they are taken to a more professional level, and become complete. Hotels are multi-million dollar or euro businesses and they demand an expert strategic and structural approach. So what are elements you need to incorporate in your 2012 marketing plan? Taking into consideration the continuing growth of online sales and the quick adoption of mobile technology by consumers, we have put together some questions that will need your attention in 2012: Internet Marketing
Online Distribution
As you can see many things have to be considered and included in the hotel marketing plan. We need to look at these aspects of the business, and many more, as they influence your financial results. I hope these thoughts will help you to make a more complete hotel marketing plan for 2012. Cheers, Patrick Landman - Xotels |
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No
time to lose, 2012 is almost here. And a good plan isn't made
overnight. How far are you with your targets, budget and plan of attack
for next year? What REVPAR and GOPPAR do you need to achive? Is your