Outside of ski field resorts and accommodation providers in warmer northern locations like Port Douglas, winter months can be particularly slow for the Australian hotel sector. These low season booking conditions can lead to some hoteliers adopting a ‘busy hotel is a successful hotel’ strategy, accepting lower-rated business and relying on the in-house spend in food & beverage, spa and ancillary services to boost revenue. This approach is misguided though, as guests paying significantly lower room rates are also typically less likely to spend on the spa, luxury dining or experiences needed to compensate for a cheap room rate.

Given the seasonal operating environment many properties face, how should Australian hotel’s revenue, sales and marketing teams work together to maximise revenue through the winter low season?

To operate successfully through winter trading periods, hotels need to ensure they have a good understanding of their historical performance. Once they have that, they can compare and validate their current demand forecast against those benchmarks to better understand the exact position they are in and what they need to produce to achieve their business goals.

Revenue managers also need to align with a hotel’s marketing department to develop and adjust promotions in relation to the available channel, resources and marketing budget. If you truly want to steal the limited demand available in the market, a marketing plan to execute an offer that engages a guest is just as important as the curated offer itself.

Australian hotels need to be smarter about how they price themselves and what incentives they use, or give away, to attract business when faced with lower booking periods through winter. Overuse of general incentives to attract guests can reduce the revenue coming into a property in the long run.

Incentive offers need to be tailored and personalised to each booking segment’s motivations. Hoteliers should be asking themselves questions like: “Why should I provide an upgrade to the executive or concierge floor? Or, is this customer less price sensitive and will book the premium room type no matter what because they are travelling on business?”

When it comes to incentives, personalised experiences are key to attracting guests. Affluent Millennial and Gen-Z travellers have been referred to as 'Native Explorers,' as many of them now decide to travel close to home despite the ability to go to other countries and regions. Many of these travellers choose these destinations for proximity and ease of travel, along with unique nature/wellness experiences and luxury stays. However, the definition of what a "luxury" trip includes is also changing, with younger travellers favouring unique experiences and high levels of customer service.

What motivates one group of potential guests, such as ‘Native Explorers,’ to book can be completely different to the next. Hotels need to design specific promotions for each channel or geographical region, taking booking lead time into account. For example, a hotel might consider enacting a promotion to attract corporate individual travellers, or a digital marketing campaign to attract direct booking to the brand website and the components of those offers should vary based on the audience’s needs. For any low season promotion a hotel runs, revenue targets should be established and benchmarked against. Hotels should continue to monitor booking pace and occupancy forecast, adjusting the promotion and marketing allocations while they are still in play to ensure maximum success.

When any winter season promotions have run their course, hotels must conduct an intensive evaluation process of each campaign to assess the ROI of marketing spend. A record of all promotion schemes and production should also be kept to assist with next year’s winter period activities. 

Winter periods with low demand also present hoteliers with the opportunity to fence cautiously. By creating new products that increase business during low seasons, hotels can drive demand from a new sector. The advantage of offering a range of fenced products is that market segments that find these offerings meaningful will begin gravitating toward purchasing new products. This produces previously untapped business – and the possibility of further untapped business. Fencing successfully will enhance revenues and capture existing demand based on occupancy levels and business patterns.

In seasons of lower demand, hotels must manage their costs effectively. Revenue management technology can increase efficiency and improve operational performance across an entire property, even in quieter operating periods. Advanced forecasting models or systems provide powerful insights into business demand, which assists with project planning and staffing.

For example, if a hotel can accurately anticipate lower levels of guest occupancy, it can ensure that the property is not overstaffed and carrying unnecessary wage costs in this lower revenue phase. This same principle can be translated throughout the hotel’s entire operation for better overall maintenance, staffing and inventory levels. The optimised wage costs translate into financial savings and directly benefits the hotel’s bottom line.

Hotels need to move beyond applying blanket discounts, or incentives, to attract bookings through winter. It is those hotels that monitor previous years’ booking patterns, build accurate demand forecasts and develop specific campaigns for specific audiences that are best positioned to succeed in a time of low demand.

For more information on how your hotel can operate successfully through periods of low demand, please visit: www.ideas.com

Written by: Tracy Dong, Principal Industry Consultant, IDeaS

The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.