It’s a hotel industry standard but the old saying that “the most expensive room is an empty room” has never felt more relevant than right now. When the lockdown from the Coronavirus eventually lifts, the challenge of filling the empty room will never have been greater.
Firstly, some benchmarks…
Average Occupancy rates of 75% – 85% were the norm, pre-COVID 19 – This is typically based on a city-centre location (of varying sizes). Airports and transport hubs can have a slightly higher rate, up to 95%, whereas holiday resort locations are obviously much more seasonal. Many are estimating that it could be the summer of 2021 before we start to see these kinds of levels, but that’s where we’re aiming.
Seasonality is a huge factor on empty rooms, but so are days of the week. It will depend on the hotel, but weekends are typically for leisure guests and weekdays are more corporate. Friday & Saturday nights will likely be the best, most booked days, whereas Sunday will be a struggle (many hotels will try to offer better deals if the duration of the stay includes Sunday night).
How far in advance of the check-in date are most bookings confirmed? Again, this really depends on the hotel location. A ‘City centre’ hotel has a peak around 14 days ahead on average, whereas an airport/transport hub is around 45 days. Resort hotels will obviously have a much higher ‘lead time’ for peak-season bookings. Different types of travellers (business vs leisure) will also book differently but a window of 10–30 days for most bookings (outside of resorts) is typical. The hotel sector keeps up the mantra of “data, data, data” and in this case, tracking actual occupancy against your target allows you to be much more proactive about potential empty rooms.
How To Fill Empty Rooms
Focus On A Customer Segment
Depending on your location, you will be more attractive to a certain type of traveller. ‘City Centre’ and you’ll be more used to seeing business and short-break/weekend travellers potentially; ‘Rural’ and it will more likely be leisure or holiday use; and a classic ‘Resort’ location speaks for itself. It all sounds very obvious but the point is you can’t go after everybody all of the time. Focus on the customers that mean the most to you and know as much about them as you can – their attitudes and needs, the media they consume, etc. Keep on trying to reach them with the right message, at the right time – take into account the day of the week, the season, and any external events that might be impacting or interesting to them. Easier said than done, but this is ‘Marketing 101’ – don’t spend the money until you’ve tried to get this bit right (oh, and never give up!).
Work Your Customer Email List
For anyone who has stayed with you before, let alone multiple times, reach out to them and be front of mind when they do eventually begin to plan for travel. Give those customers the better deals or some other additional incentive that perhaps wouldn’t be available to someone booking for the first time. Well-thought-out, well-written emails are well-received by customers that already like you. Big businesses call this a loyalty scheme – you can call it just being a great business that wants to share some love.
Be inventive around your pricing and offers to fit the target customer. Here’s a few obvious ones – book Sunday and get a lower rate for Saturday / Monday night; book ‘X’ nights and get another free or discounted; a straight % discount on a particular day; minimum length of stay restrictions (“MLOS”) on popular days to encourage booking an extra date with the popular date, etc. Also, many add-ons have a high perceived value for the customer but are very low-cost in reality to the hotel – for instance, a cup of coffee actually only costs a few pence/cents to make, and why isn’t WiFi just free everywhere?
Try Meeting The Customer In The Middle
If a would-be guest contacts you directly looking to do a deal on their stay, why not make their day (and yours) by agreeing on a price. To make it easier for you, make sure you already understand your revenue / occupancy targets for that day / week (and how well you’re doing against that) so you know what price will really work for you. At the same time, have a number of low-cost (to you) extras readily available that you can throw into the conversation to sweeten the deal. This does not make you a ‘discount hotel’ – just do it when it makes sense to your business.
Finally, one rule holds true, above all. If you strive to always surprise and delight your guests, it generates not only a lot of goodwill, but also great word-of-mouth referrals. It will be the best and cheapest marketing you will ever have!