Seven buzzes for hotels

Seven buzzes for hotels https://wahospitality.org/wp-content/uploads/2016/01/hotels_davenport2016.jpg

By Marianne Scholl, contributing editor

You might call it the best and the worst of times to be a lodging owner or operator here in Washington.

Travelers, in 2015, have been treating our state very well, indeed. Both domestic and international arrivals at Sea-Tac International Airport are up 13 percent over last year, and key indicators for Washington’s lodging industry all show healthy growth. Year-to-date occupancy, average daily rate and revenue per available room, or RevPAR, have all risen, and statewide indicators exceed national averages on all fronts. Seattle’s enviable occupancy rate, this summer, averaged just shy of 90 percent.

Yet, despite a robust income line on many operators’ balance sheets, the expense side has everyone worried, especially in cities where extreme minimum wage laws have been upping the ante for employers. HR professionals, particularly in Seattle, see a perfect storm on the horizon. Health insurance requirements are kicking in under the Affordable Care Act, ACA reporting requirements alone require more HR support, and local labor laws in Seattle, SeaTac and Tacoma are causing payroll costs to skyrocket. What’s a hotel to do to remain competitive?

Cultivate your talent

In real estate, it’s location, location, location. For hotels, right now, it’s all about finding and keeping talent. These are the employees to whom customer service doesn’t need to be taught; they come by it naturally. They also have the skills and capacity to deliver on their promise. And as HR costs rise, due to federal and local employer mandates, they are increasingly important to the bottom line.

Lodging is a labor-intensive service industry, and it’s difficult for properties to reduce staff to offset higher payroll costs. The focus, instead, is on reducing expensive turnover. This is especially true in the Puget Sound region where a booming tech industry, an increase in hotel rooms, and Seattle and SeaTac’s higher minimum wages have thrown an already challenging labor market even more off kilter.

HR directors, in Seattle, are looking at better on-boarding of new employees and special perks, like deep discounts on rooms at related properties, to hold on to employees. And as an industry that has always offered a ladder to success, it’s time to celebrate that ladder and help more employees move up into increasingly rewarding and challenging positions.

The forward looking 360 Hotel Group, which owns and operates six hotels in Western Washington, is proactively investing in training to give employees who have demonstrated commitment and aptitude the skills and experience they need to move into managerial positions.

Be mobile

Keyless room entry, digital check-in, messaging to request room service… You name it and it’s probably already possible on your smartphone. Over the next several years, apps are very likely to become brand standards for a range of services. Staying up-to-date on trends in mobile technology is imperative not just for service but for marketing and revenue management because phones are where the action is.

Travel Weekly reports that online travel purchases will reach $116 billion next year with hotel room spending up 55 percent since 2012. While consumers are still more likely to purchase through online travel agencies (OTAs) or hotel websites, using their desktops, shopping for hotels and planning trips are now more frequently done on mobile devices, according to a study by Phocuswright and Millward Brown Digital.

Stay engaged

Digital check-in may eventually take some pressure off front desk staffing, but successful apps offer more immediate benefit. They, like good old-fashioned social media, will help your engage tech-savvy travelers and gather information on your guests that will help you deliver outstanding service.

There are plenty of examples at the brand level: In May, Marriott Hotels launched Mobile Request, enabling frequent travelers to chat with staff via mobile messaging before they even arrive at the hotel. Kimpton Hotel & Restaurant Group’s new loyalty program allows for tracking and rewarding things like participating in a property’s nightly wine hour, traveling with pets or mentioning a hotel or restaurant on social media. Tweet about your Kimpton visit and you might find a free snack in your room the next time you stay.

Go local

Millennials are all about the experience, and whether you represent an independent or branded property, a bed and breakfast or a select-service hotel, helping guests experience the local culture is simply a smart business practice. Full-service properties have the opportunity to design F&B offerings that feature local products and produce, but even limited-service franchise properties can capitalize on local offerings.

Take Wirta Hospitality’s Holiday Inn Express & Suites in Sequim. Owner Bret Wirta has teamed up with a local whale watching company to tout one of the area’s unique travel experiences. His front desk staff has gone whale watching and been coached on how to talk to guests about the trips, serving as ambassadors to this and other Sequim adventures. The property’s website hiesequim.com offers travel tips, including the Olympic Peninsula’s 10 best family attractions and 10 best backpacking adventures.

Yet even more important than being local is being genuine, says Wirta. While older travelers like the comfort of having everything the same, younger travelers are looking for unique experiences, and they want these to be authentic, not pre-packaged offerings.

Friend your enemies

Talk OTA and you will raise the hackles of many a hotelier, especially now that Expedia has further consolidated the market with its recent acquisition of Orbitz.

Many consultants, however, urge hoteliers to make the most of their inevitable relationship with OTAs.

The “billboard” effect is one of the most frequently sited benefits for keeping rooms up on OTAs, especially for independent properties that aren’t backed up by a strong brand site or large brand marketing budget.

HotelRez Resorts and Hotels recommends asking your OTA manager for reports on how you measure against a competitive set within your local area. Because selling inventory is their business, OTAs have market intelligence that can help you understand what makes your more successful competitors stand out. HotelRez also touts the value of participating on package programs to build base and protect rates. As proof that this works, it cites a 2014 Expedia study, which found that hotels with a higher than average participation in packages also have a higher ADR during all booking window periods.

Integrate

It used to be that only revenue managers and digital marketers talked about distribution. Now technology, distribution channels, revenue strategy and data science are hot topics for the industry as a whole. It’s a bit like the search for the Holy Grail: Everyone is looking for a formula that optimizes marketing, revenue management, technology and distribution, and integrated revenue strategies may be the answer. That’s because mastering your online and digital presence, increasing your conversion rates and maximizing your RevPAR is more important than ever given the consolidation of OTAs, emerging distribution challenges like Google and “alternative accommodation” sites like Airbnb.

Get involved

As payroll and operating costs rise, the stakes for maintaining a profitable business keep getting higher. That’s why it’s so important to have a strong, effective trade association representing your business in Olympia and throughout the state. You can help ensure that WLA and the WRA are even more effective in defending your interests by attending a regional Government Affairs Committee meeting this month, responding to a call to action, or taking advantage of opportunities to get to know your elected officials. Building a relationship with your state legislators, or getting to know your city council members will pay off when you ask them to consider how a bill you dislike would affect your business. For more information on your government affairs team, contact Marian Ericks, government affairs manager, at 206.920.8881 or MarianE@warestaurant.org.

(Source: Washington Restaurant & Lodging Magazine, October 2015)

Categories: Lodging, Magazine