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Hotelier news, tips and advice from industry experts.

Welcome Anywhere Property Managment System > Blog > 2018 > April

Derived rates are powerful tools that independent hotels can use to compete with the big chains.

As well as saving busy general managers a lot of hassle, being able to dynamically adjust rates across a batch of rooms in one fell swoop can boost revenues.

As derived rates are becoming more common, let’s dive into what makes them tick and why they’re worth leveraging at your independent hotel…

The basics

Derived rates are typically offered as a tool within a PMS (property management system) and are linked to the hotel’s online booking service and channel manager.

Historically, and without any form of derived rates tool, hoteliers have had no choice but to adjust room rates individually whenever it was within their interests to make wholesale changes.

This manual approach is time-consuming and not exactly ideal, which is why the automated features offered by derived rates are a big selling point for those who adopt them.

The idea is to set a base rate, then use that rate as the foundation on which all other rates are automatically calculated. For instance, your room-only rate could be a good starting point; the lynchpin which defines how other rates are worked out, if you will.

When you run a discount offer, for example, this price will be derived from your base rate, with a percentage of the total subtracted to match the desired promotional discount.

The same applies for room rates which include extra services, such as breakfast, an evening meal or even a spa treatment package.

Once everything is set up according to your liking, you can simply let the derived rates tool do all the hard work, so you can focus on delivering a great guest experience elsewhere.

The benefits

Aside from the obvious advantages that derived rates offer in terms of efficiency and fewer pricing errors, they bring other perks to the table for independent hotels.

For instance, you might want to adjust your rates to reflect seasonal changes, or to complete more effectively with your local rivals. There may also be times when you need to lower prices to stimulate sales when you see a quiet patch on the horizon.

Whatever clever tactics or new strategies you want to try out, derived rates will give you the ability to do so without forcing you to jump through hoops in your PMS and channel manager.

Mistakes happen, and derived rates go a long way to avoiding common errors made by hotel staff. For example, if you lower your base rate, but forget to change your discounted rate, this can create confusion among potential bookers. With derived rates active, you’ll never need to worry about such a slip-up taking place.

Derived rates also make channel management far more effective, by enabling you to make wholesale changes to rates across a range of OTAs in seconds. In a competitive marketplace, this can give you the edge, or at least enable you to respond quickly to whatever new curveball your closest rivals have thrown your way.

Wrapping up

There may be a bit of work involved in perfecting your derived rates setup, but once the cogs are whirring you’ll be glad that you put in the effort with this fantastic form of rate management.

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Video is the new normal for marketing, especially in the digital age when streaming services are so widely used.

With that in mind, here are a few ideas to help you raise the profile of your independent hotel with the power of video.

Highlight the local landscape

If your hotel is in a picturesque part of the country, guests will probably be eager to visit because of the surroundings - as much as for the quality of the service you offer.

Try creating a marketing video which showcases the beauty of the local area to capitalise on this. You could factor in things like popular hiking trails, renowned sights and nearby activities to try, with your hotel shown to be the perfect base of operations for adventurous visitors.

Create a narrative

It’s tempting to take the easy route with a video to market your hotel; think grinning guests at the reception desk, smirking chefs preparing food and smiling staff going about their duties.

This is all well and good in theory, but in practice your ad will get overlooked online unless it does something different.

You can stand out by telling a story with your video, whether it focuses on the history of the hotel and the local area, or on some other narrative arc that you’ve conjured up on your own. Whatever it is, make sure it’s original and compelling.

Start a competition

You can get guests involved in your video marketing campaigns by encouraging them to submit their own clips captured at your hotel or recorded during their stay.

Offering an incentive will help drum up submissions. You could provide a prize for the best customer-made video, such as a free room for a night for the winner and a discount for everyone else who gets involved.

Focus on fundraising

Creating video content which is purely designed to market your hotel is a great idea, but there’s only so much promotional material you can pump out. So why not get involved with a good cause, raise some cash for charity and post clips that highlight your admirable efforts?

This is a great way of killing two birds with one stone; diversifying your video output and making your hotel look socially conscious.

Consider social media

Not every video you produce needs to have movie-quality production values and an Oscar-worthy story. In fact in the age of Instagram and Snapchat, audiences are more familiar with bite-sized promos than longer clips.

Stay on top of the latest viral trends and piggyback on popular memes in the social media world if you want to make videos that engage with younger customers. All you need is a smartphone and a knack for knowing what’s sharable (speak to some of your younger staff – they’ll have a great idea).

Embrace VR

OK, this one isn’t going to be suitable for everyone, but stick with us!

Virtual reality (VR) is taking the online video world by storm at the moment, and some large hotel chains are already hooked up to this bandwagon.

VR videos let you give guests 360 degree views of your hotel before their visit. The cost of creating this type of content is always falling, so don’t be put off if it sounds too high-tech at this stage.

Wrapping up

Whatever you decide to do with your hotel marketing video project, make sure you choose something exciting and fresh, avoiding traditional approaches that people will just ignore.

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If you run an independent hotel, you might not think that key performance indicators (KPIs) are relevant. But in truth they can make it much easier to manage staff, hit targets and keep up with the big chains.

Whether you’re new to the hospitality industry or an old hand in the business, it pays to track employee performance.

Here are a few tips on how to set KPIs for your staff which will benefit the entire hotel.

Getting started

It might seem obvious, but KPIs for employees need to be related to the performance goals you’ve set for the business as a whole.

You might want to raise occupancy rates, increase per-room revenues and boost customer satisfaction. Measuring your success in each area will be tied to staff performance, as well as the broader business strategy of your hotel.

There are lots of overarching KPIs related to staffing to consider; calculating the cost of wages as a proportion of your total monthly sales is a good example.

You can also look at the number of hours that employees work across different departments and see how this relates to your booking and occupancy rates.

Most importantly you need to be able to collect this data on a regular basis and analyse it consistently. There’s no point dipping in and out of company-wide staff KPIs when the mood takes you; get a handle on the basics and you’ll be on the right track.

Considering customers

Hotels need to be focused on delivering the best possible experience for guests. Setting KPIs for front desk staff, as well as any employees that interact directly with guests, will let you see where you’re going wrong and make improvements to increase satisfaction levels.

Feedback forms can be useful in working out which aspects of a visit to your hotel are most important to your customers. If you can survey guests regularly, you’ll be able to build up a better picture of how your hotel is performing over time.

Trawling online review sites can be helpful as well, especially if you want to get genuine feedback; people can be overly polite on surveys filled out during their stay under the watchful eye of reception staff.

Informing staff

Ultimately the KPIs you set need to show staff what targets you want to hit, while giving them the tools to make meaningful changes to the way they work.

Unless they have the right information available to them, employees won’t be able to work out the best way to improve their performance.

There’s definitely a learning curve, but the process of developing KPIs for your hotel should empower staff, not be something that makes them feel overly scrutinised.

Wrapping up

If you haven’t sorted out any key performance indicators for your hotel staff, now’s the time to start. You’ll be able to reap the benefits for years to come and keep on improving your business so that guests are happier and employees feel more confident in their roles.

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In episode 6 of the Welcome Systems podcast, we chat to Lorraine Orr, Privacy and Security Consultant in the BSI Cyber Security and Information Resilience Team. The topic of discussion centres around four letters - GDPR (that'll be the 'General Data Protection Regulation', which comes into effect on May 25th).

With May fast approaching, UK businesses are being tasked with readying themselves for the most comprehensive change to data protection legislation since 1998.

In this podcast, we task Lorraine with demystifying the GDPR, and ask:

  • What is the GDPR?
  • How will it affect the hotel industry specifically?
  • What data does it apply to?
  • How does it impact paper records?
  • What should hotels do now to prepare?
  • and much more...

This is a must-listen if you want to avoid falling foul of the hefty fines associated with non-GDPR compliance. And we promise - it's not as complicated as you may have been led to believe...

Find out more about BSI's 'path to GDPR' by clicking here

https://soundcloud.com/user-568165456/the-welcome-systems-podcast-ep6-gdpr-and-the-hotel-industry-to-panic-or-not-to-panic

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Running an independent hotel can feel like an uphill struggle - especially if you stick to the same old methods you’ve always used and ignore the need to innovate.

But rather than let the big chains walk all over you, it makes sense to stop procrastinating and take action.

Here are five things you can do today to level the playing field in this competitive market.:

1. Implement price-matching offers

With comparison sites making such an impact on the industry, ignoring the likelihood of being undercut by the big chains is not wise.

You don’t necessarily need to make all of your rooms cheaper than your rivals, but it’s advisable to make sure your rates are at least in tune with customer expectations.

Matching prices with the big chain competition can lure in bargain hunters while still ensuring that your hotel has that unique, boutique, exclusive feel that you’ve worked so hard to foster.

2. Create a loyalty scheme

Getting guests to return after their initial stay is tricky, but if you offer an incentive, they’re much more likely to re-book.

Many of the major hotel operators have loyalty schemes designed to do just that, but there’s no reason you can’t recreate this on a smaller scale for your own property.

You could even factor in discounts for guests who recommend you to their family, friends and colleagues to spread the benefits even further.

3. Improve your website

There’s no excuse for having a sub-standard website that looks unprofessional when compared with those of mainstream rivals.

Makes sure your website is optimised for search engines, easy-to-use on mobile devices and targeted to win bookings in as few clicks as possible to get the best results.

Make the online booking system front and centre on every page; it’s what potential bookers will be looking for!

4. Get on top of social media

You need a presence on social media to both promote your hotel and respond to guests who may be using platforms like Twitter, Facebook and Instagram to ask questions and provide feedback.

Running your social media accounts doesn’t need to take up too much of your time, and you shouldn’t neglect them if you can help it.

The potential benefits are too good to pass up, and all the top hotel chains are already maximising their impact on these sites, so you should too.

Also remember that you can use social media proactively, both to request reviews from previous guests and to promote your latest offers to people who have stayed with you in the past.

5. Create a mobile app

Smartphones are ubiquitous today and you can assume that most guests who stay with you will have an iOS (Apple) or Android (Google) device at their disposal.

Because of this, creating an interactive mobile app is a sensible and exciting idea, and will allow you to impress visitors with what they can do from their smartphone during their stay.

From checking in and out to placing an order for room service without needing to make a call, a hotel app can be flexible enough to offer a wide range of convenient functions, thus creating a memorable guest experience.

If you don’t want the big chains to win the tech war, this is a great investment to make.

What do you think?

What have we missed? If you’re a successful independent hotelier, tell us what has worked for you in the comments section below (don’t worry – you can remain anonymous).

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