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How to future-proof your hospitality business in a post-pandemic era

How to future-proof your hospitality business in a post-pandemic era

Hospitality businesses don’t have to reinvent the wheel, but they can convert their venues into profit centres

Hospitality

The pandemic has caused unprecedented disruption to the hospitality sector and as destinations start to rebuild and demand picks up, there is a real battle for market share.

Never before have hospitality businesses, from resorts, hotels and spas to restaurants and attractions, faced such challenging circumstances, and the pressure is on to recover lost revenues, drive profitability and deliver return on investment.

We know from experience that price wars are not the answer. They benefit no one, devaluing brands and products and diminishing returns for all. The much more lucrative alternative is to focus on demand, differentiation and think creatively with regards to both, ditching price comparisons and instead, telling potential customers inspiring stories about products and experiences.

This is where revenue optimisation comes to the fore, and there’s much more to it than analysing spread sheets. It’s about creating spaces in the hospitality environment that resonate with target audiences, meet demand and maximise profitability at the same time.

Hotels, for example, can optimise revenue by re-arranging their inventory to give guests what they want and set themselves apart from the competition.

Family travel is now booming, and customers in the high-end sector are seeking villas and suites. Hotels can therefore compare their percentage of suites and rooms versus the competition and create amazing and unique accommodation experiences that not only achieve differentiation, but command high prices per square metre.

Other out-of-the-box examples that have proved successful already include transforming underutilised hotel and restaurant kitchens into cloud or ghost kitchens for food delivery services, banquet spaces into gyms, nightclubs into luxury brand showrooms, and in one case, a shaded resort car park roof was reimagined as a tennis court.

Hospitality businesses don’t have to reinvent the wheel, but they can convert their venues into profit centres.

If you’re running an F&B business, it’s time to dust off your menu. Easy wins include identifying and promoting your highest selling low-cost products and removing slow-selling items, because less is actually more. Consumers are shunning waste, favouring simplicity and quality.

It’s also worth considering applying Google heat map and decoy pricing to your menu and highlighting your most profitable items in an appealing fashion, so guests, quite literally take the bait.

Top tips also include seasonality and bundled pricing to optimise shoulder periods, using intelligence tools to measure what sells and what doesn’t, training employees to upsell in a subtle way and undertaking a pricing benchmark against the competition.

The list goes on: reviewing the table mix and seating flexibility is advisable, as is ensuring the reservations system is set up correctly to avoid roadblocks so that tables, meal periods and time slots reflect guest dining behaviours.

Spas can take a creative revenue optimisation approach too, ensuring they have the right mix of treatment rooms and therapists, offering the most profitable treatments at peak times and comparing treatment costs per minute versus the competition. Treatment and room turnarounds, factoring in time for therapists to upsell, should also be considered.

From a macro perspective, successful hospitality businesses are those with the right revenue management and distribution structure and practices in place, and the talent to execute it, enhanced by technology that drives strategies and challenges the status quo.

Savvy hospitality CEOs understand that revenue optimisation is the cornerstone of their business, liaising with all other key departments to ensure efficiency and profitability.

This is the foundation for growth and long-term success and in a post-Covid era, should be fully leveraged in new and innovative ways to future-proof companies and overcome the challenges the pandemic has thrown our way.

Judith Cartwright is the founder and managing director of Black Coral Consulting

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