How to pre-open a hotel [Part Two of Two - distribution, revenue management, sales]
In the first part of this article we discussed tips for pre-opening a hotel, focussing on PR, the website and SEO.
We will now expand our pre-opening checklist with key points concerning revenue management, distribution, reservations, sales and the systems needed to make your success story complete.
Yep, you are thinking straight, mission control, when should they start? Your chief number cruncher should be part of the project from the first moment.
I would say even before the general manager (read operations manager) even joins. He or she will be able to help you with working through the numbers to get to a realistic business plan for the investors.
The implementation of revenue management should start no later than 12 months prior to opening.
Segment strategies, demand calendars, pricing grids, competitive rate surveys and a lot more would need to be developed. This is a very detailed and time consuming job.
Running last-minute on the strategy is not worth the risk, especially when taking on such a high investment which most companies are inevitably making.
Contracting distribution channels is another task that takes more time than anyone can imagine.
You are not only dependent on your own team, but also on the speed of online travel agencies to load new properties into their systems.
The process of signing a contract and loading it can easily take up to three months, sometimes even longer.
You need to go live for sales at least three months prior to opening in a city hotel, and if you are a resort in a summer destination, you need to be ready to six months prior. Tour operators generally contract 12 months ahead, by the way.
And don’t forget the dreary task of convincing distribution channels to contract your property and publish it live for sales even though you don’t have your final permit (fire safety etc).
So the hotel needs to go live three months prior to opening, and the website goes live 12 months before. But who will pick-up the phone?
We recommend having an assistant taking inquiry details initially. You can call back interested people once we get more organized. But from three months prior to the opening the reservations call center needs to be up and running.
This department as often seen as an operational one, but in fact it is purely a sales office.
Entering with a new hotel into the market you cannot miss a single opportunity to have someone book a room. Pressure is high enough to start generating revenue.
Make sure you have this point-of-sale well-trained and ready to go.
If your hotel is aiming to attract business travelers, you will have to start pitching all local businesses within its surroundings, hopefully driving guests to the property.
Schedule daily visits to these companies from nine months prior to the opening to lure them away from the hotel they are currently using or recommending.
Give them free coupons for coffee and cake, or lunch discount coupons in order to get them to come over to get to understand more about the hotel.
Introduce your potential clients to the hotel’s services, including restaurant, meeting rooms and banquet space.
If you will also need the international corporate and MICE business, so make sure enough travel expense s budgeted for.
You will need to send a sales manager on the road to explain to buyers why they should start using your hotel.
Bringing in business is hard work!
Yes, lest we forget, you will need some technology as well. You will need a PMS, web booking engine, CRS, GDS, channel manager, rate shopper, CRM.
All need to be selected, purchased and installed between three and six months prior to the hotel’s opening.
It’s getting awfully close to D-Day now and all should be ready. However, often we opt for a so called soft opening to quietly open the hotel. It allows for the staff and systems to be tested and fine-tuned.
Moreover it is a great opportunity to take press and industry bloggers on a tour of the hotel without the burden of operational pressure of a full property.
Reporters appreciate all the help you can give them with preparing a story on a new hotspot in town.
Sales staff should invite corporate decision makers to test the hotel. Treat them like VIPs. Wine and dine them, and turn them into ambassadors of the business.
If you overwhelm them with an unforgettable experience they will start spreading the word quickly for you.
Recruiting the team
People tend to overestimate how easy it is to find a good management team. Experience has taught owners opening hotels it is not.
Moreover, finding a highly qualified pre-opening team that will develop, implement and execute your strategies is even more difficult.
You will need to start recruiting this team two years before the opening to be able to find the right people for the job, and have them start in time.
Summing it up
As you can see, there is almost no time to waste when it comes to opening a hotel.
Pre-opening budgets have to reflect the investment necessary to do all these items of preparation. Don’t look at them as a cost – instead it should be part of your investment.
Revenue management, marketing and sales staff have to start at least 12 months, and some even 18 months, before the opening.
Many owners think that they are managers, and are hence highly qualified, so will be able to do the work in a much shorter time frame. But waiting till the last moment and starting just three months before launch will turn out much more costly.
Also don’t put your entire marketing budget in the grand opening!
This is just one day, and it will be impossible to reach enough potential business to fill your hotel in the long run. Marketing is a constant and long-term effort.
Opening a fully staffed hotel without guests puts your overall investment at risk. So please start in good time!
Better than that: start early and aim for over-performance.
NB: Learn more about hotel pre-opening strategies.
Patrick Landman is a contributing Node to Tnooz and founder and CEO of Xotels. This hotel management group assists independent hotels with revenue management, online marketing and internet distribution strategies.
They offer outsourcing services, coaching, consulting and training. In his blog, Patrick challenges hoteliers to think out of the box and not to accept the established order.
Through a passionate drive for growth and improvement he brings creative tips, ideas and best practices to the table that can help hotels drive up their bottom line.
In previous roles he has helped to develop businesses like RateTiger and Hotels.com into industry leaders.