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Hoteliers Learn from Revenue Successes, Failures During Pandemic

Executives Speak Frankly About Strategy Pivots for Ramp-Up Planning
Erin Cerrato, regional revenue manager at McKibbon Hospitality, speaks on a panel at the Hotel Data Conference in Nashville, Tennessee, on Aug. 12. (Jason Mallory, Event Coverage Nashville)
Erin Cerrato, regional revenue manager at McKibbon Hospitality, speaks on a panel at the Hotel Data Conference in Nashville, Tennessee, on Aug. 12. (Jason Mallory, Event Coverage Nashville)
Hotel News Now
August 20, 2021 | 1:21 P.M.

NASHVILLE, Tenn. — Hoteliers had to operate outside of the norm this past year, but through successes and failures learned many lessons.

Chris Cheney, vice president of hotel performance and analytics at Denver-based ownership, management and hospitality development company Stonebridge Companies, said getting through the initial phase of the pandemic required communication, which meant ensuring there were no silos among teams.

That resulted in daily meetings at the corporate level, with all department heads. Ownership groups were also involved, he said during a panel titled "Lessons learned: Exploring success stories (and failures) from the pandemic" at the Hotel Data Conference.

"Budget was out the window. We had to find some way to put an operating model on paper that everybody was happy with, that operations [teams] could execute, that revenue management could yield and try to find some revenue to help support the operating model," he said. "Bringing all those players together around a strategy is something we think should be done all the time, but when it's done out of necessity, we had some great takeaways."

Successes

Emily Miller, vice president of asset management at CHMWarnick, said several strategies, from streamlining labor to ramping up occupancy, proved fruitful.

On the labor front, one lesson learned was the more skilled and dynamic each person is, the more tasks they can assist with if needed.

"We have an accounts payable person two days a week in accounts payable, two days a week in [human resources]," she said, adding that one of her seasonal properties has a chef who was handy enough to also do preventative maintenance tasks while the property was closed for the winter.

CHMWarnick also had a plan for when guests started returning, the success of which varied by market and property, she said.

"I had a hotel that had a great piece of dorm/student housing [business] from September through May, and that carried us through. Coming out of that dorm business, I was getting nervous. I said, 'Guys, what are you going to do to replace this?' Fortunately, they figured it out, but it changed the metrics ... of how we measured success," Miller said.

Erin Cerrato, regional vice president at Tampa, Florida-based hotel management company McKibbon Hospitality, said her team achieved success through fostering better partnerships with external vendors and clients.

"One of our revenue managers had success partnering with [an online travel agency]. Just through that partnership and utilizing the tools and resources that the OTAs have available to us, she was able to shift quite a bit of business into our property to the point where we had several months of significant growth on our STAR report compared to what we had seen," she said.

STAR reports are a product of STR, CoStar's hospitality analytics firm.

Cerrato said her sales leaders also excelled at collecting data on out-of-order rooms at each property, and on which corporate accounts were not traveling due to travel restrictions — all of which could be shared across the company's portfolio of hotels.

JJ Mills, global director of customer success at software company PredictHQ, said his company's core focus going into the pandemic was conferences and expos as demand drivers.

As demand began to recover, focus shifted to other categories, such as district-level school holidays and academic calendars for universities to track when people would be traveling for spring break. His company also began tracking events cancellations and postponements.

Opportunities To Improve

Cerrato said her team knew hotel demand would recover, but not when and by how much in certain markets.

"I heard an analogy about it being like a ketchup bottle. You have it upside down and you just keep pounding on it and nothing happens. Then, all of a sudden, everywhere is covered in ketchup. I felt like that happened in a lot of our markets," she said.

She said her team could have been more aggressive about capturing that demand.

"We lost some [average daily rate] footing, some share in some markets. We're learning that when you see an opportunity, don't wait for confirmation, for somebody to tell you it's OK. Jump on it. Take risks," she said.

Because Mills' company solely focused on in-person events, as soon as those events ceased during the pandemic, his company struggled to get the right messaging out to its customers.

Miller said she wished her company had pushed more to bring sales teams and vendors back sooner as demand returned.

"We had gotten rid of all the third-party social media vendors. It was the director of sales and the general manager trying to run social media pages, while cleaning rooms and checking in the guest," she said. "That's the channel that our leisure travelers are looking at to make their next booking decision."

Properties that were ramping back up weren't fast enough to capture all the demand, she said.

Her team also learned that cutting back on food-and-beverage offerings led to dissatisfaction among leisure travelers. CHMWarnick's hotels were losing market share to the other hotels in the competitive set that did still have consistent offerings.

"We learned very quickly that we needed to figure out a food-and-beverage model that worked. Our goal was to at least break even in order to open a food-and-beverage outlet," she said.

Cheney said Stonebridge learned that while a full-service hotel can operate well with select-service margins, that doesn't mean it should. For a short period of time, out of necessity, it made sense. When the ramp up occurred, it took longer for those properties to get operations back to full speed.

He noted his teams also neglected to remember that not all data is useful data. He stressed the importance of examining whether the data is still relevant, because data changes daily.

"It's a trap we fell into a couple of times, and we definitely learned from it," he said. "We think that there's some trend and some stabilizing of the trend; there's really not. The further you peel back the layers of the data, it's just constantly churning."

But that's not to say data isn't helpful. While his team struggled to get a handle on how many rooms could be available to sell, mixed signals from the various properties caused confusion.

"It's OK to tell us you can't clean all the rooms. We understand it's a challenge. We need the data so that we can have an appropriate revenue strategy to yield around what we actually have to sell," he said.