Recover a Distressed Hotel – What to doJack Miller
ROOM FOR IMPROVEMENT
Your hotel is financially distressed and the bank can come to collect. Fortunately all is not lost. Getting the distressed property off your hands might make sense now. However, while working with our clients, we have found that such a property’s net worth is much greater if it remains open for business. Is your hotel distressed? Here is what you can do to turn things around –
Let’s face it. You need to get in more paying customers through those doors and fast. How do you do that? One of your best bets is to offer your guests something that they will appreciate at a price that is better than what your competition offers at the moment. But won’t offering perks on the cheap deplete your finances even more you ask? Well, that depends on how you implement your marketing strategies. For example, if you plan on drawing in more customers with free breakfast make sure that you only offer the perk for a limited period of time. More people are going to try to take advantage of the perk. Your occupancy rate may soar but your attempts to keep your customers fed might cost you more especially if the same people decide to stay for longer. Controlling how much you spend will be much easier if you, say, offer the free breakfast perk during times when business is slow. In other words, don’t offer it during the holiday season. This will help you assess whether your implemented strategies are working.
DEVELOP MORE SOURCES OF REVENUE
Of course, not all perks have to be free. You can prevent yourself from selling your property by introducing some additional sources of revenue. You do not have to keep your prices too high. For example, your employees can recommend a suite for 30$ more than the regular two bedroom room that a certain number of customers book.
Remember, actual value is not perceived value. Do not offer perks for more than what they are actually worth to the customer. For instance, if a customer thinks that he can get better value from your competition that charges $5 less for the bottle of wine that you charge $10 for, he might decide to change hotels.
KEEP YOUR EMPLOYEES HAPPY
Unfortunately, motivating your employees to stay chipper might be a challenge once they find out that the place they work at is well on its way towards financial ruin. Keep rewarding them for their achievements. It is well worth the cost. Once they feel motivated there is no way why they won’t become effective ambassadors for your hotel. Happy employees will go above and beyond to ensure that each customer’s stay is a pleasant one. While working with our clients, we have found that initiatives as these often lead to repeat visits or recommendations. Running a distressed hotel is an ongoing challenge. It requires commitment and tenacity to recover a property that has gone belly up.