In our last article with tips on pre-opening a hotel we focused on PR, the website and SEO. As a hotel management and hotel revenue management consulting company, 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.
Revenue Management
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 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 your strategy, the path of success to ROI, is not worth a risk taking on with such high an investment you are making.
Distribution
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 on OTA (online travel agencies) in loading new properties into their systems. The process of signing a contract and loading it can easily take up to 3 months and sometimes even longer.
You need to go live for sales at least 3 months prior to opening in a city hotel, and if you are a resort in a summer destination, you need to be ready to 6 month prior. Tour Operators generally contract 12 months ahead by the way.
And not to 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).
Reservations
So the hotel needs to go live 3 months prior to opening, and the website goes live 12 months before. Who will pick-up the phone?
We recommend having an assistant taking inquiry details initially. We can call back interested people once we get more organized. But from 3 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 sales office. Entering with a new hotel into the market we cannot miss one opportunity to have someone book a room. Pressure is high enough to start generating revenue. Let’s make sure we have this point of sales well trained and ready to go.
Sales
If your hotel is aiming to attract business travelers we will have to start pitching all local businesses within our surroundings that could drive guests to the hotel. Schedule visits daily to these companies from 9 months prior to the opening to win them away from the hotel they are currently using.
Give them free coupons for coffee and cake or lunch discount coupons in order to get them to come over to get to know your hotel. A new hotel has a plus which existing hotels cannot compete with. Introduce your potential clients to your services, including restaurant, meeting rooms and banquet space.
If you will also need international corporate and mice business, make sure enough travel expense s budgeted for. You will need to send a sales manager on the road to explain to travel and MICE buyers why they should start using your hotel.
Bringing in business is hard work!
Systems
Yes we 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 slected, purchased and installed between 6 to 3 months prior to the opening.
Soft Opening
It’s getting awfully close now to D-Day 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 blogger on a tour of the hotel without the burden of operational pressure of a full hotel. Reporters really appreciate all the help you can give them with preparing a story on this new hotspot in town.
Sales staff should invite corporate decision makers to test the hotel. Treat them like VIP’s. Wine and dine them, and turn them into ambassadors of your business. If you overwhelm them with an unforgettable experience they will start spreading word-of-mouth for you.
Recruiting the Team
We 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 has develop, implement and execute your strategies is even more difficult. You will need to start recruiting this team 2 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 investments necessary to do all these preparations. Don’t look at these items as cost. Instead it should be part of your investment.
Revenue management, marketing and sales staff has to start at least 12 months, and some even 18 months before the opening. Many owners think as they are managers, and are hence highly qualified, they will be able to do the work in a much shorter time frame. But waiting till the last moment and starting 3 months before 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 long term effort instead.
Opening a fully staffed hotel without guests puts your overall investment at risk. So please start in time, is better even, start too early and aim for over-performance. If you’re looking for a hotel management and hotel revenue management consulting company that can help you take your hotel to the next level, don’t hesitate on contacting us.
