HOW TO ACHIEVE 100% OCCUPANCY
As a hotel owner, choosing a revenue strategy for your hotel is one of the most important decisions you’ll ever make. All too often, hotel owners simply opt for the status quo and use BAR with dynamic pricing, based upon the prevailing supply and demand for their region. However, the whole point of a revenue strategy is to maximise revenue opportunities for your property, or properties. Why then, would a hotel owner settle for anything less than driving 100% occupancy?
LOCATION, LOCATION, LOCATION
Traditional revenue strategies are guaranteed to encourage apathy, non-performance, and to ensure underperformance from your sales and marketing team. How has the industry come to accept this? The blame for this level of poor performance can be laid squarely at the feet of your luxury hotel marketing agency. For example, in most city locations, or idyllic tourist spots, or for iconic properties with rich trading histories, business simply walks in the door. Achieving an 85% occupancy rate is by default. Its why E.M. Statler, widely considered as the father of the modern hotel industry, uttered the famous phrase “location, location, location” almost 100 years ago.
EXCUSES, EXCUSES, EXCUSES
Whilst your luxury hotel marketing agency will undoubtedly claim the credit for your bookings, ask them to prove it. What we usually encounter in this scenario is a list of excuses, which is exactly what a less than 100% occupancy strategy encultures. It’s confirmation bias, or group think, that has become endemic in our industry. Excuses, excuses, excuses. Excuses, for why your hotel is empty in January, excuses for why your hotel is empty during COVID, excuses for why your hotel is empty… [INSERT EXCUSE HERE]. The entire point of a marketing strategy is to create value where it didn’t exist before. To drive sales, to create revenue.
Rather than look for a reason to explain failure, why not look for a reason to create success? 100% occupancy is a mindset, specifically a growth mindset and one that must pervade your entire operation. Whilst our mantra at the front desk may be “make it happen”, why then do we accept “near enough” from our sales and marketing teams? They’re probably paid more, work less hours, and take more holidays. Near enough, is never good enough – and that culture must begin with you – the hotel owner. If you accept anything less than a 100% occupancy strategy, so will everybody else. The following recent example was achieved during the COVID19 pandemic in a 1,000-year-old location, where it had never been done before. Naturally, the incumbent marketing team, the luxury hotel marketing agency, the social media agency, the hospitality consultants, all said it couldn’t be done. Then we did it. Again. Here’s how…
HOW TO ACHIEVE 100% OCCUPANCY
The Clovelly Estate Company was originally founded in 1926, however the Clovelly estate itself was owned by William the Conqueror, King of England, gifted to his wife and then had many royal associations until 1242 when first acquired by the Giffard family. Until the middle of the 19th century Clovelly was unknown to the outside world. It was partly because of Charles Kingsley’s ‘Westward Ho!’, set in and around the village, that visitors began to come.
We were originally contacted by the Honourable John Rous in October 2019, Managing Director of the Clovelly Estate Company, and asked to assist with their digital marketing strategy. When attending our first management team meeting, we outlined our intentions to create a strategy that targeted 100% occupancy for the first time in the estates almost 1,000-year history. We also outlined a strategy to double the ADR from £90 to £185 whilst removing any form of discounting and were met with the usual derision by the incumbent marketing team. We’ve grown used to being told “good luck with that” or “it can’t be done”. This always happens, shortly before we achieve exactly what we set out to do.
In fact, in our experience, when a location is as tranquil and idyllic as Clovelly – business simply walks in the door which masks poor marketing performance. Our task was to go from 65% occupancy to 100% occupancy and we set about creating a Service Delivery Plan with a series of targeted workshops and engagements to immediately elevate marketing performance for the two hotels, pubs and visitors centre within Clovelly. After researching the Devon and Cornwall tourism sector and forming a deep understanding of the market, it became clear that social media marketing would be the best tool to quickly bring about a significant shift in the customer dynamic within the Clovelly Estate.
After careful analysis of our options, we decided a Facebook and Insta campaign to target young families would be the best way forward. The current state of the Clovelly marketing team’s effort was too focussed on print marketing and discounting which simply couldn’t be measured or had a negative effect. By analysing Google Analytics and gathering as many data collection points as possible, we discovered the main visitor (buyer persona 1) to Clovelly was a 50+ year female, with interests in housing, environmental issues, and family-based pursuits. Their location was small town based and household income was low. We realised this was precisely why the REVPAR was so low across the Clovelly hotel estate, and that by targeting young families with a higher disposable income we would drive up spend throughout all the retail outlets within the Clovelly Estate. We also decided to target young couples who travelled independently, seeking Insta fabulous hotspots and gourmet experiences.
We sought out strategic alliances and hosted a Joules photoshoot which mirrored our desired buyer personas, and the results were almost instantaneous in changing the visitor demographic to the Clovelly Estate website. We hit the ground running in 2020 before the global COVID19 pandemic arrived at the end of March 2020 and the village closed as a visitor attraction. At this point, we could have been forgiven for making excuses, or simply choosing the easy option and stepping back from all social media activity to avoid attracting negative attention which so quickly followed companies attempting any semblance of promotion. Our strategy became an exercise in predicting the future, we immediately began asking “Post pandemic, who will be the first people to travel again?”. Or in other words, who are our new buyer personas? And, we asked “Who could we support and welcome to Clovelly as soon as we were safely able to reopen?” without damaging the brand during a pandemic.
We designed and implemented a new social media messaging campaign with the proposition “Love from Clovelly” and began offering support to NHS staff and Blue Light Scheme members. We promoted the use of village pantries to provide food to the community and introduced a ‘Pledges on Sledges’ project to deliver food to those in need from the estate hotel kitchens. Our efforts were choreographed through a luxury hotel PR campaign that catalysed our social media campaign with many excellent articles placed through our network of journalists and publications, such as the British Travel Journal, culminating in securing a slot on BBC 1 immediately following Her Majesty the Queen’s address to the nation during a socially distanced VE day celebration. Our strategy went viral with the accompanying Facebook posts receiving over 350,000 Facebook views. Enquiries and bookings flooded in and the KPI’s to measure our success (ADR, Occupancy Rate and REVPAR) went to exactly where we had predicted.
As the estate reopened in August 2020, we introduced an electronic ticketing system for the first time in Clovelly’s history which allowed us to increase and monitor visitor numbers whilst gathering further data. We also introduced a free WIFI network throughout the estate powered by Cisco Meraki which enabled us to count footfall via Bluetooth beacons which, when compared to online ticket sales, enabled the estate to calculate lost revenue to visitors entering the village without tickets. Using this data driven design, we created a messaging strategy based upon the proposition “Nature, Community, Connected” and embarked on an active social media campaign to drive up hotel occupancy rates throughout the estate. And the results were exactly as we predicted. With occupancy rates at 100% and our ADR doubled, we achieved what “couldn’t be done”. Our Insta posts throughout the pandemic featuring beautiful shots of the Clovelly Court Gardens and idyllic posts from across the estate resulted in the accolade of ‘Most Instagrammable Village of the Year’ for the year 2020 – having captured over 134,353 Instagram captures. Finally, we connected the Chef’s with the gardens and began promoting the produce found on the estate such as Clovelly Longhorn Beef, wild garlic, lobsters from the bay to reach the intrepid staycationer looking for a weekend break from the city. And the final measure of our success was in the financial reporting at year end. Prior to our engagement, the financial reports for December 2019 showed a profit of £209,291 and in 2020 this had doubled to an annual profit of £464,453. Despite our limited opening schedule, restricted by COVID, we sustained a 100% occupancy throughout 2020, had doubled ADR and significantly increased FNB sales to our new Insta fabulous guests. So, the next time your marketing team scoffs at the suggestion of achieving 100% occupancy at desired ADR – consider if they’re providing your business with the best Return on Investment for their services, or if they’re simply making excuses for non-performance. If it’s the latter, then perhaps it’s time for a new revenue strategy.