The growth of limited service hotels have remained strong and steady in comparison to their luxury counterparts. With the evolving habits and preferences of consumers while traveling, limited service hotels aren’t going anywhere anytime soon, which comes as great news for new and existing limited service hotels.
Today, travellers are increasingly more conscious of the value they are receiving when spending on travel and accommodation. As of 2019, millennials spent less than half on accommodations than their baby boomer counterparts. This up and coming generation are more willing to spend on things like experiences than on accommodations creating a demand for limited service hotels.
Being a limited service hotel does not mean that what value you can offer is limited however. We go into specific sales strategies on how to grow your limited service hotel.
What is a limited service hotel?
A limited service hotel refers to budget-friendly accommodations that don’t have a food and beverage component like an onsite restaurant. These hotels may have typical amenities like a conference room, business center, gym, pool, and laundry facilities. They are typically located closer to other restaurants and grocery stores and have communal kitchens or outdoor bbq areas where guests can cook their own food. You’ll recognize these hotels as they often sit in a cluster. Some popular brands are Holiday Inn, Comfort Inn, Radisson, Hampton Inn, and La Quinta Inn.
7 Growth Strategies for your limited service hotel
1. Get creative with your F&B
Offering food and beverage options that consumers actually want are a great revenue source. By analyzing the type of business you get at any time of year can allow you to plan and cater your F&B strategy to your customer demographic. For example, if your hotel gets many different corporate groups, then offering a tiered selection for breakfast and lunch can ensure that all your corporate groups, including the more budget conscious ones will have many options at your hotel, rather than leaving the property entirely to go to a restaurant for those meals.
Another example is say you notice that your hotel is completely booked for a music festival coming up. Depending on what kind of musical festival it is, there is a highly likely chance that many millennials will be in attendance and staying at your hotel. Having F&B options like to-go snacks and light meals in the lobby would be a great way to maximize that clientele. Things like nicely packaged, healthy meals and snacks like bars, salads and wraps that can easily be eaten while moving or in a car would definitely satisfy that always-on-the-go demographic.
2. Your front desk is also a sales team
Direct bookings is a sure fire way to increase your bottom line. By getting direct business, limited service hotels won’t have to pay that premium to OTAs and have a higher ADR on average, with less cost to acquire that guest. By educating your front desk team on business costs of an OTA and how that affects a hotel's revenue and performance vs a direct booking will give them the tools to be able to start understanding sales. Giving client-facing staff or anyone that handles the phone some basic sales training will greatly increase your hotel’s chances of converting that phone call into a booking right over the phone.
Another way to do this is having the GM lead the way. Many limited service hotels don’t have an onsite sales team or do any active sales at all. But incorporating some sales activities into the GMs role could greatly impact on sales for a small hotel, especially when they don’t have a budget for a sales team. We don’t mean to take the GM away from all of their other duties, but introducing some basic sales activities like simple prospecting that takes 5-10% of their week would be a great way to start. Find out about how to do this here.
3. Outsourcing revenue management
Due to the nature of select service hotels, they naturally have a smaller budget. Most limited service hotels won’t have a revenue manager, or a director of sales. They most likely won’t have an onsite sales team either, with most of their sales being conducted in the corporate head office remotely. That’s why we have to get crafty with sales strategies on our own.
Outsourcing your revenue management services is a highly effective way for a limited service hotel to support their revenue growth. As a small hotel, cost is the main motivating factor when it comes to most of the decisions made. By outsourcing revenue management, the hotel will save money on otherwise, hiring an in-house revenue manager on salary and commission structure. Revenue management pays for itself in the long run as it is a revenue generator. This will help the hotel reduce costs on things like payroll, turnover and work shortage and there will be more flexibility in spending on hiring and training staff. Freeing up cash will allow the hotel to spend on other essential areas of the business like marketing, sales, and property maintenance. Outsourcing revenue management to a credible source will also mean effective results and ROI because you won’t have to spend time waiting to hire and train someone-in house.
5. Get those groups!
Group business is an integral part of a hotel’s sales strategy, no matter what size. Group business tend to have one point of contact, meaning that if you’re able to build a successful relationship with them, they are more likely to stay loyal. By creating that relationship with the decision maker, hotels can then tailor offerings to the group’s needs and preferences, add value to their trip and create a personalized experience. Groups also have larger budgets compared to transient business. They spend more on average, per room on extras like F&B than a transient guest. Here are a few tips on how to tap into the group business segment.
- Make it easy to book with you. Provide information online about room and event space availability and options so planners can do their job efficiently.
- Mine your PMS for past groups that were really great and reach out. Everything from corporate groups, individual event planners, SMERF groups, non-profits and others.
- Cater your offerings to your best group business and who is most attracted to your hotel already.
- Make sure that your wifi is strong (no blind-spots please), A/V equipment works, and room set-up are fast, easy for your event coordinators so that they can focus on running the actual event.
- Build a presence on the digital channels that planners use, like different social media outlets, apps, and software, so planners will gain exposure to you.
- One-size does not fit all. Making your hotel space flexible with modular furniture, that is easy to configure allows your groups to tailor the space to their needs.
- Building relationships with the decision makers, planners, and coordinators of the group is a great way to ensure streamlined communication and a seamless event. A CRM can help with this.
- Ensure that communication is clear when letting your group know how much turnaround time you need. This way, you can host multiple events in a day and maximize revenue.
6. Build loyalty and retention
What’s harder? Making a new client, or retaining that client? After the initial cost, the cost to acquire comes significantly lower. According to the Harvard Business Review, it states that it costs 5 - 25 times more to attract a new guest compared to keeping an old one. Repeat guests also spend more as happy, loyal customers are also inclined to refer your hotel to other individuals and groups they are connected with. It is important to highlight a few things to pay attention to when thinking retention.
Personalizing the experience: Yes, people often go to a Marriott because it’s nice but it’s also consistent. You know what you’re going to get every single time. But the new wave of travellers out there don’t want the same experience every time. Maybe a corporate group is having a conference at your hotel, so making welcome cards or chocolates with their company logos on them makes that nice touch just a tad bit more special.
Great customer service shouldn’t only come from the manager. Educating, training, and empowering all members of your staff to be able to offer great customer service while addressing client concerns or questions will create a seamless experience for your guest. Most people expect the “let me talk to my manager” followed by a long awkward wait. By having your staff be able to effectively problem solve and offer solutions, that not only alleviates from the GM’s plate, but only requires a quick ‘go-ahead’ from their GM. That guest will only have one point of contact for that concern and having that issue resolved quickly without being passed around to different people, will diminish the issue whatever it may be and increase their experience.
Pay attention to what people are saying about your hotel online: reviews for just about anything are available at your fingertips. You know what they say: a person is 5 times more likely to share information about a negative experience than a good one. In a study done by Zendesk, 88% of customers read an online review that influenced their buying decision.These are staggering statistics that cannot be ignored. Travellers nowadays look up your hotel on many different platforms before making a purchasing decision and reviews definitely come into play. By paying attention to what your audience is saying, you can pinpoint real issues within your hotel that you may not have otherwise known were being said about you. Not only that, but by being active online with your guest reviews, other potential guests can see that customer service is important to you and that you’re doing something about a negative experience that may have occurred.
For creating retention with groups, a CRM software tool could be your best friend. This offers an all-in-one shop for your and your coordinator to correspond with everything needed for the event or booking. By having a database that can manage all your leads and bookings, streamline communication, and quickly send RFPs and proposals, this will make it easy for people to do business with you, making it more likely for them to book with you.
7. Be the local expert
Many travellers want to have exciting experiences outside of their hotel rooms. By building rapport with your clients, you’ll find out what they love and by being a local, you can recommend things for them to do and help facilitate their activities. By finding out your clients preferences, you can even make partnerships with local businesses.
If your clients love to work out, let them know about where the best classes for yoga or spin or where the best hikes are. Or if your clients are foodies, then suggest your top restaurant recommendations. They are likely to trust you and create a good memorable experience of the time they visited that truly amazing restaurant that they would have otherwise never have visited, based on your recommendation.
Corporate guests often want to let loose a little after a long conference so having group activities in mind are helpful for those guests. Maybe arranging a pub crawl or special tour with a group discount with a partner you’ve made in the community.
The key here is making it easy for your guests. Once they say ‘yes’, all they need to do is show up in the lobby with their credit card and you will have taken care of transport and itinerary.
8. Leverage technology
How many hotel reviews have you read that had a complaint about the hotel’s wifi? Wifi today is non-negotiable so investing on a secure, high-speed wifi with tonnes of bandwidth available to your guests is essential. Nowadays, guests are streaming, uploading, downloading for personal use but having wifi without a “blind-spots” is especially important for corporate groups that may be having a conference at your hotel. Any hiccup with wifi may interrupt a presentation which hinders that groups experience and will significantly decrease their chances of rebooking.
Making your hotel tech friendly is also important as it is simply expected from travellers today. Considering configuring your hotel to have charging stations for plugs and usb cords near the lobby. Laptop-friendly areas with plenty of plugs and open seating arrangements, having accessible outlets near a desk in guests rooms and having power banks that guests can rent for a day are all useful ways your hotel can optimize their space.
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