The sports and business worlds have a number of lessons each can teach the other, and Vikram Pradhan, global head of revenue management for Wyndham Hotels & Resorts, is focused on hockey at the moment. During a global hotel owners’ session earlier this week, Pradhan cited superstar Wayne Gretzky’s “Skate to where the puck is going, not where it has been” quote as the company’s strategy for progressing through the recovery.
“We're all taking data, information, everything that is going on today—we're trying to make sense of it all and figure out where that puck is going to be,” Pradhan said. “And once we do, we're going to skate toward that. We should start skating now because we have to get prepared.”
The goal of the session was to discuss the current rebounding hospitality landscape and what owners can do to help drive occupancy for their hotels, as well as to share tips owners can implement today to help overcome booking hurdles and get ahead of demand as the industry heads into peak summer travel season. This type of conversation is important because, as Pradhan stressed, the industry can’t thrive in today’s climate using old strategies.
“All of us hoteliers, we have this sort of crisis playbook. We put that on the shelf and every time there's a recession, we just pull it out and we start flipping through it,” he said. “One of the first chapters talks about dropping rate.”
But although that playbook was successful during the past two recessions, many hotels found out that it didn’t work in 2020 because of one key difference, according to Pradhan.
“The key difference was that it's not that people didn't want to travel. It just that they can’t travel. What happened was those who were traveling were still paying the rates that you wanted to get out of these customers, so a drop in rates necessarily did not translate to excess demand or generating additional demand,” he said. “Our guidance was always just to ride it out, avoid the temptation of dropping rates because the people who were traveling were not price sensitive.”
Ready for Recovery
During the session, Pradhan shared a look at STR’s forecast for the industry’s recovery as well as research about where travelers are heading and why they are on the road (or in the air) and traveler spend to give owners a sense of how the recovery is progressing.
“So the question is, now that we know where the puck is, what are you going to do to prepare yourself?,” he asked.
Pradhan offered four tips for owners to stay ahead of the pack:
1. Make travelers aware of cleaning and safety procedures
“Folks used to ask do I have the best room? Do I have the biggest room? Do I have the best floor, the view? Those things changed pretty quickly in the pandemic to people that ask you about cleaning procedures. They were asking what temperature do you wash your towels in?” he said. “We all have adapted to these new cleaning measures. Well, let's spread the word. And as you get the word out there, you're talking about advanced cleaning procedures. You're talking about what we do to keep our customers safe.”
Most online travel agencies offer a search filter for cleaning processes and Wyndham properties that made their processes clear on one major OTA saw a 2.9 percent incremental roomnight growth, Pradhan said.
2. Target new segments
Pradhan said it’s important to be selling in the appropriate channels, including OTAs and third parties, as well as making sure they are set up with the right room types. It’s also vital to target industries and segments that are thriving. Pradhan highlighted those guests in infrastructure, logistics and construction as well as work-from-anywhere customers as those hotels should be focusing on.
“If you see a construction project that's going on near you, you can go there down there and ask if they found local labor or are they getting labor from outside and bringing them in? And if they are bringing them from outside, where are they staying?” Pradhan suggested. “That way you can actually figure out if you need to sign a contract with them. Think creatively and target market segments that you've not thought about before by thinking outside the box a little bit.”
3. Increase speed to market
Pradhan said hotels must have special rates and promos ready to go at a moment’s notice to attract short-term demand, such as during the recent gas shortage in the Southeast. He also recommended having multiple messages and communications prepared ahead of time so hotels can be in front of potential guests faster.
“You can launch on-demand rates that will help you in short-term demand. But the key is to have it ready,” he said. “It doesn't have to be open [all the time], but you can open it whenever you want.”
It’s also important to keep terms flexible, Pradhan said, especially because that’s a strategy that airlines are employing.
“If we don't, who's going to book a trip where the airline is flexible but the hotel is nonrefundable? That's just not going to happen,” he said. “If people’s habits are still being trained by airline cancellation policies, we still have to keep our terms flexible and leverage social media accounts, leverage other media channels like YouTube, because these are places that people, again, are forming different habits.”
4. Be prepared to be nimble
“You've got to use all the data that you have, make changes on the fly, learn from mistakes and please experiment. Please experiment with rates to see how far you can drive rates, how far you can push length of stay,” Pradhan said. “You'd be surprised that some of the length-of-stay habits that are forming. You'd be surprised at some of the lead times that we're seeing in the industry. So experimentation is key.”
Being nimble goes beyond what is changed to include how often it is changed.
“The days of when we set a seasonal strategy and forgot about it or reviewed it periodically, those days are gone,” Pradhan said. “Strategy must be reviewed every day or every week.”