A forecast from CBRE Hotels Americas Research calls for a 10th straight year of growth in the U.S. hotel industry. Growth in the select service sector is modest but forecasted to remain steady—great news for both existing and new select-service hotels.
There’s a good reason for that trend. “Today, business and leisure travelers are increasingly focused on value, and that’s what select-service hotels offer—affordable prices combined with the basic amenities that most travelers want in a hotel stay,” says Rajiv Trivedi, VP and CDO of loyalty programs at La Quinta Inns & Suites in a 2016 Q&A with Hotel Management.
Here are 7 smart strategies to maximize the value of select-service hotels, grow business, and increase customer satisfaction.
1. Snackable and personalized F&B
Select-service hotels are seeing great success with limited F&B, according to research from CBRE. Plan your F&B approach strategically around your customers. For example, a hotel that does significant business with corporate offsite meetings might offer a tiered selection of breakfast snacks that range from premium coffee, local pastries, and fresh seasonal fruit to a more budget-conscious offering of coffee with local bagels and spreads.
A hotel that conducts a lot of business with sports teams might consider a pizza-and-movie night package in a small event space. (Make sure there will be adequate seating in a U-shape or classroom style for easy viewing; for youth teams, don’t neglect lidded cups and paper straws.)
Grab-and-go lobby food makes life easier on busy guests who want to grab something and be on their way, youth league chaperones trying wrangle dozens of kids, or business travelers who want to get some work done. Millennial travelers, in particular, are not necessarily looking for sit-down meals, but appreciate something quick, healthy, and nicely presented, such as prepared salads, wraps, yogurts, and healthy snacks.
2. Target group business
Group business is good business for select-service hotels. It has benefits that go beyond a single booking for a block of rooms: Groups have longer booking lead times that yield better, more accurate forecasts.
Because group bookings have a single point of contact, they are often more efficient and more loyal. A single purchase decision can be made for a block of rooms quite quickly, and if the group has a good experience they are likely to return to the property when they are in the area. Your hotel can create a relationship with the decision-maker for the group, tailor offerings to that group’s needs, and add value to the group’s overall experience.
Groups also produce more ancillary revenue—compared with transient customers, group customers spend more per room and more on F&B. And groups come in different sizes and purposes, which provides an opportunity for layering business in terms of seasons, segments of the week, and different size groups in different rooms simultaneously.
Here’s how select-service hotels can tap the group business market:
- Give planners a simple option to book on your website, and inquire about room and event space availability online.
- Analyze data from your CRM to identify your best group customers—corporate event planners, independent event planners, associations, non-profits, groups like sports teams, or others.
- Optimize your activities toward your best group customers, and others with similar profiles.
- Ensure that your Wi-Fi, A/V, and room setup are fast and seamless, so that planners can focus on running their events.
- Establish a presence on the digital channels planners use to build awareness of your group brand.
- Build a supply of modular furniture that can be configured in multiple ways in your event space, so that different groups can tailor the space to their needs. Take pictures of a few different setups to inspire planners and help them come up with their own configuration.
- Sales reps should build relationships with event planners and with the decision-makers for other groups, using CRM software to ensure smooth communication. When RFPs come in, lead scoring will let sales teams know where to direct the most effort.
- Finally, be exact about the turnaround time needed in your event space(s) so you can layer different events on the same day and prevent delays that undermine repeat bookings.
3. Help the front desk turn callers into customers
For select-service hotels, direct booking is the most profitable revenue stream for transient customers. Direct bookers tend to cost less to acquire, and may also have a higher ADR.
OTAs have a place in the ever-evolving booking landscape, but be prepared to optimize valuable direct bookings. Educate front desk staff on the business costs of OTA vs. direct booking. Let customer-facing teams know that with the right handling, they can convert a percentage of exploratory calls into bookings on the spot. Consider offering a small cash incentive, gift card, or even non-cash rewards to team members who close the most phone bookings in a month or pass on group leads to the sales team.
Conduct sales training for all employees who interact with guests and planners on the phone. Consider developing sales scripts with the help of your front-of-house staff so that these conversations are helpful, authentic, and never pushy. Start with something like: “Let me check those rates for you. While I’m checking, are there any questions I can answer about our location or the amenities we offer?” Then suggest making the reservation by phone so that, at the very least, it’s off the caller’s to-do list.
4. Maximize repeat business
Like groups, repeat customers are a profitable segment to grow. Customers who book repeatedly have a high lifetime value: Not only can you count on top-line revenue from bookings and ancillary items, but after the first booking, the customer acquisition cost is quite low. In fact, according to the Harvard Business Review, it costs anywhere from 5 to 25 times more to acquire a new customer than to keep an old one. Studies also show that repeat customers spend more—and don’t forget that your loyal customers will recommend you to other potential customers.
For both transient and group business, traditional retention tools like group rates and loyalty programs are effective—but don’t stop there. Personalization is a buzzword in the hospitality industry for good reason. Use data on your customers or groups to personalize guest experiences. Professional sports teams might appreciate small chocolate bars inside a printed-out sleeve that features their mascot along with your thanks.
(Picture: “Go Bulldogs!” on one side and “Thanks for staying at our hotel” on the other. Picture also: Athletes who remember your hotel fondly and want to stay there again.)
Hospitality never goes out of style: Train frontline staff on the real, economic consequences of a hospitable atmosphere and quick, effective handling of customer concerns. Forbes recommends empowering frontline staff to handle customer problems on their own. Here again, employees themselves can participate in flexible script design, ensuring they can speak with authenticity and care.
Pay attention to online reviews as well, both positive and negative. Handle them online as you would in person: thank the positive reviewers, and work to find a resolution for negative reviewers. You won’t please everyone, but negative reviewers can become loyal customers when you respond authentically to their complaints and rectify them as best you can.
For groups, use a sales and catering CRM to organize and respond quickly to RFPs, streamline communication with potential clients, and keep track of open leads and open bookings. According to CareerCast’s 2019 report, event coordinators have the sixth most stressful job in the U.S., and anything your staff can do to make their jobs smoother will earn you their appreciation, and maybe their repeat business.
5. Highlight and facilitate outside experiences
Guests are hungry for experiences outside the box of the hotel room; that’s one reason they’re spending less on hotels and amenities. Help them get out and have those experiences. Are there unique spin studios nearby? Yoga? River rafting? Hiking? Local museums? Find out what appeals to your target audience, and consider partnerships with nearby businesses.
Business travelers often have time in the evenings when they could explore a city. Maybe your property can partner with a local walking tour group, nearby restaurant, or entertainment venue to offer a unique experience for your guests. Or agree on a minimum number of people for whom a museum would offer a group discount or arrange a special tour. Don’t forget to make transportation options clear, or provide several van trips per day as an amenity: it’s important guests can get there and back easily.
6. Make a bet on smart technology
Wi-Fi is non-negotiable, and speed in both directions is critical. You’ll want plenty of download bandwidth for guests streaming music and entertainment, as well as lightning-fast upload speeds for cloud-based software—including conference presenters’ slideshows and videos. Reliability is also crucial, as Wi-Fi hiccups will not only inconvenience individual guests, but possibly event rooms full of presentation attendees.
The proliferation of travelers’ own devices has made some changes to the technology landscape in hotels. Travelers are no longer expecting hotel business centers to come stocked with desktop computers or other hardware, and instead value hotel co-working spaces where they can connect their own devices. The one exception to this is a printer — make sure to have one accessible in the lobby or business center for guest use.
Make sure that your guests can stay connected by providing ample opportunities to charge their devices. In the lobby, consider integrating charging options into the seating arrangements or providing a courtesy charging kiosk. In the room, have accessible outlets near the desk and the bed. Bedside lamps with outlets in their bases are especially appreciated, even in place of an alarm clock. To provide an exceptional experience for business travelers, consider having portable power banks that guests can check out from the front desk and bring with them throughout their day.
Your guests are likely already conducting a lot of communication and business via their smartphones. To make your services more seamless, consider a service that allows guests to text message the front desk. When guests log in to your Wi-Fi, you also have the opportunity to present tailored digital content. Use this opportunity to add more value for your guests, perhaps by providing area information, listing hotel amenities, or highlighting unique experiences.
7. Design an inviting, multi-functional lobby
A multi-functional lobby might not attract a first-time customer, but it is a good bet for turning that customer into a repeat customer. A 2018 study by Cornell’s School of Hotel Administration found that lobby seating was an amenity that hotel customers used drastically more than they predicted they would. Other amenities that people used more than they thought they would, such as concierge services and valet parking, are not associated with limited-service hotels, but every hotel can make the best possible use out of its lobby space.
To make your lobby useful, provide a range of seating options—for big groups, families, and one-on-one conversations. A combination of highboys, low tables, and couches often works well. If you have the space, set up smaller nooks that are somewhat isolated from the big group gathering spots so people have quieter options for work or phone calls. Use architectural features, distance, or visual dividers like plants or attractive screens to break up the space. And remember those travelers’ devices? Handy charging stations never go unappreciated.
Limited-service hotels can slip into a ‘what you see is what you get’ mentality. But this is a mistake. With some creativity and your radar up for opportunities, you can add to your revenue stream and enhance the guest experience.