HOSPA Webinar - 6th August, 2020

HOSPA + Profitroom: How to get guests into your hotel, More bookings more profitability

 

The unpredictable outbreak of the coronavirus pandemic has left hospitality businesses around the world struggling to generate income. However, central to any hotel recovery plan should be developing a direct booking strategy. 

Our CEO, Jane Pendlebury talked to Samantha Williams, Market Lead at Profitroom, Samantha Bailey, Port Lympne’s Hotel & Reserve, Sales, Marketing, and Fundraising Commercial Director along with Tony Kelly, Managing Director, Port Lympne’s Hotel & Reserve.

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This webinar touched on topics such as the clear trends we have seen in the gradual recovery in the volume of bookings, how to make the most of the surge in demand and most importantly, how to achieve high direct booking rates. 

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Watch this webinar and secure your future, with simply more bookings. Guaranteed.

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ATTENDEES

• (JP) Jane Pendlebury - CEO, HOSPA

• (SW) Samantha Williams - Market Lead, Profitroom 

• (SB) Samantha Bailey - Sales, Marketing and Fundraising Commercial Director at Port Lympne Hotel & Reserve

• (TK) Tony Kelly - Managing Director at Port Lympne Hotel & Reserve.

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Agenda

00:00 Introductions 

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00:00 SW: Today we’re going to talk about the success of short bookings and particularly the hospitality industry getting back on its feet. At Profitroom, as a company, we’re dedicated to making hotels more profitable through a variety of products, including booking engines, channel managers, CRMs and more.

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Joining me today are the Port Lympne team, who have been hotel partners of Profitroom since 2017. We’ll come onto their success a little later.

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02:00 SW: Something we wanted to cover first of all was some of the statistics we’re seeing since the reopening of hospitality in particular.

One of the first things we’re going to look at is the search volume. Here (on-screen graphic), looking at the history of search volumes by lots of different countries. As a company, we have a strong European client base. Not just hotels and resorts in the UK< but also in some key European countries as well.

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03:00 SW: Here we can see a spike in demand for the search term ‘hotel’. We can see where it’s dropped off and where it’s starting to pick up. It’s been a global impact, but it’s comforting to see the spikes and the trends almost mirroring where we were (before the pandemic).

The next section here is hotel traffic (on-screen graphic) and this is where we see the pick up of bookings again. Because, almost overnight, bookings bottomed out for hotels and resorts We went into lockdown here in the UK on the 23rd, and hotel traffic pretty much fell to zero, with 6 sessions on average. Over time we can see where those sessions have increased, and we can see a spike around press announcements, and when Bori John announced reopening, we can see the steady increase of traffic.

All of these statistics are available on our website on our live corona dashboard, which comes directly from our data.

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11:04 SW: The next section looks at booking dynamics, focusing on YoY performance and directly compares the impact of direct and OTA bookings. A huge challenge for hoteliers is OTA reliance, with hotels struggling to become more profitable as OTA commission takes up a huge chunk of online reservations. Since the pandemic, we can see here the growth of bookings.

We can see channel manager bookings - OTAs such as Booking.com - here (on-screen graphic) but we can see that direct bookings recovered first. We;ve identified that this comes down to trust, so people aren’t as price-led, but they want the comfort of booking directly with the hotel, and their cancellation policies as opposed to the OTA and so on.

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11:05 SW: Now is the time to focus on direct booking strategies.

We can see here, from our clients in the UK there was a huge surge on coastal demand. It’s not uncommon, and almost all of our clients around Europe have actually had a really big spike in domestic demand, particularly as countries went into lockdown themselves.

Searches were up over 700% in coastal areas compared to this time last year for last-minute breaks. There were clear spikes in the wake of press announcements on reopening measures. 

Interestingly, we can see how that has affected direct bookings as well. We can see the mix here, into 2 different sectors. Leisure on lef, and business on the right. Today we’re focusing on the success of the leisure, which we’re seeing a lot of. Corporate bookings though are definitely struggling.

In terms of room nights, how does that look? With the domestic market increasing we have seen an extended stay period for room nights. Taking a look by segments, we can see how room nights have increased.

These are room nights per booking, and there are spikes. Interestingly its; flipped a little. We’re noticing more bookings coming in during week days with people working from home and also on furlough.

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11:07 SW: Key takeaways: Hoteliers on average have seen a 356% increase in booked revenue. This is the amount of transactions taken through the booking engine.

This is influenced by lots of factors, availability and occupancy being two of them. Domestic demand also has an influence. 

In June, when things started to reopen there was a 356% increase and this continued to grow in July. The same can’t be said for business bookings, but at least it is going in the right direction.

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11:08 SW: In August, particularly in leisure, and even more so for coastal and luxury hotels, occupancy is well into the 90% bracket.

The typical booking season has also extended. With August fully booked, the extension of the summer has gone into September and October. We’re encouraging hoteliers to look at their rate strategy in the wake of this, and suggesting they return to rack rates or top bar rates to help make up the shortfall from the previous months and recoup lost revenue.

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11:09 SW: This brings onto revenue performance. We can see the average booking rates for leisure and for business, and we can see how they’ve increased. Interestingly, despite low bookings, business rates have still increased. And leisure rates have increased as well, on average by 32%.

There’s been a change in booking dynamics with a flip of demand pricing. Before customers would determine the price of a rate based on demand, competitors, and the market, however, now consumers are looking for safety, security and trust in the brand. This enables hoteliers to charge much higher rates if they can provide that comfort.

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11:10 JP: POLL: Since reopening, have you sold more or fewer packages (with inclusions such as dinner)?

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Results: More: 21% Less: 11% Does not apply/stayed the same: 68%

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11:10 JP: That’s interesting, does that play out at Port Lympne as well, Tony?

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11:10 TK: Not so much. As a resort, we have a fairly inclusive experience anyway. One of the things that played in here with COVID restrictions, was bookings needing to be required in restaurants and animal experiences. We were much more conscious that we needed to get things booked on quicker than we normally would and soon after guest arrival. We actually put that at about-face and went after it fairly early, with experiences booked in advance before people even got here. So at Port Lympne, we went after packages fairly early. We’re pretty full, but all of those experiences and our restaurants are filling up as well.

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11:11 SW: So, Tony, from the statistics we’ve shared today, do you agree with those, are you seeing those patterns as well, in terms of increased ADR, and occupancy? How have you reacted as a business to that?

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11:12 TK: Like a lot of others in the leisure sector we’re seeing high booking volumes. I think we’re at 99.2% occupancy for August. It was similar in July, so we really did hit the ground running, which was fabulous having lost 3 months.

In terms of average rates, it hasn’t been as strong as 30% in July and August. There’s a couple of reasons for that. There was a fairly strong amount of business already on the books for those 2 months, as people had held on to bookings in the hope of some sort of holiday in the summer. So we couldn’t really shift the rates. Plus we had an awful lot of business on credit from March, April, May, and June, which we had to try and book in but couldn’t put everyone on the new rates. Thirdly, our premium accommodation, such as lion and tiger lodges, which is at the very top end of our rates, these are sold well in advance. And they’re like hen’s teeth for consumers, so let those reservations go at your peril really.  

That said, looking into September and October, we’re much closer to a 30% increase in ADR YOY for September, and it’s closer to 35% ADR in October. Without those factors previously mentioned having such an impact, we were able to benefit from the demand and increase our rates.

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11:14 SB: Our sales team have had 400 emails this weekend, with 80% saying “Your website is broken, I can’t get booked for August”, whilst ignoring the sold out signs. We really have seen that absolute demand, with people desperate to get on the waiting list.

I definitely concur about the high end accommodation going first. It’s high end, mid-tier, and then it’s a tiny mop up and it’s all being done organically, so definitely agree with the trends you’ve mentioned earlier.

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11:14 SW: Yes, that’s great to hear and we’re seeing that across the board. Even in hotels we’re seeing suites and more expensive room types going first, which hasn’t always been the case. Tony, what challenges did you face when reopening other than having to move bookings back into future months?

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11:14 TK: I’ve written more risk assessments in the last few weeks than I ever wanted to! We’re a charity as well. The Aspinall foundation runs the 2 parks here, so everything we do here is done for conservation purposes. With 600 acres here and 100 acres at Howletts, when everyone got back from furlough we realised the weeds were considerably overgrown with an awful lot of work to do. So we put out a DIY SOS, and had over 1,000 volunteers look to help to try and get the park back up and running. We need more if truth be told. However, we did have a volunteer force that helped us prepare the assets for reopening. We spent an awful lot of time trying to understand government announcements, putting that into risk assessments, training staff, including appointing a compliance officer who’s been working flat out. It’s been very challenging.

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11:16 TK: We’ve been answering people’s complaints, as we are getting them. People  are complaining about social distancing, which is hard as despite having measures in place, we’re reliant on the public to abide by it ad can’t enforce it. A lot of management time is taking up just trying to manage that. That’s almost the biggest risk to our recovery. As long as we can avoid local lockdowns or an outbreak in one of the restaurants here, then we will recover from this a lot quicker than we anticipated when looking at cashflow in March. We just have to manage it as closely and carefully as possible.

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11:17 SW: That’s great to hear. We’re seeing that, particularly in the luxury sector, many are bouncing back quickly and seeing the same results. You mention the operational challenge, but how has online technology made reopening easier?

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11:18 SW: Profitroom’s services are providing four fold benefit. Number one is usability. It’s very easy to use. Secondly, the training programmes really support the managers in what they deliver. The team at Profitroom, Sam in particular is available morning, noon and night and is a real extension of the team here. We have a fantastic working relationship which has played a real hand in our recovery. Lastly, it’s the future proofing that Profitroom is helping with in terms of a new website, improving conversion rates and customer journey.

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11:19 SW: You’ve got some exciting news as well. Did you want to share more on that?

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11:19 TK: We were in the process of building the business here, but in March everything went into lockdown, including building projects. But one thing the growth and demand has meant is that we’ve been able to pick back up building projects that had been put on hold, including 5 star units such as our wigwams as part of our plans for Leopard Creek, which will fit alongside our Lion Lodge and Tiger Lodge experience.

Leopard Creek will open by Easter next year, whereas before that when going into lockdown we anticipated finishing in Easter, as opposed to opening. So that’s one of the advantages of where we are at the moment.

Another exciting development is turning 15th century Wealden House with its 10 bedrooms into Giraffe Hall. This still has 2 years to go, but it will include a new restaurant as well as an additional 15 units of accommodation in the garden, which ahead will be in the high end bracket (£1,000  night), so we have extensive plans for the future.

In total we have 81 units of accommodation at the moment in 13 different styles, but we’re looking at 126 units in 17 different styles within the next 2 years. We were a bit upset to put them on hold, but now we’re pleased and motivated to have them on the go again.

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11:22 SW: That might be an interesting point for the people listening actually. With hotels with investment plans in place, what advice would you give?

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11:22 TK: We just had to be very sure about our cashflows. We did get a £2m COVID loan from Barcalys, so that saw us through. But in reality, we wouldn’t have needed it. You can’t really commence these sort of projects, without being certain about your cashflow. There’s still a degree of uncertainty of course though. For us, we’re seasonal. So there’s less risk for us until next summer. If we can get through the next 8-10 weeks, then we’ll be pretty confident about the future, not withstanding what’s going on in the world.

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11:23 SW: Yes, of course. Finally, can you explain the revenue side of the Aspinall short breaks and how it impacts the foundation overall?

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11:23 TK: We’re a charity and our purpose is to breed endangered species and send them back to the wild. One help is that, as a charity, our admission income is VAT free. We’re also able to gift aid a lot of that as well. Because one of the side effects of COVID was people having to book in advance online they don’t untick the gift aid box, which wasn’t the case with day ticket visitors before. So we’re seeing a real boost from that, with about an additional half a million pound in revenue coming in from that. As an organisation, anything we make here in the parks can be gift aided up to the Aspinall Foundation, which they can then spend on the projects we run, in Madagascar, Africa, Indonesia and more.

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11:25 SB: We’ve been rewilding cheetahs, which has seen two cheetah brothers hand reared in Port Lympne and Howletts, who’ve been reintroduced to South Africa and are now hunting for the first time. So it’s a very exciting time at the moment, with a female cheetah recently introduced to them. This embodies what we’re all about - sending animals back to the wild.

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11:26 TK: There’s quite a journey to go here in terms of integrating the messaging of us as a conservation charity into the fabric of what we do as a leisure destination. There’s a lot for us to work on, but this was the first time hand-reared cheetahs have been rewilded anywhere in the world, with lots more projects like this going on in the background.

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11:27 SW: It’s beautiful to hear those stories and to show how guests coming to visit you have contributed to conservation.

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11:27 JP: A question from the audience, are bookings all via the website?

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11:28 SB: It’s mainly online, and we’ve tried to make the website as easy as possible to use but, given the 81 units, we do welcome phone calls to talk people through bookings.

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11:29 JP: Passes on thanks to all.