Managing an independent hotel is one of the most challenging endeavors in the hospitality industry. For as much time that hoteliers spend leading team members, they must devote more to their guests or else risk the long-term health of their business. Layered within these responsibilities are the numerous processes, policies and systems that operators utilize to ensure their properties perform at the highest level, produce strong revenues and, ultimately, generate sustainable profits.
The summary above provides just a snapshot of the “weight” that rests on the shoulders of independent hotel operators. Hoteliers who are in-tune with their business know that trying to directly manage every responsibility is a recipe for disaster, so they surround themselves with solid management teams and provide them with the proper tools to take ownership of and excel in their roles.
The majority of 2014 has come and gone, so many hoteliers are now focusing their attention and efforts on preparing for the opportunities the new year will bring. However, before getting too far ahead in planning for 2015, it’s important for operators to remain on-course, review their year-to-date progress and establish goals to ensure their hotel’s annual performance finishes strongly.
In the most recent forecast released by STR and Tourism Economics, the U.S. hotel industry as a whole is predicted to finish 2014 on a very high note:
• A 3.7% rise will place occupancy at 64.4% for 2014, a level not seen since 1996.
• Average daily rate (ADR) is predicted to grow 4.6% to $115.53, an all-time record.
• Revenue Per Available Room (RevPAR) is forecasted to rise 8.5% and finish at $74.42, the highest rate since STR began tracking data in 1987.
• Demand is expected to achieve a 4.5% increase, the largest increase since 2011.
• Supply is expected to grow by 0.8% for the year.
Delivering guest value is a priority for independent hoteliers across all segments and rate categories. No matter how much (or little) is spent on a guestroom, every guest expects to receive, at minimum, a reciprocal amount of value from the property. And, of course, any value received above this amount is generally very well received and appreciated by travelers.
Within the hospitality industry, this value-based relationship puts a lot of power into the hands of consumers and some fear this will result in hefty, long-term costs and will hinder future growth opportunities for owners and operators. While disruption in consumer behavior undoubtedly affects businesses, we believe hoteliers can mitigate any large-scale negative impact by proactively managing their operations and instituting budget-friendly enhancements to the full-cycle guest experience, from booking through billing.
In continuing our dialogue about preparing for 2015, we are providing our hotel partners with additional best practices for leveraging innRoad’s hospitality management software to its full potential. By maximizing its capabilities, operators can plan for achieving year-over-year growth and positioning their property for long-term success.
As our partners know well, innRoad’s cloud-based hotel property management system is designed with the tools hoteliers need to enhance day-to-day operations, increase reservations and revenue and drive efficiencies that result in greater profitability. We value our role as a partner to hotel operators across North America, so we will continue to enhance our industry-leading hospitality management software by providing advice and information to help you achieve your business goals in 2015 and beyond.
As 2014 winds down, hoteliers are preparing to take advantage of the opportunities that are expected to present themselves in the new year. In the latest 2015 forecast from STR and Tourism Economics, occupancy is predicted to rise 0.7% to 64.2%, ADR to increase 4.4% to US$120.13, RevPAR to grow 5.2% to US$77.17, demand to increase 2.1% and supply to rise 1.3%. With these figures pointing to a prosperous 2015, operators should be strategizing how to capitalize on the industry’s strong momentum, ramp up their businesses and separate their hotels from the competition.
As added-value for our independent hotel partners who trust innRoad’s cloud-based software to power their properties and manage over 15,000 guestrooms, we are providing a hospitality management systems checklist to ensure your hotel is fully prepared for a successful 2015. And for those who are curious about innRoad’s functions and capabilities, this checklist will provide great insight on how operators are currently utilizing our hospitality management systems to streamline their operations, increase reservations and revenue and drive more profits to their bottom lines.
Tech-savvy hotel operators have more digital tools available to help propel their business forward than ever before. Social media, online travel agents, website and mobile booking engines, mobile/tablet apps and other 3rd party technologies make it easier for hotels to connect with travelers across the globe. However, with enhanced access to potential guests providing greater opportunities to increase reservations, hotels must have a system in place to efficiently manage the flow of business from all of their sales channels.
A hotel central reservation system (CRS) is the optimal technology solution for properties looking to effectively manage their growing business. As its name suggests, the primary function of a hotel central reservation system is to centralize and organize reservations, guest information and hotel data in one place for fast access and easy management. However, even if you are an operator who does not rely on the most cutting edge technologies, you can still benefit from using a hotel CRS. Here are examples of operators with different goals and objectives who can all improve their operations with a hotel central reservation system.
To thrive in today’s hospitality industry, independent hotel owners and operators must have a well-designed digital marketing strategy. Developing an online marketing plan can be daunting for those who prefer analyzing financials over reviewing advertising content, but if managers want to remain competitive, attract new guests, increase revenue and solidify long-term profitability, it is an essential requirement. And as a key component of their digital marketing strategy, acquiring access to a global distribution system (GDS) should be a top priority for all hoteliers.
Hotel performances are expected to improve strongly over the coming years, so positioning has never been more important for independent properties. Property class, segment and room rates are core pieces of the positioning puzzle, but foremost, travelers must be able to find a hotel online or else those supporting factors have little to zero impact on their lodging decision. With access to a global distribution system, hotels have the ability to connect to popular online travel agents (OTAs), including Expedia, Travelocity, Booking.com and Hotels.com, and greatly expand their digital footprint. Travelers rely on the internet to compare properties, rates, amenities, etc., so with OTAs increasing their visibility, hotels enhance their opportunities to book new guests, differentiate from other hotels in the market and position themselves to capture greater revenue.
STR, the leading global provider of research to the hotel industry, recently released its U.S. Q3 2014 results and hoteliers nationwide should be extremely pleased with the results. The industry’s three key performance metrics all reported year-over-year increases. Occupancy rose 3.8% to 70.3%; average daily rate (ADR) increased 5.2% to $117.91; and revenue per available room (RevPAR) jumped 9.2% to $82.93. While all of the reported figures are impressive, the RevPAR results definitely stand out from the crowd.
To provide additional context for these historic results, Bobby Bowers, senior VP of operations at STR, noted, “Third-quarter RevPAR growth of 9.2 percent was the highest quarterly growth rate since the first quarter of 2006 and the highest third-quarter growth STR has ever recorded. The strong RevPAR increase was driven primarily by ADR… STR anticipates full-year 2014 U.S. industry RevPAR growth of around 7 percent.”
The United States hotel industry is enjoying well-deserved success after climbing out of an economic sinkhole that placed enormous strain on the business community, both domestically and internationally, over 6 years ago. Consumers worldwide have regained confidence and are now spending more on travel. As a result, the U.S. Department of Commerce expects 73.9 million international visitors to stay one or more nights in the U.S. by the end of 2014 – a new record. The momentum from international tourism is expected to continue over the coming years and ultimately deliver 88.3 million international travelers to the U.S. in 2019. With this strong travel outlook, U.S. hoteliers stand to benefit greatly from the heightened interest of the international tourist community.
In August, the White Hart Inn, situated in picturesque Salisbury, Connecticut, reopened to great fanfare from the local community after shuttering years prior in 2010. Under new ownership and management, the stately 19th century New England inn, outfitted with elegant rooms, handsome suites and a chef-driven restaurant, aims to reclaim its historic charm as a warm and welcoming retreat where visitors and neighbors can socialize, unwind and rest. To achieve this goal, the White Hart Inn partnered with innRoad to utilize our cloud-based hospitality management software and share in our team’s wealth of hotel industry knowledge and expertise.
“We are a brand new client and we love it! The innRoad team is wonderful! They have been so helpful throughout this whole process.”
Daniel Winkley, White Hart Inn, Salisbury, CT