The Boost Hospitality Podcast is back for another season! We are now in Season 7, and we are currently on the eleventh episode! In this episode, I've invited Mirelle Brown of Optimize Revenue to talk about how to get bookings in the shoulder season.
You are going to find out about the apps that she uses for pricing you're going to find out some of the most common mistakes that other hospitality owners are making when it comes to price. She's going to change your mindset in how you look at pricing your property specifically in the shoulder season.
What would you say is your or your company's superpower?
My superpower I would say is the ability to help people make decisions and take the uncertainty out of their pricing questions and queries inevitably with 25 years experience that probably is where my biggest superpower lies because I've experienced have lots of apartments individual apartments but First the hospitality community and obviously independent hotels and so on.
So that's probably where the wealth of my experience lies over that length of time. But yes, ultimately, it's really about taking the uncertainty out of the pricing question for people.
What's your favourite business book?
This is one that I can't get not to get rid of that the wrong thing today it's a Bible, and I started with a long time ago, and I keep looking for something to replace it, and nothing has quite managed to do it for me up to this point.
So it's something by two guys called Johnson and shows, and it's about competitive advantage. And it gives you a load of models in there of some of them are a little bit traditional these days, but they still work well in terms of looking at your environment, looking at your marketplace looking at demand and supply. And these are all fundamentals for revenue management and pricing and if you own or you're managing a property then you know knowing how to see and view your marketplace and adopting some of those models is really quite positive and suggest so anyone that hasn't seen it, it's a very big volume though don't get me wrong, it's not a quick read.
So you need to prepare yourself to go through it, but it's a worthwhile one.
What is your favourite purchase? Or under 100 pounds been in the past year?
I could say shoes, but I won't. I purchased an app. It's a business card reader having been at lots of different events in pin meetings, networking events, and the likes of I was struggling with all of the cards that I was collecting.
And actually, I hadn't realized I'm sure lots of people out there have already done this and got that, but actually to just line up that business card on that app and put it straight into a database, obviously, in line with GDPR regulations to be able to have that database of contact, which would be brilliant. I can't remember the name but apologies.
What is one of the most common mistakes you see hospitality owners make when it comes to pricing?
One thing it's not necessarily priced, specifically pricing-led, but it does have an impact, and that is the property management system without the right property management system. You aren't in a position to monitor your performance, to see where your key performance indicators are. And you don't get the reporting functionality out of some of the PMS is that's important to do analysis.
And I know that sounds a little bit boring and very long-winded. But you know, if you don't know where you've been, it's very difficult to know where you're going and to be able to analyse the trends, and the patterns in your business is imperative to the pricing piece.
So by that, I'm talking about things like your occupancy by day of week midweek versus weekend, your revenue per available unit or room, your lead time, your cancellation piece and the pace of your business.
Those types of KPIs are important when building up your knowledge of your own business and what pricing strategy you need to put in. And if you've got a property management system that isn't giving you that, then it makes it difficult for you to even get a foothold on getting the right rate for your customers and Your guests.
So that's the first thing or bit, you know, as I say it's more of an underlying issue or challenge, whereas specifically pricing wise, it's a very common challenge, as you rightly point out whether it's small or large or medium businesses that there is a fallacy that a rate is a rate.
And when you talk to people, they always reference the rate. And it's essential to distinguish the difference between the rate and an average rate it lends itself to conversations like I need my rate to be hundred and 70 euro pound dollars, whatever it may be each night, that's what I have to command to get a breakeven point.
But, if you start to look at your business more holistically, you know, from a helicopter view, then you start looking at your business from more of a weekly, monthly, quarterly kind of basis. And it's imperative that you can see that on some days of the week cause demand changes by day of the week whether we like it or not, and you know, a Sunday night vs a Wednesday night can be significantly different depending on the marketplace that you're in.
And based on the day of pricing is important to understand that it's about an average over a period that you need to achieve, and not the rate that you're talking about. That's common in a really common challenge and the mindset to try and have to change for people as well.
Do you have personal preferences of PMS doing better than the others?
Yes, there is purely based on the information that comes out of it. And if it were a large, independent hotel property, I would be recommending the use of something like a guest line
If it's an apartment or a block of flats, individual units or multi-units, then I'm using more often rez harmonics, which is purpose-built for, for the apartment in shorts short and the long-stay Community.
What advice would you give to somebody specifically around pricing in shoulder season? How would I go about getting those midweek books and what's the best tactics and tips that you would advise?
It's quite a full answer. There are quite several facets to answering that kind of question. And I think, you know, the, in the first instance, there's got to be a realisation that you know, having your property or asset, whatever that looks like, whether it be the apartment, bed and breakfast, so on and so on various times.
It isn't a plug and plays. And I think there's a fallacy that you plug into what's classified as distribution channels. And in the main, they tend to be two main ones being Airbnb and booking.com. There are many others out there just it doesn't look necessarily that an awful lot of people are either aware of it, or they don't have a property management system that can support more channels.
So you need to be familiar with there is, you know, more opportunities there on distribution sites, such as expedia.com hotels.com lastminute.com, late rooms.com. I mean, the list goes on and on.
And a tip to find out what dot coms are being used in your location is to go on google and type in accommodation in whatever location you're at. And when you go through the page searches, you'll start to see something. Some of them are paid ads, as you'll be aware of, but some of them are organic searches.
And you'll see what your competitors are coming up with and what they are listed on. And it's an excellent exercise to do to see what that distribution looks like distribution ultimately is your shop window. It's, it's where you're going to put your accommodation in front of a guest. And the more opportunities that you've got putting that in front of the guests, the better. There's your brand website, not forget that. Importantly, that's your best and cheapest cost-effective means to getting your guests, of course, so you need to make sure you've got all of that optimise.
So you know that that's the starting point in terms of where that shot window looks like. And that once you've plugged into those different distribution channels, you can't sit back it's not a hands-free moment.
I get a lot of conversation about you know, the systems that haven't provided this, these bookings for me. And when I say to them to people, what have you done yourself? What proactively have you done? You tend to get a lot of sort of mumbles and, and quiet time at that point because there is this fallacy that it just comes in. If I explained to you that the rates that are put on the distribution channels like booking.com, labour and website, any of those types of things, those rates are public, yeah. And ultimately those rates are there. And they compensate for any lack of contracted rate.
Ideally, in your shoulder periods whenever that is because various parts of the world will have different months of the year that are shoulder periods. And based on that, it's going to be important that you have an understanding as far out in advance as to when those time frames are, again, from a proactivity perspective.
People tend to say I'm in my shoulder season; what can I do? It's too late. You will grasp so, and the term that is used as you have picked up in the month for the month. Yeah. And what you ideally need to be looking at is putting as much, and this is another jargon term of Bob, business on the books. You need as much Bob based business on the books before arriving into your shoulder season.
So if you're only considering that the challenge of no bookings once you're in that season, then you need to some degree, focus your attention on your next show the season and start proactively working toward that. And when you start looking at rates in relation to that show the season, you want to begin incentivizing The those bookings, because, by all accounts, the pot of demand will have shrunk, the number of people that are looking to make a purchase of accommodation and your service is going to be much smaller.
So you need to be looking at ways to which you can incentivise that now, whether that is with lower rates further out, and they may be advanced purchase or non-transferable rates that you decide to do so that you get the cash upfront. But the discount is deep enough to incentivise someone to say; you know what, I don't mind to make my booking today for three months because that is a considerable deal discount, and it's money in my pocket. From your perspective, as an operator, you get the cash upfront, so you've got that security in there. And subsequently, if they do cancel, then you're just going to resell that so it'll be a double-dip, as they would call it in terms of revoking that, that space.
So it's really Really about preparing as far in advance how much business on the books you need before you enter into your soft or shoulder period. And by which point you should be aiming for anything around about 40 45% that type of a number of occupancy on the books before you enter into that period itself. Then because it will be much slower to pick up in the month or in that period for that period, you're only going to top up the bookings that you've already secured.
So as I say that it's about proactivity. It's about business on the books; it's about having a plan in place way before you get to your shoulder season. It's about putting some incentives pricing wise in there in terms of things like advanced purchase on transferable; you might want to put packages in. Don't forget the other aspect of life is about marketing. And again, Lot of property management systems don't enable you to have a CRM functionality or a database that can feed in or integrate with things like MailChimp.
And that's really what ideally you would be looking for to build up that kind of data so that you can way before you arrive in your shoulder season, that you're communicating with guests that have been and stayed with you.
Whether it be in the high season or previous shoulder season and start to really communicate with them and offer them a loyalty, what they call it in marketing terms of bounce back, kind of offer to say you stayed with us once, can you bounce back and come and stay with us again, those types of offers need to go back through.
So you know, it's the marketing piece, the proactivity, as I say, and then you've also got things like when you're talking about midweek. It's primarily corporates. And if you not familiar with your corporate business, or how corporates function, and I don't blame you if you don't, because court the whole pricing, surrounding ledger business versus corporate business comes with an entirely different profile of the customer. Their behaviour of buying is very, very different.
So, you know, when you come to the corporate piece, you've got big organisations, I'm sure you're sad, looking down your you know, your neighbourhood or your town centre, and there are some big blue-chip companies then you say, Why are they not using? Well, they, they're very, very astute.
They've got lots of experienced individuals that are either called procurement managers or travel managers and they put mandated policies together that you know; they're all jargon things. They're all things to put a barrier in front of you going and knocking on their door a little bit, and you can knock on their door.
You can say to them, you know that you're in the vicinity, you must have people that are relocating to this area to live, it's an international company. They'll have an agency that they will use that may not be an apartment or short or long-stay specific. So you need to know there are two and a half thousand agencies plus plus plus, in the UK, not just Salvador and so forth.
There are so many more that are corporate related, and you need to understand which corporates operate with which agencies, but before you do, you need to set your corporate rates. You can't just go along and say my rates 75 pounds a night, you the way that they operate.
There are two methods of pricing. For corporates in that fashion foot, I'm talking about blue-chip companies that have Polish Season the likes of. And in that respect, they all want to know if they get a discount for the length of consecutive stay length of stay. So if you've got someone that's doing relocation, and that relocation is going to be for one month, Happy Days, then they'll want to know that you've got a sliding scale of pricing that's from one week to three weeks, to four weeks to six weeks to two months, and so on.
So you need to construct a pricing schedule, to be able to go to that respective person say, this is what my consecutive rates look like. If it's not about a long, stay corporate, and it's about you know, Mr Jones comes from London to visit the offices in Edinburgh or any other destination of the world. Then, you know, Mr Jones, maybe visiting about 150 times a year, it's not the various timeframes, it might be two nights one week, three nights, another week, one night and a different time frame.
And they've classified as volume-related rates. So again, you have to put a sliding scale of if you've got anyone that is staying from zero to seven nights, the price is this. If it's eight through to 14 nights, and I'm talking about volume not consecutive, then you've got a price for that.
So you've got two pricing schedules that you have to have under your belt in your tool kit before you knock on the door of your corporate agency. And before you knock on the door of the corporate office themselves, because that's what they will want to know as to what your pricing mechanism mechanisms are.
What happens if we are now in the shoulder season? And we haven't done the prep? Are there any real short little bits of advice on what we could do to get a quick win maybe here?
There are always things that you can do in it. And of course, it depends on how you set yourself up. There are two things in life when it comes to pricing, and you can either constrain your demand, or you can unconstrain your demand. And when you're getting into high season, you want to put factors in that might constrain that demand slows down the pickup so that you can capitalise on it when you arrive in that time frame.
Conversely, when you're in a soft shoulder period, you need to unconstrain your demand. And by that, we're talking about really making it as simple and as easy for your guests or prospective guests to purchase from you.
And you need to go back and have a look at some of the policies that you've got surrounding your accommodation. And by that, I'm referring to things like deposits, cancellation charges, timeframes relating to cancellation charges. Whether or not you've got any policies in relating to being family-friendly or not. Sometimes people are charging supplements for children, and the use of cops and the likes of all of these things start to constrain demand.
So wherever you can, unconstrained that demand and attached a sellable rate. The critical factor is that you know what's going on in your competitors. You don't go onto a search and look at 35 or 355 establishments in your area, it becomes analysis paralysis, you won't see the wood for the trees, but select for yourself, five competitors plus yourself as being a group that is the most like for like competitors.
And the reason I say like for like, because if you've got a block of 17, hypothetically speaking, multi-units in a neighbourhood, and you select five other competitors that have all got one group, each, the pricing strategies will ensure to be very different.
So I would very much advise that Pick yourself. Five competitors. Write down for yourself what you believe to be the critical constraining factors for your guests. And those, as I said, can be things like your cancellation charge the cancellation period, the level of deposit that you're taking the additional supplementary pricing, you may have pricing but per person.
And when it comes to shoulder season, you may find it better to put flat pricing in lower flat pricing, rather than stepping up on a per person type situation. So there are lots of things like that but document them into a sort of criteria, and then spend the time, and I know you don't have much of it. Still, it is worthwhile to do is to go online and benchmark your competitors against that criteria in order that you can see what they are doing or not doing and subsequently make your decision based on what you're seeing. If you find that everybody has dropped putting a deposit in no nobody's got a cancellation or the cancellation period isn't two months anymore, it's now seven days or three days.
Bear in mind, please, corporates will baulk. Generally zero, that's on the day is three days out. That's their usual booking time it might extend to seven day period. But as in when they are physically going to make the booking for whatever time frame, they're going to stay, but they're going to make the booking their lead time is usually about zero to three days or at the most seven. When you're looking at leisure, it goes much further out than that. So it depends what your mix of business is in your property and your area that you're located in.
But knowing that and if you've got cancellation charges that are applying to 30 days out, but the majority of your businesses is corporate, and it's a shoulder season for corporate. You are likely to be putting those quite significantly.
Do you have a favourite pricing tool and if so, what are they that you use in your day to day?
Before I answer that, I just put a word of warning out there for automated revenue management tools, they are great, don't get me wrong, that you can get some, some traction with using them.
But a large number of clients that I've been working with, that are using things like price labs, you know, also tend to think that it's automated to the point whereby you don't need to do anything, you know, you plug it in, and you just let it go, that is a really dangerous thing to do.
So you need to get some advice in terms of how to set up your parameters in those types of tools. And if the parameters are wrong, then your pricing will be wrong, so I can't stress it enough. I'm happy and have done quite entirely a lot over the last few months, had conversations with people and to give them some hints and tips and advice on how to set up those parameters.
Once the parameters are set up, you still need to be in a position to tell temperature gauge whether those are the right pricing decisions for you, and you still need to look at your key performance indicators to benchmark against that automated tool. So, yeah, don't fall into the trap of it's another hands-free plug and play automated PC, you don't have to do anything to save you time does save you time, but you've got to set them up properly, and you got to keep checking them.
In terms of answering your question about what tools I use. You see, there are two types of pricing, there is occupancy-based pricing, and there is demand-based pricing. That on the whole, the majority of people out there won't have tools that will tell them the demand in their location. And based on that, the majority of people will be using occupancy-based pricing techniques. The tool I use on a day to day basis is something called HQ plus, and this is a tool that will give you I mean, it's a gift really, I mean, yes, it's a chargeable thing that they obviously invoice for on a monthly basis but it is again, gives you the prices right? It gives you the demand per day in your marketplace.
And you set up your competitors, your chosen competitors into that tool, and it will give you the competitors pricing daily. So you can map quite quickly and see quite easily where you fit against that competitive pricing. It will also give you the events in your location that will impact the demand. So if you're in a major town or city centre that has got large events, you know that marathons and running events or sporting events, entertainment events, things like That cut that can impact the demand for your property.
Those are already listed, and they get updated regularly into this HQ plus tool. So that's my, that's my lifesaver, really, that's my day to day go-to place to double-check where things are. And on top of that, of course, it's I use for, for some of the more established multi-unit blocks. And independent hotels use something called ideas, which is a revenue management solutions.
It's quite sophisticated. It's not something I would recommend if you have, you know, less than 20 units. But if you do have less than 20 units, including sort of 1 individual property or unit, then you know that as I said before, there's nothing to stop you're using something like price labs or a significant portion of my customers do that. We can work with it quite well. If we've set it up one monitor trainers closely.
So, outside of that, I use something else called STR global. If you submit your occupancy and revenue and average rate information to STR global, they will give you free reports relating to demand and supply in your marketplace.
And by that, they will be telling you what your market share is. So you can say, Well, actually, you know, looking at my occupancy, I think I've done well. You see, I've got hypothetically I've got 75% occupancy this month, that's brilliant, but what they will give you is an indication of what the market has achieved in occupancy and rate terms. So you might find out that there that the marketplace achieved 85% occupancy.
So something else should have been done. For you to be able to command more occupancy rates important the occupancy rates relationship and then the revenue, of course, and it will give you that information.
STR also have location information. So, if you are looking for a prospective investment, they can give you the level of supply and the inventory. They can also tell you what the trend for business or trend for occupancy and demand and revenue has been in that location over a period of time.
I appreciate air DNA can do the same mark to a point, but obviously, the source of that information is purely from property that is registered with Airbnb. So, again, which is nothing wrong with that, but it you need to bear that in mind.
And then I think, finally, there's a real estate agency called Kalia. They are global. And they provide an index of property and asset index, which is fantastic. It's got weightings based on land price versus demand versus pipeline versus occupancy, etc.
And it's all crunched into an index, and it gets they'll give you the the the best locations in the UK for investing. So that's another place that I tend to turn to as well.
Know more about Mirelle Brown
Facebook: https://www.facebook.com/people/Mirelle-Maunder-Brown/100012572107960
Linkedin: https://www.linkedin.com/in/optimizerevenue
Listen to the full podcast on iTunes or Anchor or visit Boostly Hospitality Podcast for the full list of episodes!
