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Hotelier Indonesia

By: Peter Teska, Global Infection Prevention Application Expert, Diversey

In many countries, restaurants were among the first to feel the impact of the novel coronavirus pandemic. Bookings disappeared almost overnight, followed by long imposed periods of closure and staff inactivity. The onset of coronavirus hasn’t diminished the hard work you have put into your business, but the subsequent rapid change of circumstances and focus mean that you are in effect at ground zero. Putting effective cleaning procedures in place is crucial to reaffirming your reputation when reopening, and for your future success.

New Expectations around Cleanliness

There are few sectors prior to the pandemic in which hygiene has been of such a high priority. Thankfully, the food service industry is well-versed in the necessity for cleanliness in both front-of-house (FOH) and back-of-house (BOH) areas. Yet diners’ sensitivity to hygiene standards was previously based primarily on appearance. The presence of coronavirus requires you to conform to unparalleled and explicit new levels of cleanliness. With this heightened expectation of hygiene, both diners and staff will want to know – and to confirm with their own eyes – what you are doing to ensure health and safety.

Before you focus on enhanced cleaning, create a clear plan based on a feasible reopening date. Having gone through a disruptive period of high uncertainty – and with much uncertainty still to come – this enables you to assess risks and measure daily progress. It also helps to raise team spirit by creating a mutual goal among staff and allows everyone to work backwards from the intended opening date to determine how quickly other tasks need to be completed.

Aim to have everything completed to your satisfaction by this date, but shift it if necessary as you progress. In the new normal of hyper-vigilance, first impressions are critical as you seek to rebuild previous levels of customer confidence. Anything less than best public health practice creates another obstacle to survival when you already face many more.

Best Practices for your Business

Ready your restaurant for reopening by implementing the following strategies:

Implement Social Distancing: Understanding the requirements of social distancing laid down by governments and health authorities is essential. Social distancing defines the constraints for everyone in your restaurant. With strict limits on the number of diners, evaluating the layout of your restaurant and clearly defining entrance and exit routes is essential for safe movement. Instruct staff in procedures. Emphasise that social distancing applies everywhere and will change only with new guidance from applicable authorities.

Require Face Coverings: Because maintaining social distancing from other staff and diners will not be possible continuously, face coverings (i.e. masks) will be required for staff. Instruct staff in how to use masks and when to change masks.

Use Training and Communication to your Advantage: Training on all new public health practices is important, especially for employees whose duties have not involved cleaning before. Develop cleaning kits that combine essential products ensuring ease of use, prevention and best practice. Then, clearly outline to staff and customers the measures you are taking to protect them, and that you are using recommended and safe products. Establish an emergency protocol, as the pervasiveness of coronavirus means that workers may test positive.

Prioritize Hand Hygiene: Hands are the main route for personal infection and the spread of pathogens. Thus, regular hand washing procedures and use of hand sanitizer are central to limiting exposure. Ensure access to wall-mounted dispensers and free-standing hand hygiene stations offering alcohol-based hand sanitizer.

The percentage of alcohol in hand sanitizer is key to its effectiveness. Many products have rushed to market on the back of the pandemic that should be treated with caution. A registered product will provide assurance and its efficacy should be proven according to recognized standards, which could be either from local regulations, the United States EPA or FDA, or per European Norm protocols.1 Hand sanitizer with an alcohol content of 60% is the minimum recommendation of The Centers for Disease Control and Prevention (CDC). 2 Use sanitizers that have more than 70% alcohol content to ensure a faster kill rate.

Select the Right Chemicals for Added Assurance: Preferably use disinfectants that are specifically approved for coronavirus. The shorter the contact time – one minute or less – the better for inactivating the virus. Also ensure you choose hospital grade disinfectants, which are rapidly becoming the new normal in disinfection. They use technologies like Accelerated Hydrogen Peroxide (AHP), which are markedly safer for people and surfaces while still being tough on pathogens. These disinfectants are also more efficient than the existing slower Quats-based (quaternary ammonium compounds) products, or those formulated on Hypochlorite or Peracetic acid.

AHP achieves the balance of maximizing potency while minimizing toxicity, breaking down into water and oxygen just minutes after use.

Conduct Hand Contact Surface Disinfection: Studies show that SARS-CoV-2, the virus that causes COVID-19, can remain on surfaces for up to several days, including 48 hours on stainless steel and 72 hours on plastic.3 Routine disinfection of high hand contact surfaces is an important part of preventing the risk of transmission. Commonly touched surfaces should be put on a cleaning schedule to ensure they are disinfected frequently throughout the day.

Incorporate a disinfectant range that offers numerous applications, including ready-to-use liquids, pre-moistened wipes and concentrates for added convenience and consistency. It may also help if you colour code products, tools and equipment for different cleaning procedures to help prevent cross-contamination and the spread of germs.

Work with a Trusted Provider: With supply chains struggling to achieve pre-pandemic levels, using multiple suppliers for cleaning essentials can complicate your cleaning program. Being able to rely on a single hygiene partner for everything from chemicals to training improves efficiency.

Don’t make the budget supply option your main criteria and avoid buying ineffective, unproven products from an unfamiliar source online or from your general distributor. Instead, identify a trusted hygiene provider that can offer expert advice and the appropriate products during this critical time.

There is nothing certain in the new normal for the food service industry. Nevertheless, by implementing a clear plan and the appropriate cleaning and hygiene measures, you can create the safest restaurant environment possible for your staff and diners, while giving yourself the best chance of success in these very difficult times.

Peter Teska is a Global Infection Prevention Application Expert at Diversey, the leader in smart, sustainable solutions for cleaning and hygiene. He is a member of the Diversey Hygiene Academy and can be reached at [email protected]. For more information, visit www.diversey.com.

1 https://www.who.int/docs/default-source/inaugural-who-partners-forum/who-interim-recommendation-on-obligatory-hand-hygiene-against-transmission-of-covid-19.pdf

2 https://www.cdc.gov/handwashing/show-me-the-science-hand-sanitizer.html

3 https://hub.jhu.edu/2020/03/20/sars-cov-2-survive-on-surfaces/

Hotelier Indonesia

Understand the cost of your booking channels to maximise revenues

Written by: Stephen Hambleton, IDeaS senior product manager

Today, more than ever, Indonesian hoteliers need to understand that often a direct booking is the best kind of booking. However, while encouraging guests to book direct can help hotels bypass third-party commissions and fees, there are still many hotels that rely on the distribution and marketing reach of online travel agencies (OTAs).

Given the rising costs of distribution, it is critical to weigh the value of each booking channel. Hoteliers now need to ask themselves what is the actual cost of acquiring reservations through a booking channel and how much of that demand is needed.

Understand your reservation acquisition costs

To date, hoteliers have generally drawn on the vast amount of data stored in their reservation and distribution systems to optimise revenues. However, this focus is changing as reservation acquisition costs have increased and hotels have seen demand shift to higher cost channels with more pressure on bottom-line performance.

Understanding costs by channel—and evaluating which channels deliver the greatest returns for a hotel—can be a significant challenge, unless a property’s revenue management team has a common definition on the coding structure and a means to calculate cost of acquisition.

Hoteliers are increasingly focused on collecting data to understand the impact of acquisition costs. Identifying the true value of acquisition costs can facilitate short-term booking decisions and longer-term channel-value-centric decisions when contracting with distribution channel partners.

There are a multitude of ways hoteliers can determine the cost structure of a booking channel, including incorporating infrastructure and labour costs, like data servers, salespeople. For revenue management purposes though, it’s more appropriate to keep it simple and consider the cost of acquiring one additional booking through a channel. This will make it easier to compare costs on a channel-by-channel basis and build a foundation for optimisation—i.e., how hoteliers decide if they need one more reservation from that channel, or if they have demand from lower-cost channels.

Knowledge is power in contract negotiations

A hotel that knows the cost of its booking channels has greater power when it comes to contract negotiations with booking partners. This includes deciding how to agree to a fair commission percentage, or which rate and availability parity clauses to agree upon (and how a hotel is penalised for authorised breaking of said clauses within a contract).

The alignment of these clauses across partners are important prerequisites as a hotel puts sophisticated profit optimisation strategies in place (e.g., if a hotel closes or restricts bookings in one channel, must it do the same in all channels?).

The current value of these activities and the partner overall can be hard to evaluate, and the impacts are difficult to predict unless contractually committed. It is especially important as revenue management and marketing are typically a short-term centric discipline, with short-term promotions or pricing practices to drive demand across optimised occupancy dates. Trends or impacts of these distribution practices will play a key role in longer-term performance and should be evaluated as such.

Strategies for reducing acquisition costs

Indonesian Hoteliers looking to reduce their booking acquisitions costs should review their third-party contractual commitments to availability and rate parity and investigate introducing more flexibility into those commitments. These changes typically take time to go into effect and have a significant bearing on how hotels can enact longer term channel optimisation.

Through capturing their channel costs by looking at each booking endpoint in their distribution ecosystem—from direct online bookings through each GDS, OTA and group booking partner, hoteliers can effectively review and analyse their acquisition outlay. As a hotel considers each booking endpoint, it is important to define what the cost of taking each additional booking is.

Once a hotel has a clean data set from which it can isolate its channel costs, revenue managers can make the decision to take more or less of the available demand through various channels on the basis of the cost to take one additional reservation through that channel. That’s how Indonesian hotels will improve profit performance: by controlling costs on a channel-by-channel basis.

The distribution landscape is changing—ensure you get the most out of it

As hoteliers become savvier around the need to measure the costs associated with each channel and booking acquisitions generally, meaningful negotiations will occur between hotel brands and OTAs that help secure guests. It is those hoteliers who understand the cost versus value each booking partner delivers that will be best placed to hold effective negotiations and establish mutually beneficial business relationships.

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How much is your revenue manager costing your business?

Written by – Rachel Grier, Area Vice President, Asia Pacific for IDeaS

Indonesia’s premier hotel and resort market of Bali has suffered from a period of oversupply in recent years. In spite of larger numbers of inbound tourists visiting the island, hotel occupancy numbers have been flat, or even decreasing, leading to the Indonesian Hotel and Restaurant Association (PHRI) to call for a halt in new development construction and limit the impact of oversupply.

“I think we need a moratorium. Several regions like Bali, Yogyakarta and Bandung, already have too many hotels,” said PHRI chairman Hariyadi Sukamdani.*

All Indonesian hoteliers, whether facing issues around oversupply themselves or not, should pay particular attention to the Balinese sector because it gives them an opportunity to watch what happens when supply dampens demand in a market.

In a market facing oversupply issues, it has never been more important for local hoteliers to have the right people and systems in place. However, many hotel owners and their reservation managers in Indonesia are still slow to invest in advanced operational systems like revenue management, viewing these solutions more as a cost than a business driver.

The case against applying ‘more people’ to fix the problem

Indonesian hoteliers should be aware that when operating in a market facing oversupply issues, hiring more people to try to improve a property’s revenue performance will not help. Put simply, one smart revenue manager operating with the assistance of an advanced revenue management system (RMS) can outperform three revenue managers using older, more manual-based approaches. And investment in RMS technology does not have to break the bank either; for the equivalent of 2,000 rupiah per day, local properties can receive significant benefits and drive rate growth.

Revenue managers, even those working in teams of people, operating without automated systems are unable to perform many of the functions needed to drive hotel revenues today. Take the example of a hotel coming into peak season, where there is more demand than capacity at the hotel. In a market with oversupply, peak operating periods are key revenue generating opportunities not to be wasted and present a situation where the revenue manager has to decide which business to take and which not to take.

In a manual environment, the best strategy a hotel revenue manager could apply would be to implement longer lengths of stay. However, using an advanced RMS, the system analytics choose the optimal reservations automatically using a combination of both long, medium and short lengths of stays depending on arrival dates and overall forecasted demand. The differences between manual and analytically-based decision-making in this situation is significant. Given the sheer amount of data needing to processed (reservations for two years into the future across multiple room classes and segments, all with different lengths of stay on different arrival dates), there is no way a revenue manager operating with manual systems can effectively drive revenues in this situation, not even if a hotel considers hiring additional staff to strengthen their revenue team.

Why revenue management is also a cost saver, not a cost centre

In a market facing oversupply conditions, hoteliers should focus on operating as efficiently as possible, reducing any unnecessary expenditure. This is an area an automated RMS can help. Having the ability to account and plan for periods of higher or lower demand, through a detailed forecast generated by an RMS, enables better operational and staffing decisions as well as managing external suppliers to ensure wastage is minimised and profitability can be maximised.

Once forecast data is made available, staffing managers can determine which areas are most affected by guest density and thus optimise their labour management and reduce unnecessary expenditure. For example, hoteliers should review the impact of the number of occupants per room on housekeeping needs, the number of staff needed on the front desk to check guests in and out and the number of servers required in restaurants, the spa and even the transport department.

Services and perishable supply management is another area in which a detailed forecast can be deployed to drive business optimisation and efficiencies. During peak periods, the number of sheets that need washing per day will increase. If the hotel’s own laundry doesn’t have enough capacity for these peak periods, having accurate forecasts in place will mean hoteliers know in advance when they might need to contract out sheet washing externally to manage the overspill.

Food and beverage is also another large source of potential wastage for hotels, especially when it comes to those items that come with an expiration date—from fresh bread to expensive imported produce. Knowing when there will be periods of high and low demand, as well as from which segments will be the key consumers of these perishable items, will help hoteliers ensure they order the right products at the right time and avoid costly spoilage.

Revenue managers working without an RMS could be costing your business

The average hotel revenue manager touches a diverse range of systems within their role, including reputation management, channel management, rate shopping, revenue management, property management and central reservations systems. Advancements in RMS technologies have the ability to free revenue managers from some less meaningful, manual tasks to focus more on meaningful, strategic pricing opportunities. However, it is still surprising today there are some hoteliers, particularly in smaller properties and regional brands, operating without automated revenue software in place.

Revenue managers working without an automated system that unifies key data and delivers meaningful insights and timely pricing changes and inventory control are operating at a significant disadvantage today. They are having to take on substantial amounts of manual data entry, sit in on meetings focused more on basic logistics and less on strategy, and also have a heavy reliance on limited data sets from which to make reactive pricing and strategy decisions. To get the most out of their revenue managers’ skills and to maximise all revenue opportunities for their property, hoteliers needs to invest in technology and automation to enable proactive strategic decisions that drive business optimisation, efficiency and profitability.

References:

*https://www.thejakartapost.com/news/2017/11/14/government-asked-to-stop-issuing-licenses-for-hotel-construction.html

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Hotelier Indonesia




How Personalisation Can Drive Bali Resort Revenues Today

Written by: Tracy Dong, Lead Advisor, APAC, IDeaS Revenue Solutions

Resort owners in Bali operate complex businesses. They face challenges related to volatility in demand, having overwhelming amounts of data and complicated revenue streams. As a result, traditional dynamic pricing approaches simply aren’t ideal options for many resorts, which means there is greater risk of missing out on potential revenue gains.
While automated-pricing technology has enhanced how hotels practice revenue management today, not all systems are a good fit for the resort market. For instance, all-inclusive resort revenue managers must weigh the outcomes of per-person pricing versus unit-based pricing and deploy that pricing strategy across all products and channels.

A large opportunity for resort owners to improve their profit performance today centres on guest personalisation. Offers like a spa package, rose petals and champagne, or room-location choices like balcony, poolside, ocean-view or beachfront create opportunities for more tailored and unique guest options.

Resorts often have many room types and drive a longer length of stay compared with traditional hotels. They also tend to have very well-defined patterns by day of week and season. As a result, many resorts rely on occupancy-based pricing to drive revenues, and packages or amenity add-ons to enhance overall property profit performance. Given the multitude of potential revenue streams within a resort, there are a wide range of revenue maximisation opportunities to be captured through personalisation.



Let’s take for example a resort in Bali that consists of beachfront villas, traditional hotel rooms with meetings and events spaces, and is located 30 minutes from Denpasar Airport. In this case we have a resort that drives both strong leisure weekend business and strong mid-week group business. This resort has 15 room types, charges an additional rate for third- and fourth-person occupancy and historically captures a three-plus night length of stay from their guests. In terms of number of pricing decisions, the resort has to make over a typical year, this could result in 15 room types multiplied by 365 days in the year times three occupancy price points times seven length-of-stay price points, which works out to 114,975 pricing decisions in the year—and that’s just for calculating the Best Available Rate (BAR) alone. This is not even considering fluctuations in pricing as demand shifts or additional rate plans.



Given the multitude of pricing decisions needed, optimised pricing at the room-type level by length of stay results in very personalised price points. Think about the difference in price points if you had a family of four looking for a junior suite for a Thursday to Sunday stay pattern versus a single business traveller looking for an executive king for a Tuesday to Wednesday stay pattern. Even if these two guests were looking for the same room type, we’d see very personalised price points for each of them. Layer this level of pricing optimisation on top of the diverse set of products, rate plans and chargeable amenities a resort offers, and already you are offering accommodation packages and price points personalised to a guest’s needs, without ever having to ask for personally identifiable information.

Resorts also take a significant portion of business—sometimes upwards of 70 percent—from wholesale tour-and-travel contracts. This may lead some resort owners to view personalised approaches to pricing as a lesser priority compared to traditional hotels due to having rates set far in advance, rooms occupied and even total guest spend preconfigured, but this should not be the case. Yes, the agreed contracts help ensure the resort stays busy, but with less control over pricing and availability, how does a resort know if these arrangements truly create the best outcome for their bottom line? A savvy revenue manager will conduct a thorough analysis of their wholesale contracts, outlining areas where rate negotiation or availability can be optimised.

Cultivating asset value for resorts is all about capitalising on the unique revenue opportunities these businesses create. Compared with urban-based hotels, resorts are challenged by much more complicated business models and a diverse range of revenue streams. Resorts require a more tailored approach than the typical hotel. This approach should account for flexible guest rooms to accommodate families of all sizes, while pricing per person or by room, as well as managing an abundance of package offers and contracted wholesale rates.

Pricing will continue to evolve. Buyer expectations are on the rise because technology provides more transparency and immediacy to our consumers. The guest’s ability to tailor their experience will only continue to grow, and customer choice will be the next pricing opportunity. In today’s environment, hotels, especially resorts, are discovering ways to leverage the data they have now and cutting-edge technology to optimise and deploy those hundreds of thousands of pricing decisions every day. Each of those is becoming more hyper-personalised and delivering results that lead to greater revenue opportunity and profit potential.


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Hotelier Indonesia

Impact of Major Sporting Events on Hotel Performance

Hosting major sporting events has long been considered a way to enhance the brand awareness, tourism appeal and profitability of a destination. For the hotel industry specifically, such events can help boost demand and other key performance indicators (KPIs).

This year, many major sporting events did just that, including the FIFA World Cup, Gold Coast Commonwealth Games and Asian Games. During the World Cup, for example, hotels in Moscow saw a 338.1% increase in revenue per available room (RevPAR).

To provide a further look at the hotel impact of these events, we are pleased to present the infographic below.

Click here to Download Infographic

Please contact [email protected] or +62 (21) 2975 8957 if you have any questions.

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