The hotel and broader hospitality industry rely on consistent business to survive, let alone thrive. For many, the lulls that accompany various times of the year can be a real challenge, hurting the bottom line and undoing all the good work done in previous periods.
But how do seasonal trends impact operations and what can we do to combat these challenging periods? Let’s dive in.
Breaking Down Seasonality and How It Affects the Industry
Seasonality at its core refers not so much to the changes of seasons themselves as it does to the weather, local events, and behavioral changes that occur as a result of the seasonal shifts. Winter doesn’t arrive and instantly drop footfall for every hotel – after all, for a ski resort, winter might be the peak season!
Understanding your target market, your location, and the impact seasonal changes have on you is key to mitigating the impact. This is particularly important if you have different types of hotel in different areas – a boutique city-central hotel will face different challenges to a family friendly apartment next a beach, and you need to pick the right tactics for both.
How Seasonality Trends Present Themselves
Seasonality can impact the hotel industry in a variety of ways, though the fundamental and most crucial is the impact on financial performance and the bottom line. Some of the key dangers to consider include:
- Changes to footfall. The volume of incoming business will fluctuate alongside the seasonal changes. This can occur both in a reduction of footfall during poor weather as well as an oversaturation of guests, potentially leading to insufficient resources.
- Changes to booking habits. Holiday goers may opt for shorter weekend stays, getaways during off-peak times, or book with fewer individuals in their party.
- Incoming revenue. The biggest and most damaging outcome of seasonal changes is the incoming revenue itself. Without reliable income, a business simply cannot operate.
Most Impacted Destination Types
While seasonality will affect all hoteliers throughout an operations year, some will be hit incredibly hard. Businesses that are designed around specific trade will need to consider this trend acutely and make the necessary adjustments to protect their income and boost hotel occupancy rates when required.
The most impacted are typically businesses such as ski resorts, beach resorts, and cities with special events – for instance, Christmas markets, music and cultural festivals, and sports events. Each of these can drive huge volumes of business to nearby locales, but also leave you with a lot of empty rooms in the off season.
High and Low Seasonality Explained
Seasonal fluctuations don’t just refer to the loss of traffic during quiet periods, they can just as easily mean oversaturation during busy periods. It’s important to consider and accommodate both possibilities when planning operations – losing business due to being overwhelmed and providing poor service is just as damaging as having less than anticipated footfall.
How To Effectively Manage Seasonal Fluctuations in Hotel Occupancy
With the challenges defined, it’s time to start putting plans into action. Let’s take a look at some key methods you can use to manage seasonal fluctuations.
Forecast Seasonal Trends Using Historical Data and Modeling
Data is the most powerful tool we have at our fingertips when understanding the trends of seasonality. The volume of information available to us – via historical performance trends, machine learning functionality, and competitor data – should be leveraged to better understand our situation.
Use historical data about average occupancy rates and predictive modeling to understand the trends in your hotel attendance. You’ll likely already have some intuition about when the low season is, but the hard data will solidify those thoughts and ensure you can make confident decisions from it.
While we advise having the capability to collect and manage data internally, it is a strikingly complex aspect of business operation. Fortunately, there are a range of third-party data enrichment companies that can provide the infrastructure and expertise to get you working with advanced analytics.
Leverage Promotions, Dynamic Pricing, and Incentives for Seasonal Periods
Promotions are a tried and proven method of generating more business when it is hard to come by, and it’s better to provide additional value to the customer if it means you can secure the booking. You don’t just have to discount your daily rate, either. Consider adding free use of additional facilities, room upgrades, or a loyalty program.
Depending on your location, you could also work on deals with other local businesses – for instance, maybe guests at your hotel get 10% off their meals at a nearby restaurant. Arrangements like this are mutually beneficial, as it’s likely those businesses will be hit with some of the same seasonal challenges as you.
Staff According to the Demands of the Season
This is perhaps the most directly impactful change you can make, even if it is the most potentially risky. Every member of staff you have on-site is additional overhead that you need to cover with more bookings, and too many staff can be one of the most damaging factors.
Conversely, having too thin a workforce will bury a busy hotel and cause no end of problems for everyone. Use the data you’ve collected insofar and combine that with the future bookings you have secured to forecast expected footfall. Use that modeling to allocate shifts and ensure you have the right team available without underprovisioning or overstretching your capacity.
It isn’t simply the staff levels that need to be considered, however, but the type of staff you need to have on hand at different points. Seasonality affects the broader operation of hotels, of course, but it can have acute impacts on specific parts of the business. Restaurants, gyms, and swimming facilities can all have vastly different customer demands as the seasons change and you need staff to meet those demands.
Manage Stock Levels and Adjust Supplier Relations Accordingly
The final piece of the puzzle is to consider your third-party relations as seasons change. You should be actively reviewing and adjusting your needs – alcohol, food, cleaning products, and more – to ensure that wastage is reduced and money isn’t being spent unnecessarily. You also need to have the stock required for periods of high traffic.
Supplier relations may be tricky to manage, particularly as contracts can stretch out for months or years of provisioning. Having frank and honest conversations about your seasonal needs can help find a middle ground that works for both businesses.
Use Digital and Social Marketing to Boost Occupancy
It’s important to keep in mind that the seasonal fluctuations facing your business are impacting your competitors too. You have to find ways to entice potential guests to come to your establishment over your competitors if you are to handle the fluctuations effectively. Digital marketing and social media management are just some of the marketing strategies you can employ to drum up additional business.
Digital marketing helps bring you to the forefront of an unaware audience, making them an important part of your wider marketing approach. Creating content that catches their attention and encourages engagement is a great way to get eyes on your website – and website analytics tools can make sure you know what works and what doesn’t. Organic search still drives huge volumes of traffic for the hotel industry, drawing in potential customers from national and international sources.
Social media marketing supports the same overall goal but through different channels, instead tapping into the burgeoning lifestyle and recreation community to generate additional business through visual storytelling.
Both should be active parts of your operations and can be a robust source of reliable incoming bookings for both peak and off-peak seasons.
The Next Steps
Seasonality is a challenge all hotel brands have to face. Despite this, a savvy and agile approach to your operations will ensure you can make the most of the opportunities and continue to thrive during the tougher periods. Having an effective pricing strategy, accurate forecasts, and strategies planned in advance will serve you well.
Review your position at present and use the advice provided to see what changes need to be implemented. Seasonal preparedness is a critical aspect of longevity for any hotelier – now is the time to start acting.
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