Hello everyone and welcome to Hospitality Marketing the podcast, I am your host Loren Gray and this is episode #239 where each week we spend around 20 to 30 minutes sharing the most interesting tools, news, and techniques being used in marketing for the hospitality industry. We also do a quick recap of our weekly Live Video show “This Week in Hospitality Marketing” which also airs every Friday at 11:30 am Eastern US Time.. SO let’s get started;
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Hospitality Marketing Podcast Show 239 Transcripts (English US)
(Announcer) Welcome to this week in Hospitality Marketing. The podcast show number 239 with your host, Loren Gray. Hello, everyone, and welcome to Hospitality Marketing the podcast and I Am your host, Loren Gray, and this is episode number 239. So each week we spent around 20 to 30 minutes sharing the most interesting tools. News and techniques being used in the marketing for the hospitality industry will still a quick recap of our weekly live video show this week in Hospitality Marketing, which also airs every Friday at 11:30 a.m. Eastern time. So with that, let’s get started on now.
(Announcer) Today’s new resource still, so our tool for review this week is actually a review of a tool because of the topics that we’re going to talk about in the podcast today and its usability and function value. And that is the G rou g, r u dot com modeling and funnel platform. And for those of you that have been, may not remember our review of it and its use of it, it’s a funnel simulator. What that means is that you’re able to create a modeling as to your business where it’s coming from the revenue it generates, based on the conditions of how it generates that revenue and then other contributing factors. Plus, you plug in your costs associated with each of those platforms and its usability methods. You know the marketing cut dollars you’re spending or the operational costs whatever. And it creates this model for you to determine profitability, opportunity or lack thereof, and you’re able to then create a variety of scenarios. Now, if this sounds overly complex, it really isn’t. But it is a useful tool for what we’re going to be discussing Day and its service profile. It’s relatively cheap. It’s about $60 a month, I believe, to have it actually $6. 1 time fee. Excuse me, not even the monthly fee for it. And you can buy up and by modeling tools with it that are just really templates that I’ve already been pre built that you can then put in your own data. So what I mean by using this is if this is a PPC campaign paid campaign, you can say I have X number of volume of traffic that’s generated my converted my click through rate is X percentage from Derek was my conversion of that click through rate. What is the value of those those conversions on and on and on. And it would create this visual ization ironic that we’re talking about it on a podcast, right? This visualization as to your revenue flow. And then you assigned the costs associated in the case of PPC, the CPC, the cost per click perhaps, and they could put into the total cost of what revenue gets generated versus the cost of generating that revenue. And it goes to the processing. You’re then allowed to see where you’re losing your business. And we might have to amplify other means of marketing at that stage of the flow in that funnel to improve your conversion value ratios and where you could drive more money from it, whether it’s a retargeting campaign Ah, Sierra workflow campaign. And I know this again sounds overly complex on the varieties of what these over present. But it has a purpose of why I bring you back to the table of discussion today and that really goes into more the meat of our conversation today. Using this to G rou g e r u dot com for modeling and for revenue flow streams and funneling. And it’s because we’re going to actually spend more time on the remaining two aspects of our podcast, which is our techniques and news. So with that, let’s get started on the technique off the week now for this week’s hospitality technique. Okay, the technique of the week is based on our current environment. That we’re in right now with is whether or not the coronaviruses are blacks one of 2020. For those unfamiliar with that term, it’s the unforeseen random ization item that came into market that was not anticipated. That has been a read disrupter to that market. None of us saw that this was happening. Nervous talked about this in January, obviously only began to be discussed as of last month as this became a moves worthy discussion from what China was doing in its inception and so forth. So our technique this week is about budget, stress testing and market scenario modeling sounds very impressive to say, but very fundamental in on the reviews now, having gone through both 9 11 in 2001 and the anthrax threat being in Florida and I was in Florida, the times of the extension of that tragedies that were happening and also 2000. With the market meltdown, there are similarities, and there’s dissimilarities between those two. In 2008 it was a financial inability to travel which hit our industry. The fact that people just did not have monies they were the finance institutions were in crisis. People were, you know, unemployment was in the worst direction and growing, and there was just a not wanting to spend money if they didn’t have the money to spend or the income sustainability in 2001. It was an unwillingness to travel and uncertainty of travel, the they had the means and the finances to do so. There was just a lack of wanting to travel, and we’re more closely related to that with the Korean environment right now. Compared to the 2008 scenario, scary number is the 64% of current management of our industry hospital industry have never lived through a downturn. So what does that mean? What’s a lot like a pilot who can fly a plane as long as is in the air? But they’ve never ever had to worry about takeoff and landings. It’s relatively easy to fly a plane once it’s flying. I’m not saying that I would just be quick to jump into the cockpit. I’m sure he’s scared to death of it. But in the sense of skill sets flying, it is father. The more directive common sense aspects of this landing at, however, does require skill. Taking off require skill. Ah, lot more skills than just the maintenance of the flight. And so, too, is with our management not having experienced in downturn because they’ve never had to deal with the fact that the next month isn’t better than than the last. Now think about that for a moment. We’ve been living in the longest stretch of that happening since then 2000 and 2009 10 at a decade of perpetual growth, and for all of us in the marketing of hospitality and all of us in the operations and sales of hospitality, there has been this constant drive off. Well, that’s great. But that was last month, and we have to be better this month announcement. Now that’s a normal business acumen, but we’ve actually had that is reality for a decade we now face and was brought up by, uh, Robert, which we talked about the show’s review today that we’re not in that growth pattern anymore. Ref parties so forth like that. We’ll get to that. But our technique this week is about budget stress testing. Now this is that this is was born out of both of those things when it came to 1000 won in 2008. And what budget stress testing is is taking your curb operational budget and do one of two things or combination. They’re off either reducing your total revenue stream in increments of 10% and or reducing channel contributions. Just removing a channel conversion. You proof the G d a. D D s will disappeared. Proof your consortium disappeared or your f i t. Um, you’re smart business. You’re Corp travel your group business. Whatever. You can do them by segments, you can do them in percentage overall. Just we just lost 10% of our revenue. We just lost 20% of our revenue. We just lost 30% of our revenue and see the impact on your operational budget. It’s like a lowering tied when the tide is high, everything smooth in the water tops are great and everything wonderful. But when the tide lowers, all of a sudden the rocks, the wreckage, the debris on the bottom of it begin to serve, poking over through the surface of the water and their obstacles and issues. Department costs all of a sudden stained blatantly bad because as you lose revenue, there are cost ratios that that sometimes you metric lee go up because they have such high ratio compared to the revenue that that channel or assuming that the department uses. And all of a sudden you realize that there are some stark issues into your operational expenses. Some of the large of courses cost of product in also payroll. You’ll see those dramatically go up and all. First, consider the fact that your profit margins, your net profit margins below evident line are going to disappear. You’re purposely taking out swaths of revenue to make these stress tests decisions on your budget. Looking at where all of a sudden these outcroppings thes rocks begin to show above the surface and looking at the value proposition of what it means either scale them down because of the loss of revenue and or possibly the consideration of their removal. Now, this is something that needs to be looked at now because we know they’re pretty much that as this situation with the Corona virus, whether it’s physically harming people or not. We had a great discussion of the live show about this, which will get to, um, the aspect of the perception of travel is what we’re fighting. People have the means, the capacity of the time, but not the desire. So no rate reduction is going to help you. No amount of inventory thrown at the O. T. S and the desperation of them bringing you business is going to help you. If people decide that they feel that it is not in their best interest to travel, none of that will make an impact for dropping $20 on your rate is not gonna make something. Oh, I’m gonna go now. Sure, I’ll waste what I was worried about, but I’m going to do it doesn’t work that way, So stop racing to the bottom with your rates. It’s a it’s a no win situation for that at all. There are methodologies and we’re gonna be doing the life summit beginning of April to go through what you do any down turn demand economy for marketing, and we’ll discuss the details. Of course, we’ll have a few of them in our general podcast discussions in life sort of discussions between now and April anyway. But I don’t want to take our time for that isn’t much as looking at the value proposition of budget stress testing. You’re your piano, your budget to see where you would have to pre plan for If we go down below this line, I already know what I need to look at and already no need to know what I need to do to control costs. One of the things that comes from benefit of this is that if there is a long term aspect to the impact of what’s being done right now, with the Corona virus having lived through the onion layers of reduction of costs, I can tell you it is painful and heart wrenching. It’s easy on the first line of cuts when you have to start cutting staff the ones that were underperforming the ones that we knew, but unfortunately you know, they just were getting settled in, or the ones that you just you probably hoping there’ll be more value proposition of their position or not those air. There was a relatively easy cause. Nobody likes to terminate people, but of course you know those are the easier ones. The next level is one people that are doing a good job. But there’s just not enough for them to do. And you want to retain your core people that are your highest trained, your highest value. There are key to functionalities within your operation. Well, that’s the third level of cuts when things start going south and those are the ones that begin to hurt the people that have done nothing wrong that have been stellar, that have done everything right. But they don’t either have enough diversification to multi task that somebody that can clean a room and check out at the front desk or fix something or whatever have you answer a phone call, know how to do a certain SAS platform, whatever those people now, when you started to cut those, that’s when it really begins to hurt, and there’s even a level beyond that, and that’s when you’re actually reducing yourself to a skeleton crew where it is theat mitts, like your executive committee is running the hotel. Your chief engineer is your engineer. Your deal s is your sales. You’re you’re you’re from front of your ventilation manager. It was our revenue manager is your front desk. At that point, your GM is cleaning rooms as well as your director of housekeeping, and I have gone that far and know how much it hurts to be at that level. I’ve even gone farther in which idea just had to do without some things because we couldn’t afford having certain departments at all in the crisis of it. So I know that there are deep pits to this and knowing that the faster you are able to retain your cash flow by making these choice. But making these plans ahead of time to know how you’re going to react based on these scenarios will be much more helpful than reaction reacting to them and wondering what to do about them. So budget stress testing is a very valuable function to me. Either know how to do, which will teach it in the summit in April. If you don’t already know it, or if you do know it, this is the time to begin to go through that exercise. The second aspect of our technique is market scenario modeling similar to budget stress testing, but more specific to how do you adjust your spends for marketing? Here are the two worst things you can do in a downturn economy. Lower your rates and give your inventory to 1/3 party. Okay? And the second is lowering your market spent. Why did I say that when you say, Well, we got a retainer, cash flow and so forth. Why shut off your light? Your sign to save your electric bill When the people now drive by not knowing you’re in business, that’s basically in effect. What you’re doing by shutting off your marketing is you’re turning your light out for any of the few people that still would be wanting to do business with you. They no longer confined you because you’ve stopped letting them know where you are. So stopping your marketing is almost as bad as giving away your inventory. If not in some ways worse. So what do you do then? Well, you have to do the same stress testing that we just talked about with your budget. If we were to knock out channels of contribution and or revenues from certain channels, if you were to go through the process of reducing how much revenue you’re getting off of peopIe, see how much ever you were getting off of perhaps your social paid or the time that you’re spending to pay somebody to go over and do your organic on social or your content of element in XY on your website or any of the other things that you’re doing in marketing? Okay, traditional, nontraditional, digital or not digital and you start knocking those down. You have to change your ratios of spend accordingly that if a chapter of effect a channel concretions diminishes the validation of still using that channel, shifting those funds to another channel those air, the considerations you need to model. And that’s where we go back to. The tool we talked about with Guru Euro allows you to put those models together. Here’s your current flow. Here’s your PPC campaigns. Use your email campaigns. Here’s your social campaigns, bottle of all the conversions that you have in the numbers that you have the metrics that you have This is it running now? Now, Scenario number two start dialing down different channels either diminishing the conversion, increasing their costs, diminishing their revenue. Make those changes to see how it impacts the A full flow of the funnel that they’re connected to, To know where else you would need to modify what you’re doing and then create a list of protocols. S O p. A standard operating procedure. If you were that, if things had certain thresholds, maybe, for instance, your first response would be. Now we’re going to change our PPC campaigns toe on Lee, fund those that at a certain ratio of return and let the other ones, even though they were at the time, find enough but not no longer. And let those paws So we’re only focusing on the dollars that were spending is being the most optimally generated revenue that we can. Soto lower the channel cost as much as we can to make sure there’s much flow through. Revenue is possible that goes into your budget, so we’re not costing to make a dollar more than it should. So to speak says you can have great rations that you have a 3 to 1. Well, that’s a 33% cost. 33 cents for every dollar brought in was just in getting that dollar. Now, if your payroll has gone from 32% for are up to 48% well, that’s 48 cents. Attitude the 33 cents and then your food cost of it’s a restaurant. Or if you have operational overhead costs between electric even fixed, and everything else is another 45 cents, you’ve already lost your still spending more money than the money that you’re taking in. So making that cost for 33 cents for 31 up to say when nothing below nothing worse than a 5 to 1. You brought down 25 cents. You just saved the day. At least you’re paying for your cost. You may not be making profit, of course, but you’re keeping the lights on in the door’s open. So you have to look at minimizing your costs in that for that, that markets and remodeling and that that’s where the gear oh tools really helpful, creating with scenarios of what ifs and knowing what you immediately canoe rather than even the extra week it takes for you to figure it out. Could be a week where you squandered money. So knowing these things before these things happen means that as these things happen in the protocol hits like, say, we’re at that stage where we lowered our revenue at this threshold or these channels went below this plot line, Step one is this boo. If it goes down and hits the next threshold, that’s step two. Boom, you’re already doing it at the time it’s happening. So you’re never over spending the money that you shouldn’t be spending and optimizing the total conversion. What you spend the money is for, but certainly do not stop spending the money, the market. So that is our techniques of the week, which is budget stress testing and market scenario modeling. There will be a part of our conversation and definitely part of our marketing summit and the beginning of April. So look forward to that on that brings us to our other section of our podcast today. Now this week’s hospitality news that you should know. Okay, so news and show review we had some great conversations today. Unfortunately for even though we had such a wonderful list from Mr Robert Cole. We really didn’t hit him. We really dived into the fact that some amazing things have been happening in market. The Corona virus, of course, being the keeper of the conversation he did Mr Robert Governed. Put together, he is his own database. He has in keeps track of data from variety of sources. That’s why he’s such a renowned person. Hired Fry Focus, Right? And JD Powers and so forth his own because he is that data data person. Hey, was talking about how he’s kept track of your over your growth rate for our industry from Just said in the past three years. And he doesn’t buy week so that that way there’s not the confusion of, you know, every year, the day shift. So you’re missing weekends versus not weekends, depending on the day shifts and leap years and so forth. So doing it by the week kind of flattens it out a little bit. But what he did show in a 52 week moving average okay was that he said three takeaways in short to US hotel industry occupancy percentage growth rate has dropped 50 base points in each of the past two years. Second point he made average daily rate growth has also been cut in half. Average daily rate growth has also been cut in half since last year, and unfortunately, that combination produces a pathetic 0. 74% growth rate in revenue per available room. Keeping in mind that these numbers were through January, this doesn’t reflect what’s been happening with the impact of the Corona virus to targeted markets. Right now, we know it’s not ah, global thing, but we do know that cruise ships no longer go to the pack. Region flights have been canceled to China. It’s been told that conferences over 5000 and you are not authorized major conferences like I T B and the Mobile Conference in Barcelona by TB in Berlin 160,000 people, all cancelled with Just today, the South by Southwest Conference in Austin, Texas, canceled and large corporations put a six week moratorium on corporate travel. Miles. You might say that to cover their their their risk factors of sending people off to go work and then getting sick because of it, but also to for a until they know how to mitigate this distribution of this virus and its impact, but we know that as with all things these modifying cheeses, time goes forward. But the real aspect of this is that it is a black swan effect for us right now. Whether it stays a long term aspect of what we’re doing for the year is yet to be seen, I think out of consensus, and this is where we talked a lot about the difference was during the current Corona virus and previous viruses as they entered into the public consciousness. Sad to say, the other viruses had a higher severity to their the to those they got it. And because of that, the distribution of it was relatively contained compared to something like this that has a high similar to a flu and quite a long dormant cycle of anywhere from 14 to 21 days. They don’t even know yet how long this incubates before get displays. What does so it can be in general population, and that means it’s gonna blow up. The more blows up the more apprehension of people’s travel plans, the less likely they are going to do to make travel plans. The more over the conservative they’re going to be about those travel plans, the more of an impact to our industry. What we feel is that if there is no semblance of understanding of where this might go by the end of April, we’ll lose our summer season. And then you know, those that have a summer season work. They people travel with kids and go to places and so forth. We will lose our summer season if we don’t have some sort of clarity we feel. By the end of April, on With Me was my co host, Cat Mohammed from HOA, also Tim Peter from Computer Associates and Rubber Cole. As mentioned with Rock Cheetah. This is our conversation we had. If in fact, by the end of July, they’re still not clarity as to where this is going over continues to Degra date. Then we will lose our fall for those that don’t travel with Children and do fall plan, travels and so forth. At the very least, it’s going to impact flight vs Dr Market Travel business That was sustained as a question mark through the entire year because even if it goes the way, Trump says that. Oh, it’s when it gets warmer, goes away. And when it gets cool, my comeback, whatever. But he gets that from, um, it’s still gonna be a growing concern for people to incorporate that into their daily routine lives in consideration. So with that in mind, for those that would know that they’re highly susceptible to to its effect and put themselves in jeopardy, you know, the older and the indigent, those that have respiratory issues or the young we’re not too young. The pre teens, early teens and so forth, Um, or whether you’re going to affect a risk, somebody by you traveling and bring it back to Pete Those same type of people, those are the ones that are gonna be under consideration. I’m not traveling the most compared to those. And I say I’m young, I’m healthy. Not too young, not too old. Andi, I’m not putting anybody risk by my travel. They’re gonna be opportunistic in their travel and again haven’t lived through down economies. Those opportunistic travels union travelers you need to identify good news is compared to the previous times in 08 In 2001. We have amazing tools to demographically profile people create personas and do targeted marketing. The bad news is we’ve never had a social media platform existence as we do now, and the thesis proportion amount of unauthorized information or inaccurate information conspiracy theory or what also makes it very hard to fight when people are concerned about the silliest of things. Just ask anybody that’s not drinking krone, beer or things. That chocolate comes from brown cows. So that was in a wrap up. Our news of the week is that we really did just focus in on all the sources for finding relevant current travel, marketing and all those links that Robert gave us will be in our show notes for the podcast, like the live blogged from Focus Wire and other greats, resource is they’re keeping up to date with the impact in the hospitality industry and riel authorized authenticated numbers, not conspiracy theory, wondering Sze of whether the air in the bubble wrap coming from China has coronavirus in it. It’s amazing the the disinformation that is out there for all of this, so that gives you a sense of what is going on in our nose and show review and remember, you can find us on Google Play apple iTunes I heart rate of soundcloud stitcher Spotify Pandora tune in 36 actually, 30 million platforms and counting the most fun of which I’m noticing as you being used the Amazon Lexa, Google assistant and Siri by simply saying, Hey, Syria. Okay, Google or hey, Alexa, play the hospitality Marketing podcast. Tremendous amount. People are using it. If this is your first time hearing us whatever platform you find us on, please subscribe to it. If you use any of those other platforms, you go there, find us. We always ask you that you raid us and leave us. Um, and make sure that you, by doing so that shares it with other people that might not know that we exist. Our audience is growing really fast where several thousands up now from even last week. We’re doing exceptionally well. We hope that that’s because you enjoy the content. If you have any feedback good or bad, I’d love to hear about it. You could reach out to me at Lauren and Hospitality digital marketing dot com. You could find this in all previous 238 podcasts at hospitality does, remarking dotcom four slash podcasts Look for this episode number 239. There you see all the show notes have referred to for all the topics we didn’t get to in our regular live show and also the ones that we already discussed on the podcast today. And don’t forget that we do have our live video talk show that you conjoining participated every Friday at 11 30 Eastern US time called This Week in Hospitality Marketing The live show this week Coming up will be Episode 240. You can register for listening to on the live show That’s a longer show that runs about two and 1/2 hours in his visuals. That’s just talking heads, but most people listen to it in the background or participate in chat, and that you could be found at hospital digital marketing forward slash dot com fort slash live. And I said, if you want to register for this week’s show Dumber to 40 you go to Billy B. I t dot out. Why ford slash h d m show 240 and that will get you registered and reminded we’ll send you a text if you like. Or a simple email to remind you of. The show starts at 11 30 Eastern. So with that, thank you, as always for the privilege of your time. And I look forward to talking to you next week. You have been listening to this week in Hospitality Marketing The Podcast show 239. Brought to you by hospitality, digital marketing and support of the HSM A Eyes, the Hospitality Sales and Marketing Association International rights reserved Copyright 2020.