The hospitality industry is a multibillion-dollar industry with lots of career opportunities in hotels, theme parks, restaurants, country clubs, etc. It is one of the fastest-growing sectors as a lot of industries are involved in it.
Though it can be very profitable for aspiring and established entrepreneurs, it can get challenging as it requires charisma, drive, and innovation to ensure you can meet your customers’ demands. Growing a hospitality business for profit requires a lot of thought and innovation. In this article, we’ll look at some practical ways to grow a profitable hospitality business.
1. Yield Management
Yield management refers to anticipating, understanding, and influencing your customers’ behavior to increase your business revenue to the max. This principle was first used in the hospitality industry in the late 80s. The main objective of yield management is not just to increase your rates or occupancy; instead, it involves forecasting your business’ supply and demand through different key factors to maximize your revenue. Let us consider some yield management examples. If you have a hotel, yield management will allow you to maximize the profit you can make from a specific number of rooms that must be sold on a deadline.
Another example is if you have a hotel located next to an event center or stadium, you will charge more for rooms than you do on a typical weekday or weekend during a conference or sporting event. Yield management involves targeting the right customer at the right time and selling for the right price.
It involves using gathered data to understand your customers and their sensitivity to pricing and combining that with seasonal demand. High demand, seasonality, and special events can allow you to alter your rates to increase revenue. Though the idea isn’t to increase rates only, it also involves attracting the right customer at the right time.
Yield management allows you to make more profit from your existing inventory.
2. Create a Website
Your hospitality business should have a well-maintained website as it adds to the first impression prospective customers have when they check out your business. For example, if you have a vacation rental, you can hire a competent web designer or a web design company to help you build a vacation rental website. Also, customers can make bookings through your website if you have one, and this will help you save more money as you will not have to rely on listing channels to gain customers.
Though listing channels can help you get bookings, you’d have to pay a commission and follow the transaction terms, which you will not det. When you have your website, you’ll have more control over how you present your business to customers. You can display a photo slideshow with high-resolution images of the property or add other enticing features that will help you gain more customers. A professional website helps to give your business a professional image while making it more visible online.
3. Maintain and Improve the Quality of Your Service
The hospitality industry is a highly competitive one, so it is important to stay on top of your game to gain more revenue. If your business is reputable for providing quality service, then you should maintain that standard. You can check out your competitors to get ideas on how to improve your service and set your business apart. This is very important as the reputation of your hospitality business is primarily determined and affected by your quality of service.
If your customers are satisfied with your quality of service, they are more likely to recommend you to prospective clients. To get more ideas on how to improve your service, you can check the online reviews about your business. Check what your past clients have said about their experience, what they like, what they dislike, and any improvement they might suggest. Once you improve your service quality, new and old customers will be willing to pay more even if you increase your rates as they will get enough value for their money. To grow a profitable hospitality business, you should be ready to offer more value than your competitors.
4. Have an Active Social Media Presence
This is a great way of making your hospitality business more visible online. It is also a means of reaching prospective clients. Apart from creating and maintaining a website, you should have an active presence on Facebook, Twitter, and Instagram.
These are where a bulk of your prospective clients are, and most brands take advantage of this. Nowadays, brands and businesses employ social media handlers that stay in charge of their social media pages. They are responsible for creating content and interacting with customers and prospective clients on social media.
You can post images and videos of your property on social media to attract new customers. Another way you can grow your business on social media is through sponsored ads. Most social media platforms offer various forms of advertisements at a reasonable price.
With sponsored ads, you have a higher chance of getting new customers or driving traffic to your website as you’d be able to reach a wider audience.
5. Create a Rental Agreement
If you are fully managing your business, then oral agreements with customers may not be enough. Your clients may have some assumptions about the terms and conditions or interpret the rules and regulations differently.
Sites like Airbnb can take care of this for you if you are not fully managing your rentals. For example, you can easily create an Airbnb house manual visible to prospective clients once they click on your property.
To avoid misconceptions and misunderstandings, you should create an agreement that will be visible on your website or any booking medium you prefer. Your guests will sign this agreement and protect both you and the guest if there is a dispute.
Though the terms and conditions may vary depending on the type of hospitality business, you can consult a business attorney for verification before using the agreement for your business.
A rental agreement should include information about the property, rental party details, occupancy limitations, the minimum stay requirements, house rules, rates and additional fees, cancellation policy, payment details, and the customer’s signature.
You can add other details and terms depending on your type of business. Creating a rental agreement is an excellent way to ensure your hospitality business runs smoothly as it makes it easier to prevent and resolve disputes between you and your customers.
6. Make the Booking Process Easy
A complicated or strenuous booking process is likely to discourage new clients from patronizing your business. Firstly, your hospitality business should have an online booking and buying platform.
A large percentage of people prefer to make bookings online. If your business does not have an online booking platform, you are bound to lose a lot of customers. If you choose to use listing sites or booking platforms, make sure the platform is reputable and offer good customer service.
If you use your website for reservations, then customers should be able to make a booking with simple steps. The required information boxes should not be excessive.
The less time your guests spend booking, the better. You should include additional informational text to help your guests through the booking process. Before your booking system goes live, ensure you pre-test it to make sure it’s hitch-free. Also, you can create a mobile app that allows your guests to make bookings and other transactions.
7. Keep in Touch with Your Customers
Apart from gaining new customers, a good way to grow a profitable hospitality business is retaining valuable customers. Guests will value a company that can offer a personalized experience.
If your guests can get a personalized experience, they are more likely to make more bookings or refer your business to others. Always interact with your guests on a personal basis. You can send emails or appreciation messages after a successful booking.
You can also refer your customers to your social media pages or ask them to sign up for your newsletter if they prefer to. Though you shouldn’t spam your customers with ads or emails, ensure you send information periodically about new offers, promotions, or other relevant details.
This will help keep your business on your customers’ minds, thereby increasing the chances of having repeat bookings. Once you identify your most valuable customers, you should try to keep the communication lines open. Also, you can ask for referrals or recommendations from your long-term customers.
As we have previously stated, the hospitality industry is very competitive. You need to come up with creative ways to market your business. To ensure you get a steady flow of revenue from your hospitality business, ensure you follow these tips we have given above. Apart from these, always be on the lookout for new trends and innovations in the hospitality industry to help you stay on top of your game.
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Exclusive: China’s Huawei, reeling from U.S. sanctions, plans foray into EVs – sources
By Julie Zhu and Yilei Sun
HONG KONG/BEIJING (Reuters) – China’s Huawei plans to make electric vehicles under its own brand and could launch some models this year, four sources said, as the world’s largest telecommunications equipment maker, battered by U.S. sanctions, explores a strategic shift.
Huawei Technologies Co Ltd is in talks with state-owned Changan Automobile and other automakers to use their car plants to make its electric vehicles (EVs), according to two of the people familiar with the matter.
Huawei is also in discussions with Beijing-backed BAIC Group’s BluePark New Energy Technology to manufacture its EVs, said one of the two and a separate person with direct knowledge of the matter.
The plan heralds a potentially major shift in direction for Huawei after nearly two-years of U.S. sanctions that have cut its access to key supply chains, forcing it to sell a part of its smartphone business to keep the brand alive.
Huawei was placed on a trade blacklist by the Trump administration over national security concerns. Many industry executives see little chance that blocks on the sale of billions of dollars of U.S. technology and chips to the Chinese company, which has denied wrongdoing, will be reversed by his successor.
A Huawei spokesman denied the company plans to design EVs or produce Huawei branded vehicles.
“Huawei is not a car manufacturer. However through ICT (information and communications technology), we aim to be a digital car-oriented and new-added components provider, enabling car OEMs (original equipment manufacturers) to build better vehicles.”
Huawei has started internally designing the EVs and approaching suppliers at home, with the aim of officially launching the project as early as this year, three of the sources said.
Richard Yu, head of Huawei’s consumer business group who led the company to become one of the world’s largest smartphone makers, will shift his focus to EVs, said one source. The EVs will target a mass-market segment, another source said.
All the sources declined to be named as the discussions are private.
Chongqing-based Changan, which is making cars with Ford Motor Co, declined to comment. BAIC BluePark did not respond to repeated requests for comment.
Shares of Changan’s main listed company Chongqing Changan Automobile rose 8% after Reuters reported the discussions. BluePark’s shares jumped by their maximum 10% daily limit.
GROWING EV MARKET
Chinese technology firms have been stepping up their focus on EVs in the world’s biggest market for such vehicles, as Beijing heavily promotes greener vehicles as a means of reducing chronic air pollution.
Sales of new energy vehicles (NEVs), including pure battery electric vehicles as well as plug-in hybrid and hydrogen fuel cell vehicles, are expected to make up 20% of China’s overall annual auto sales by 2025.
Industry forecasts put China’s NEV sales at 1.8 million units this year, up from about 1.3 million in 2020.
Huawei’s ambitious plans to make its own cars will see it join a raft of Asian tech companies that have made similar announcements in recent months, including Baidu Inc and Foxconn.
“The novel and complicated U.S. restrictions on semiconductors to Huawei have slowly been strangling the company,” said Dan Wang, a technology analyst with research firm Gavekal Dragonomics.
“So it makes sense that the company is pivoting to less chip-intensive industries in order to maintain operations.”
In the United States, Amazon.com Inc and Alphabet Inc are also developing auto-related technology or investing in smart-car startups.
Huawei has been developing a swathe of technologies for EVs for years including in-car software systems, sensors for automobiles and 5G communications hardware.
The company has also formed partnerships with automakers such as Daimler AG, General Motors Co and SAIC Motor to jointly develop smart auto technologies.
It has accelerated hiring of engineers for auto-related technologies since 2018.
Huawei was awarded at least four patents related to EVs this week, including methods for charging between electric vehicles and for checking battery health, according to official Chinese patent records.
Huawei’s push into the EV market is currently separate from a joint smart vehicle company it co-founded along with Changan and EV battery maker CATL in November, two of the sources said.
(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; additional reporting by David Kirton in Shenzhen; Editing by Sumeet Chatterjee and Richard Pullin)
Facebook switches news back on in Australia, signs content deals
By Renju Jose and Jonathan Barrett
SYDNEY (Reuters) – Facebook Inc ended a one-week blackout of Australian news on its popular social media site on Friday and announced preliminary commercial agreements with three small local publishers.
The moves reflected easing tensions between the U.S. company and the Australian government, a day after the country’s parliament passed a law forcing it and Alphabet Inc’s Google to pay local media companies for using content on their platforms.
The new law makes Australia the first nation where a government arbitrator can set the price Facebook and Google pay domestic media to show their content if private negotiations fail. Canada and other countries have shown interest in replicating Australia’s reforms.
“Global tech giants, they are changing the world but we can’t let them run the world,” Australian Prime Minister Scott Morrison said on Friday, adding that Big Tech must be accountable to sovereign governments.
Facebook, whose 8-day ban on Australian media captured global attention, said it had signed partnership agreements with Schwartz Media, Solstice Media and Private Media. The trio own a mix of publications, including weekly newspapers, online magazines and specialist periodicals.
Facebook did not disclose the financial details of the agreements, which will become effective within 60 days if a full deal is signed.
“These agreements will bring a new slate of premium journalism, including some previously paywalled content, to Facebook,” the social media company said in a statement.
The non-binding agreements allay some fears that small Australian publishers would be left out of revenue-sharing deals with Facebook and Google.
“It’s never been more important than it is now to have a plurality of voices in the Australian press,” said Schwartz Media Chief Executive Rebecca Costello.
Facebook on Tuesday struck a similar agreement with Seven West Media, which owns a free-to-air television network and the main metropolitian newspaper in the city of Perth.
The Australian Broadcasting Corp has said it was also in talks with Facebook.
Google Australia managing director Mel Silva said in a statement published on Friday the company had found a “constructive path to support journalism”.
She thanked Australian users of the search engine for “bearing with us while we’ve sent you messages about this issue”.
Facebook and Google threatened for months to pull core services from Australia if the media laws, which some industry players claim are more about propping up ailing local media, took effect.
While Google struck deals with several publishers including News Corp as the legislation made its way through parliament, Facebook took the more drastic step of blocking all news content in Australia.
That stance led to amendments to the laws, including giving the government the power to exempt Facebook or Google from mandatory arbitration, and Facebook on Friday began restoring the Australian news sites.
(Reporting by Renju Jose and Jonathan Barrett; Editing by Richard Pullin and Jane Wardell)
China’s factory activity growth likely moderated during February holiday lull – Reuters poll
BEIJING (Reuters) – China’s factory activity likely grew at a slightly slower rate in February as factories closed for the Lunar New Year holiday, a Reuters poll showed, although growth is expected to remain firm, buoyed by an early resumption of production.
The official manufacturing Purchasing Manager’s Index (PMI) is expected to dip marginally to 51.1 in February from 51.3 in January, according to the median forecast of 20 economists polled by Reuters. A reading above 50 indicates an expansion in activity on a monthly basis.
Chinese factories typically scale back operations or close for lengthy periods around the Lunar New Year holiday, which fell in the middle of February this year.
However, the resurgence of COVID-19 cases in the winter had prompted local governments and companies to dissuade workers from travelling back to their hometowns, giving a boost to the earlier-than-usual resumption of production at many factories, analysts say.
“Although government COVID-19 prevention measures may constrain some manufacturing activities in the near-term, the fact that a majority of migrant workers stayed in their workplace cities for the holiday should facilitate an earlier resumption of business activity following the holiday this year,” said analysts at Nomura in a note to client on Thursday.
Wang Zhishen, a migrant worker from Gansu, told Reuters that his factory, a manufacturer of logistics boxes in the manufacturing hub of Dongguan, only closed for three days during the holiday, thanks to overwhelming businesses. Lured by the 1,500-yuan cash subsidy his factory offered, he chose to work through the holiday.
The Chinese economy has largely shaken off the gloom from the COVID-19 health crisis, with consumers opening up their wallets after months of hesitation. Growth is now set to rebound sharply this quarter, also helped by the low base effect of a year ago.
The country has successfully curbed the domestic transmission of the COVID-19 virus in northern China, with the national health authority reporting zero new local cases for the 11th straight day. Cities that were on lockdown have since vowed to push for a work resumption at full speed.
The official PMI, which largely focuses on big and state-owned firms, and its sister survey on the services sector, will both be released on Sunday.
The private Caixin manufacturing PMI will be published on Monday. Analysts expect the headline reading will dip slightly to 51.4 from 51.5 in January.
(Reporting by Stella Qiu and Ryan Woo; Editing by Sam Holmes)
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