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Revenue Management After A Crisis

Recent incidents have added stress to the booking pace of hotels and resorts in Mexico, including an update to the travel warning by the U.S. State Department, reports of tainted alcohol and the impact of natural disasters. These events have generated headlines that may influence travel decisions, particularly by US travelers, the main market for inbound tourism in Mexico.

This scenario is not new for hotels in Mexico, which have been impacted by concerns about travel for more than a decade. Over that time, the travel warning has been updated at least once a year; however, each news report generates uncertainty on travelers and revenue managers should closely monitor the pace and work hand in hand with the communications team to activate a strategy.

The most common practice for revenue managers is to measure the impact of bad press on cancellations and inquiries regarding safety, but while this can provide a direct and immediate idea of lost business, there are other tools that can be used more proactively.

Reach your travelers in advance on social media channels to get in front of any questions and provide the most information you can, including travel forums and comments and queries on your brand and OTA sites. Google Analytics can also provide important insights, such as dips in conversion that can be traced to certain geographies.

The Key: Context

Bad press, mainly from international media, hits the heart of tourism and could deliver a major blow to Mexico’s $20-billion-a-year tourism industry, which represents about 7% of the country’s gross domestic product. Hoteliers and tourism representatives should embark on an aggressive campaign to add context so travelers can make well-informed decisions.

Revenue managers first notice the impact of bad press on cancellations, and so the reservations team must be ready to answer questions and provide context with informed answers. The same can be extended online through the marketing team. An approved Q&A should be uploaded to the site along with references to positive media coverage that can provide certainty to readers. The same applies to social media.

Provide facts for reference for travelers, such as distance or crime rates in your country. Revenue managers can provide Marketing the top feeder markets so they can build Q&A tailored for those states or cities.

For example, look at the state of Quintana Roo – where the resorts of Cancun, Playa del Carmen and Tulum are located – where 169 homicides were reported from January to July 2017, double last year’s number. Adding context, one can see that Quintana Roo welcomes 10 million tourists a year, so the probability of being caught in a violent incident are much smaller than headlines might suggest.

When incidents affect a large country as Mexico, distance references can be on your side. A good example is a statement issued by the Puerto Vallarta Tourism Board, when it distanced itself from the affected regions mentioned on the travel warning. The statement read, “The U.S. Department’s Travel Warning as it pertains to the State of Jalisco highlights rural highways and areas that border states to the south, almost 250 miles from Puerto Vallarta or the distance between New York and Boston; or Los Angeles to Las Vegas.”

Get Your Strategy in Place

Hoteliers should also realize one of the most powerful tools is already in-house. Employees must be empowered to incentivize happy customers to share their experiences on social media and in their circle of influence. Beyond relying on personal recommendations from customers, revenue managers can take advantage of actual customers’ network by creating bounce back offers and/or provide loyalty points to guests whose recommendations result in bookings.

Keeping an eye on other markets always pays off. Beach destinations such as Riviera Nayarit can benefit from Los Cabos’ bad press and partner with OTAs to drive bookings via travel ads. The same applies to Cancun and the Riviera Maya, destinations that can take advantage of decimated supply in the Caribbean.

Today’s revenue managers are doing more than yielding rates; now they can drive the development of strategies to target need markets and increase revenue across the hotel.


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Pamela Espinoza, Contributing Editor, Latin America

Pamela Espinoza joined Duetto in 2017 as a Contributing Editor covering revenue management and the hospitality industry for the Latin America region. She is based in Mexico.

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