The importance of profit optimization during crisis times

The international tourism industry is reeling from the impact of the coronavirus. Travel agents and tour operators are devoting most of their time to dealing with cancellations and enquiries from anxious customers as to whether it is safe to travel.

As the number of infected persons continues to rise across the world, 24-hour news coverage is fuelling levels of attention and fear which from some perspectives may seem disproportionate to the actual risks.

However, the drastic impact on the travel industry is already clear and the serious threat to public health cannot be wished away.

During this period of fire-fighting, travel agents and tour operators must deliver excellent customer care, clever marketing tactics and get ready for the rebound. Because, let’s all remember, the current crisis is not going to last forever.

The current situation is fast-moving and changing every day. Keep your customers fully informed and put their safety and wellbeing first. This will build their trust and loyalty.

Demonstrate your expertise and professionalism by posting regular updates on your website and through your marketing channels. Consider giving full refunds to those who wish to cancel. If this is not appropriate, give customers full credit for future bookings. 

Have a clear internal communication strategy too. Check that you have mobile numbers and emails for all of your employees as well as their family members. Make sure that your company’s messages and actions are clearly communicated rather than allowing rumours or speculation to circulate.

Of course, the slump in tourism has resulted in some very attractive discounts. Do not engage in blanket marketing which may alienate your general audience. Try and identify those who are prepared to travel in the immediate months and push your special deals in their direction.

Many are understandably nervous about air travel. Now is a good time to promote domestic destinations and packages that couples and families can reach by car.

Plan for a profitable future

With fewer bookings coming in, you will have time to turn your attention to strategic planning for the coming months. Take a deep, structural look at your revenue, overheads, and profit. In times of crisis, your immediate reaction may be to cut costs. Proceed with extreme caution. There is only so much you can cut before you reach the bone.

In a downturn, it is more important than in good times to meet the essential requirements of running your business. In fact, we would advocate that with careful planning, you should actually be investing in the long-term health of your business right now.

Get the whole team together and create an in-depth study of your marketing strategies. Find out what has and hasn’t worked over the past couple of years and look at what your rivals have done successfully too.  

Such an in-depth study will help you redefine and accurately segment your current customer base and identify potential new markets. Targeted advertising campaigns will then increase your returns.

Another area of the business to invest in now is IT. Optimizing your IT operations can give you a significant competitive edge by introducing new ideas and technologies.

Every time you make a sale and take a hotel booking, the value of that sale moves up and down on average 18 times up until check-in time. Knowing when to re-shop that booking at the optimal price point, will result in a saving that goes straight to your bottom line.

AI-powered profit solution

The founders of Hotelmize looked to the very latest stock market trading technology for inspiration and created a series of algorithms powered by artificial intelligence and based on data from 23 million hotel rates.

Hotelmize’s unique profit optimization solution accurately identifies when the price of a booking reaches its very lowest and increases your net profits by at least 30%.

Last year Hotelmize re-shopped US$132m worth of hotel bookings, creating an extra average profit of US$72.00 per sale for its clients.

Integrating Hotelmize’s profit optimization software into your booking system is easy. The technology works behind the scenes without creating any extra workload for you. Room mapping ensures that re-shopped rooms are equivalent to the original booking.

You are simply boosting your profit margin thanks to the automated AI-forecasting of the price movements of existing bookings.

We understand that travel agents and tour operators are facing some difficult months ahead. That’s why the Hotelmize platform is available on a success-based model, making it completely risk-free.

Ready for the recovery

The world is waiting to see whether warmer spring weather in the northern hemisphere will slow the spread of the coronavirus. Although we still don’t know for sure, the hope is that the new virus may behave like the flu and ebb away as winter ends.

If this is the case, the crisis could be relatively short-lived although this hope comes with some gloomy caveats. Experience from previous crises suggests that the negative impact on travel habits could last many months after the virus has peaked. And in the southern hemisphere, winter is still on its way!

What’s for sure is that Covid-19 has already resulted in millions of Chinese and Italian residents having severe restrictions placed on their daily lives and ability to travel. Other governments are already imposing similar restrictions in an effort to contain the virus.

Once the crisis has well and truly passed, there is likely to be a huge amount of pent-up demand from people who want to travel and enjoy their new-found freedom once again.

Travel agents and tour operators will need to be extra ready for the recovery. Putting in place Hotelmize’s profit optimization solution now will give you a competitive advantage and ensure that you make the most of the rebound.