Low season lessons we can learn from Silicon Valley

Summer has come to an end for hostels in the Northern Hemisphere, and now we have to start planning for the low season. Jordan Hollander, founder of HotelTechReport.com, has offered these six lessons he says we can take from Silicon Valley to survive when budgets get tight.

6 lessons from Silicon Valley to help hoteliers conquer budget season

“As every hotelier knows, budget season is the most stressful time of year. It doesn’t matter whether you’re a GM, marketer, revenue manager or even an owner – we’re all struggling to keep our heads above water right now.

We are forced to deeply analyze last year’s performance, market conditions and strategies then setup a concrete plan of how we’re going to attack the market next year despite massive global and market-based instabilities.

Silicon Valley’s startup culture understands this kind of stress well. Startups deal with existential crises on a daily basis so The Valley has evolved sophisticated methods and practices to win under intense pressure.  Bring the Silicon Valley philosophy and lean startup methods into your hotel this season to differentiate from the compset, win budget season and outperform.” 

The six lessons are summarized here:

1) Set-up structured team brainstorming sessions
Rather than having a single person or a small group of managers develop plans for marketing, budgeting, revenue management, etc., include the people who spend the most time with your guests. Management has the numbers to crunch, but the team out on the floor has the other side of the story. Talk to receptionists, housekeepers, tour guides, and anyone else who probably knows better than you what your guests want, need, or would love in order to get their input before making any decisions. Not only will it give a bigger picture and eliminate possible blind spots, but it will also let your team know that their input is valued and encouraged.

2) Prioritize and keep it simple
You simply can’t do everything, and by trying you’ll just reduce your effectiveness. So set your sights on the things that are most productive. Make a list of all the things you would like to accomplish with your hostel this year, and then prioritize them based on their value. (value = expected return X probability of success)

3) ‘Think Different’
If you hire employees from your competitors and operate with the same PMS, then you’ll get the same results as everyone else. So invest in better technology. Get a modern PMS (this article suggests MEWS Systems) and revenue management software (LodgIQ is mentioned) to leverage technology and data.

4) Invest in growth
Avoid the “where can we cut?” approach to budgeting, and instead double down on investments that have proven to be good. If you get a good return on ad retargeting, then keep it up until it quits working for you. Dedicate a marketing budget for your website, Google ads, Facebook ads, etc., and plan on shifting more of that budget toward the methods that give the best results. Keep looking for the hot new digital trends, because what worked last year will probably not be quite as successful this year.

5) Leave room to fail fast and experiment
Try new things, and set a budget for experimentation. Not everything will work, but some things may drive great revenue for you. Some suggestions from this article include:

• Organize a weekly music event for locals
• Try new booking engine technology to drive upgrades on your website
• Look for technology startups who will offer you their products or services for free because they need customers for a proof of concept and testimonials

6) Find ways to keep a level head and de-stress
Chill out. Set aside time for decompression and reflection so you don’t go nuts. Give your team this chance too, because they’ll need it just as badly. Let them know you care about them. Ask about their personal goals. Get together as a team to be human and celebrate recent successes.