4 Ways That Manchester Hotels Can Drive Revenue
Manchester’s hotel sector and its pipeline of planned hotels is in really good health, Colliers cited Manchester’s hotel sector as being second only to London in the UK. Meanwhile. the Manchester Evening News reported that last year hotels in the Greater Manchester area achieved their highest level of occupancy ever recorded. Manchester’s occupancy also recently increased from 79% to 81% according to Collier's, which is on a par with London - demonstrating Manchester's impressive growth in this industry over recent years.
As the pipeline of hotels comes into fruition, the environment will inevitably become more competitive and therefore it’ll be more important than ever for hotels to differentiate themselves and take advantage of emerging trends.
Based on our extensive experience working in the hotel sector, the following article offers 4 ways that Manchester hotels can drive revenue across both the leisure and corporate market.
1. Drive Leisure Revenues By Creating Experience Packages
Insight from The Manchester Marketing STEAM report tells us that 91% of visits to Greater Manchester are day visits only - clearly there is an opportunity here to convert a higher proportion of tourists to overnight stays. In order to take advantage of this opportunity, hotels must promote holistic leisure experiences rather than just hotel rooms. Experience packages are also a useful tool for driving direct bookings, circumventing the reliance on expensive aggregator sites such as hotels.com
Further insight from the 'Greater Manchester Leisure Visitor Survey 2014' tells us that family groups make-up the majority of the staying visit market (38%). This fact highlights how critical it is for Hotels to build packages and experiences around family needs.
By focussing less on selling rooms and more on selling experience solutions, hotels will captivate their target audience who may have been considering visiting Manchester for an event, but not necessarily considering staying overnight.
Again, data from Manchester Marketing shows that the majority of visitors to Manchester visit events or attractions. Creating compelling experience packages around these events and attractions creates a product offering that separates your hotel from the rest of the pack. Think about how you can add value to a customer's overall break experience instead of just their room. For example, offering a complimentary overnight gift wrapping service, or post shopping spa foot massage could be perfect for tourists visiting the Manchester Christmas Markets.
As well as this, stay, eat and enjoy packages could be created for guests visiting specific theatre shows or music events. In short, there are distinct benefits for hoteliers who reach out to local attractions and are creative with partnership promotions and discount offers. Hotels could offer Christmas shopping packages that include a complimentary wrapping service in the evening whilst guests visit the German Christmas market.
An example of such packages can be seen below from Pendulum hotel who were reaching out to the Manchester Pride audience.
Creating a unique landing page will also rank in the search engines, increasing direct hotel bookings. Last year, Manchester’s Premier Inn also offered a Christmas Markets package.
The call to action at the bottom of this page will help convert prospects, and the search engine benefits of those searching for ‘Manchester Christmas Market hotels’ has proven fruitful. Premier Inn rank on page one for that search term on Google.
The hotel experience trend has already been adopted by certain brands in London too, who are hoping to drive additional revenue in a competitive marketplace.
Hilton FoL - Hilton Hotels created content based around events in London including the ‘Harry Potter and The Cursed Child’ play and the Queen’s 90th birthday and royal exhibition.
The results generated more than 7.7 million impressions as well as 95,173 direct click-throughs to the Hilton Hotels Fans of London landing page, where over 2,000 individuals went on to book a stay.
Blakes Hotels in London are also using this technique to target potential customers to their hotel. London’s Fashion Week is a key date in the calendar for them, as can be seen below.
There is a clear call to action on the page to ‘book now’ and this landing page also enables Blakes London to rank on page 1 of Google for ‘London Fashion Week Hotels’.
Destination packages evidently work, and hotel brands are adapting their strategies to incorporate them, driving more revenue and people through their hotel doors. But this isn’t the only way that hoteliers can build up their business in a saturated market - and we’ve collected further revenue-building ideas below.
2. Create Family Friendly Propositions
Creating experiences isn’t the only way to attract customers. Another interesting fact that Northern hoteliers in particular should note, is that 38% of overnight visits are generated by family groups, in comparison to 27% couples. Many hotels, especially at the premium end, are failing to cater to this important market. Therefore, there’s a distinct gap for hoteliers who should be appealing more to this audience.
Other leisure markets are way ahead in catering to families needs. Take for example, Jamie's Italian on King Street in Manchester, where kids are treated to activity packs on arrival - and only last week the MEN praised Gino D'Acampo's new restaurant in the Corn Exchange for having the best baby changing facilities in the city.
Yet within the hotel sector, there’s a perception that children are not welcome - or at the least, will be an inconvenience.
But to carve a unique space in a competitive market, hotels could easily tap into this audience. For example, little touches mean a lot to families, and thinking about how you can make their stay more comfortable can pay dividends in terms of reviews, recommendations and repeat bookings.
Why not look into adding the following items to your offering;
- In-hotel games stations
- Activity packs on arrivals
- Kids eat/stay free
- Complimentary baby change packs when a cot is requested
- Complimentary water bottles and fruit bags in room
Challenging parents’ accepted beliefs by offering a family-friendly proposition could create a real point of difference both within Manchester and also the UK, allowing a unique point of sale for those who tap into this audience first.
3. Develop Creative Meetings and Events Space
The traditional meetings and events proposition is currently being turned on its head by a need for more innovative & creative meeting space solutions. This trend is currently being satisfied by a number of independent meeting operators and has yet to be grasped wholeheartedly within the hotel sector - and it could be an excellent way for hotels to increase their revenue options.
According to the Enviable Workplace, there are four types of spaces that support creative work. The space must be stimulating, offer space to think, provide space to share and collaborate, and also space to connect and explore.
Therefore, an environment that is more collaborative and mentally stimulating, for example, will appeal more to customers than a traditional hotel meeting room environment.
It’s clear that the old-fashioned meeting room hire model will mature and dwindle over the coming years as we look to more creative and inspirational meeting solutions. We are seeing a huge growth in collaborative spaces and this trend will grow - and a great example of this is Ziferblat in Manchester.
This meeting space charges customers by the time they spend there - and this price includes their F&B offering also. This destination is a key collaborative meeting venue that’s doing things a little differently, and there’s much that hoteliers can glean from this proposition and adopt as part of their meeting and events strategy.
Some hotels are already creating innovative meeting spaces in Manchester, including the Malmaison.
Malmaison are rolling out a ‘Work + Play’ concept across the country, and Manchester is their second destination to launch after Birmingham. They offer everything from wine tasting to bar takeovers to DJs in their meeting rooms - revolutionising traditional meeting ideologies. Their are areas where groups can walk in and use without charge, smaller meeting rooms called pods that can be booked by the hour and groups are free to walk in and use a pod without booking together with larger spaces and break out areas for larger meetings and events.
Paul Roberts, Chief executive of Malmaison had the following to say about the project, "In today's increasingly connected world, more and more people are working on the go. They are looking for somewhere that is both practical and inspiring to spend a few hours" and this is what makes this hotel meeting space so great.
This new meeting space ideology is also found in London. The Hoxton, for example, offer unusual and inspiring meeting rooms. They have an entire ‘apartment’ dedicated to this venture and this includes a pantry, a playroom, a library and much more. Brands can rent out these spaces for their employees - and the main idea is to provide a place to feel comfortable and relaxed for meetings.
Manchester hoteliers have the capability to take the lead in offering innovative meeting spaces. Already, offices in the city are making the most of this growing opportunity, and it would be impressive to see hotels making the most of this market, too.
Innovative ideas that hoteliers could adopt include:
Stress balls, massage chairs, and ergonomic seating
Wall murals and inspirational quotes
Projector - TED Talks playing on loop with subtitles
Plants! Productivity-enhancing greenery has boundless benefits
‘Mind Gyms’ - Giant Chess, Jenga, Puzzles
Varied seating e.g. bean bags, recliners, sofas, snug area
Reading Space - Place for concentration
Vintage Arcade Games
Library with Inspirational Business Literature
Photo Booth - Great for networking and building relationships
Sonos® - Collaborative music playlist
Colour, and lots of it! More on the psychology of colour here.
Ping pong - need we say more?
An image of one of the meeting rooms at W Hotel in London. Image sourced from wlondon.com.
In short, hoteliers need to think of these areas as a creative experience, rather than just a meeting space - but the potential for these spaces moves beyond business meetings.
Instead of remaining empty over the weekend, the areas could be used for children, offering play spaces or day care centres whilst parents relax in the spa or bar area. This would help to bridge the gap between hotel and family relations that we touched upon earlier, and would help prevent empty areas within hotels properties over the weekend.
A unique point of sale has the power to position a hotel above competing businesses. Therefore it’s important to tap into emerging trends such as the unique meeting rooms to differentiate a hotel brand from the rest of the market.
4. Differentiate The Food & Beverage Offering
Most hotel restaurants are busy in the morning for breakfast, but anecdotal evidence suggests that only 10/15% of guests actually use the hotel restaurant for an evening meal. Moreover, given the ever increasing number of restuarant openings in Manchester coupled with the strong pipeline of new hotels, differentiating the food & beverage offering becomes even more important to stay competitive. Hotel Indigo, Intercontinetal Hotel Group's boutique brand, do this by researching their hotel locations and then creating a restaurant proposition that emulates and celebrates the local area.
“The Rooms department is really the dominant revenue center in a hotel. By itself it can account for anything between 60% and 80% of hotel revenues. In comparison, the Food and Beverage department contributes between 10% and 20% of Total Revenues.” S. Lakshmi Narasimhan, Found of Ignite Insight LLC.
With the above statistics in mind, hotels hoping to drive further revenue in this way could do so by creating a destination restaurant proposition. The French by Simon Rogan at The Midland in Manchester is a fantastic example of this, and the chef name attached to the restaurant is another unique selling point. Simon Rogan has just been voted UK Chef of the Year at the AA Hospitality Awards, another string to his bow which is sure to delight The Midland as more attention is paid to their restaurant. Their head chef has also made it to the final of popular BBC show The Great British Menu - again drawing attention back to The French, and consequently to The Midland Hotel.
Jonathan Segal, CEO of The One Group, “realised that a well-conceived hotel restaurant concept would add around £10 GBP to hotel room ADR, coupled with an additional 5% hotel room occupancy level, delivering more net income on the balance sheet.” Boutique Hotel News.com Therefore, the value of a developed food & beverage offering can’t be ignored.
However, food & beverage revenue isn’t just linked to those staying for the night in the hotel properties. Hoteliers need to be creative with packages available in order to bring in non-residential customers - which will then make their hotel restaurants a destination in their own right.
For example, The Palace Hotel in Manchester has recently seen the opening of The Refuge. Described as ‘a new dining and drinking space’, this attraction has been designed to generate revenue for The Palace within its own right - and this has been achieved by creating a new, unique space with unusual decor such as a winter garden inside a glass atrium.
But not every hotel has to undergo a multi-million pound refurbishment to create a destination F&B offering. Steak and Lobster at the Radisson host a Jazz Supper Club at the end of every month to maintain footfall during a traditionally low demand period.
This revenue opportunity is more about adopting whatever resources your hotel already has in order to create appeal throughout the day, which in turn will generate more business for the hotel overall.
As the number of hotels increases throughout the UK and Manchester, Hoteliers will need to become more inventive with the hotel experience.
Whether this be through more innovative leisure solutions, creative meetings spaces, or differentiated food and beverage propositions, there are plenty of opportunities to generate new avenues for revenue.
Becoming innovative about the meeting and events propositions on offer will also revitalise and enable hotels to compete with the new alternative collaborative environments being offered.
Finally, creating a restaurant proposition that is a destination within its own right will drive additional revenue and that hard to chase share of total spend.
All of these elements can work together - kids could be given access to the creative spaces at weekends, the great eating proposition appeals to the meeting and event organiser and the destination restaurant drives hotel nights. It’s all about finding what works for a hotel property, thinking about what target audiences will be interested in, and then adopting it as part of the hotel business strategy in the future.
About The Author
Jamie Watson is managing partner at Pixel8, a brand, marketing and digital agency based in the Northern Quarter, Manchester. For over 10 years, Pixel8 have been working with some of the world’s largest and fastest growing hotel chains, refreshing brands and driving revenue through creative marketing campaigns.
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