So here we are on the cusp of another tourism season in Maine. Maine hospitality businesses are acknowledging that there will be a summer labor shortage and Maine Senators are urging the government to raise the limit on foreign workers. This is not a new story. The combination of limited work visas and an aging population is a constant challenge for all industry in Maine. Those in the hospitality industry will once again scramble to make things work this summer. Managers will stretch the labor force to meet demand, just as they have the last few years. This constant struggle reminded me of the famous quote about insanity. The quote is “insanity is doing the same thing over and over again and expecting different results.” The hospitality business in Maine needs to stop doing the same thing over and over again and have a plan. The Maine Senators are onboard and are doing their part to urge the administration to allow more visas. In addition to that, there is a movement in the Maine University System to tailor classes to what Maine employers need. The Maine University system also actively recruits students from all over the country and world. I am impressed with the University of Maine’s Flagship Match Program to encourage out of state kids to attend school in Maine. It is these initiatives that will help bring fresh talent to our aging State. Maine is definitely headed in a positive direction, but it will be slow. So until the State of Maine creates more incentive programs and passes more legislation, employers are going to have to work smarter to stay ahead. Last year at this time, I wrote a blog post on the BDN titled: Maine will survive the labor shortage 5 tips to succeed. I received thousands of views of that post and several emails about my suggestions. My suggestions ranged from looking outside of Maine for employees to being creative with scheduling. This year in addition to those ideas, I was thinking there must be ways to work smarter not harder. There have been advances in property management systems and there are ways to predict income. If a property owner starts from the premise of understanding how much revenue they need for the year, their management decisions will be easier to make. There may be a point where it is no longer feasible for your business to be open during the season. If you maximize the times that you have sufficient staff and resources, you might actually be able to close earlier if you have to. Of course, closing early is not ideal, but if you hit your revenue goal, it will be an easier decision. With the understanding of revenue management, a property can work smarter not harder. The property owner needs to start with a clear picture of the revenue they will need for all expenses. This clear picture will help mediate stress around the employee shortage. Here are my solutions for Innkeepers and hosts for the 2018 Maine Tourism Season.
- Have a Revenue strategy. A revenue strategy will create goals and clear pathways to those goals. A written strategy will uncover how to optimize profit from your projected demand. A strategy makes management decisions easier.
- Control Expenses. Understand all marketing channels available for your property. Leave no rock unturned. The more you understand the marketing channels, the better you can make a decision that affects your bottom line. Some channels have lower commission rates. In addition to different commissions, OTA’s (Online Travel Agents) market to different types of travelers. Know your guest and you will know what OTA to market with. It is ok to pay commissions, it is not alright to pay fees in addition to the commissions. Know your property management systems fees and connections. Controlling expenses is one of the keys to having a successful seasonal business.
- Create a calendar – This is probably something most properties already do but don’t realize how important it is in determining pricing for room rates. In mid-coast Maine, the Lobster Festival in Rockland brings thousands of tourists. Rooms are in high demand and it is an optimal time to raise your rates. Having a clear picture of what draws people to town will help you price accordingly. Since most events are annual, it is easy to price rooms a year out. Don’t be caught selling a prime time room at a low season rate, create your calendar at least 1 year in advance.
- Dynamic Pricing – Travelers are constantly making and changing their itineraries. You need to stay in front of them with the best price. It is encouraged to check and modify your pricing every day. There are promotions you can do to sell last-minute rooms. Every day a room goes unsold, you miss an opportunity to make money. For last minute pricing, have a good understanding of what your bottom line is and be competitive. Remember the ABC rule of sales, Always Be Closing!
- Less is More – If you are a Bed and Breakfast, focus on the Bed and the Breakfast. Make sure the room is spotless and the breakfast is delicious. You can consider offering add-ons to the rooms like wine and food, but in addition to possible ordinance restrictions, pricey licensing, and stock management, you are creating more work for yourself and your employees. If your organization is already maxed out, stay focused in your core business. If a guest’s expectations are met, you will see good reviews. Good reviews will bring more business.
Have a strategy this season. Having fewer employees should not make or break your organization, be realistic about the challenges in front of you and adjust. If the foreign workers are here between May and September, work really hard to fill your property accordingly and plan to slowly close it down early. You might have to close a few rooms to keep up with quality of service. If you have to close rooms, you might be able to charge more for the rooms you do have open. Shutting down rooms and closing the door early might be a reality for you, but if you maximize prime times, you should meet your revenue goals. A successful strategy will help you ride the employee shortage until legislation and more youth are convinced to come to Maine. Create a strategy and be focused on obtaining your goals for the season.