Top 10 Tips For Successful Hotel Revenue Management
Independent and boutique hotels have the opportunity to capitalise on traveller appetite for unique experiences. Big hotel chains simply can’t compete on this front. And your hotel is also able to completely differentiate itself from other independent hotels. Coupling this with the implementation of hotel revenue management best practices gives your hotel ample opportunity. Read our 10 hotel revenue management tips here to drive the success of your organisation.
1. Focus on Value
In a price-sensitivity sector, value and perceived value are king. It is important to differentiate the two: one, you need to provide the value to your guests that you say you will; and two, that value must be clear to potential guests when considering which hotel to book. It doesn’t mean to undercut your competition at all. What a focus on value means is what the guest gets - where is the bang for their buck?
You can bring value through outstanding customer service, food and beverage packages, free parking and so forth. Value-added extras that are unique to your hotel go a long way to making guest experience positive and memorable. This is the kind of value that leads to repeat stays and recommendations.
2. Get your Distribution Channels Right
As an independent hotel, you may not have the marketing budget that many chain hotels have. For this reason, it is essential that you choose the distribution channels that will boost your revenue management strategy best. But how do you decide which channel is best for you?
A number of factors are important. These include ease of channel management; their potential; the cost involved; marketing opportunity the channel provides; and not least, the technology it uses and its compatibility with your own property management system.
3. Offer Direct Booking Incentives
Booking through external partners such as online travel agents is important, but direct bookings are the most desirable method of guest reservations. As a hotel revenue manager, you can implement measures to increase them in number.
Direct bookings help create customer loyalty. You can encourage direct bookings by offering value-added incentives. These can include anything, from food and beverage discounts, reservation price reductions, discounts on future stays and so forth. The goal is to divert guests away from using hotel comparison sites, where they are more likely to choose a competitor. You can also promote a loyalty programme and drive the likelihood that guests recommend your hotel.
4. Create a Culture of Perpetual Revenue Management Improvement
A culture of revenue management improvement creates focus and negates the threat of complacency. If a focus on hotel revenue management is pervasive through your organisation, it leads to awareness among all employees of its importance. This in turn leads to more thoughtful business decisions and behaviour, which ultimately help drive revenue.
5. Maintain Organised Records of Key Data
Data is key to the evolution of your revenue management efforts. But the data must be pertinent. Some hotels collect a lot of extraneous data. This impedes rather than helps business decisions. Focus your hotel on the most essential - on quality over quantity, and on how it will be recorded and used.
Not only will it be easier to store and interpret the data, but it will be faster and it will lead to more relevant insights. These insights will drive your entire revenue management approach.
6. Always Keep up with Changing Consumer Trends
Your hotel must never lose sight of the importance of staying up to date with changing customer behaviour. This also plays an important role in supporting business decisions. You can do this through various means. For instance, a periodic review of the booking process will tell you if the channels through which customers make reservations change in any way, and of customer demographic trend movements and so forth.
Monitor what guests say about your hotel online, on social media, blogs and hotel review websites. You must keep up with and respond to all online activity concerning your hotel, and involve the revenue management team. Knowing what customers are saying at any given time gives the revenue manager vital information that can assist decisions.
7. Use Automation to Support, Not Replace
Automation has become omnipresent in modern revenue management. But, it is important to not fall into the trap of thinking that everything can be automated. It should be used to assist effective revenue management, which involves many complex decision-making processes that require human professionals.
Automation is an excellent solution, particularly for time-consuming tasks such as data entry and reporting, but it is human capital that separates the best revenue management systems from the mediocre.
8. Prioritise Website and Mobile Experience
Quite simply, too many hotel websites are out of date or neglected. Considering the vast majority of guests make reservations online, it is paramount to have an updated, optimised website for computer, mobile and tablet. A professional website also requires periodic updates, taking into account technology updates, changing customer behaviour, design trends and security.
An optimised website assists your search results. But you can also use it as a foundation for online marketing tactics including advertising via Google and social media as well as organic growth through your blog and social media accounts.
9. Always Keep ROI in Mind
ROI should be front and centre of a revenue management strategy. It underpins every choice made and helps the revenue manager evaluate the merit and potential benefit to the hotel of pursuing a given decision.
With efficient use of KPI data, a focus on ROI also provides hotel management with greater insights during periodic hotel performance reviews. These insights shape the business direction of the hotel.
10. Achieve Accurate Demand Forecasting and Mapping
Forecasting hotel demand is essential to revenue management. Accurate forecasting informs the hotel of projected costs and needs, as well as expected revenues. But your hotel will also benefit from knowing where your demand originates. This is known as mapping
Through mapping, you can spot trends that tell you if demand is growing or declining from specific customer demographics - age, place of origin and so forth. Mapping can also reveal other vital information, including changes to type of reservation, average customer spend per age group and so forth. This can then support marketing and sales initiatives to increase future revenues.
To implement these tips for successful hotel management, we recommend a comprehensive and large-scale review of your operations as a starting point. With these best practice tips, you will be well placed to increase efficiency and revenue across your hotel.