-
5 Smart Strategies to Maximize Your Hotel Revenue – By Rikki Cavanagh – Image Credit Unsplash+
The high season is nearly in full swing for a lot of travel destinations! Here are five things that should help you to increase revenue for your hotel throughout this high season. If you aren’t already doing these things, start now!
- Embrace Dynamic Pricing
Gone are the days of rack rates and fixed prices. Pricing grids for high season, low season, weekday and weekend rates are a thing of the past. To be competitive and increase your revenue in today’s dynamic marketplace, you need to be dynamic as well. Pricing should fluctuate with demand (throwback to the grids), but also on supply. As you build your base, your price should increase accordingly, and ideally this should be done for the whole market.
-
Extend Your Dynamic Pricing To Your Room Types
I remember memorizing room type differentials. King bed? $20. Two queens? $30. Corner room? $70. This doesn’t adapt to the clientele at their time of booking. A room with two queens on should be priced differently on a weekday versus a weekend. When your pricing increases for the high season, your differentials should follow the same trend as willingness to pay grows for those in-demand dates.
-
Use Restrictions Mindfully
It’s a great idea to protect your shoulder dates with a minimum stay restriction on your highest demand date. The most common example of this is having a minimum 2 night stay restriction on a Saturday night. However, it is important to be mindful of your booking window and release these restrictions as the date approaches. Having a 2-night minimum on your Saturday that is still in place on the day of arrival will prevent you from selling out that day because, as we all know, very few people are looking to stay on Sunday. The difference between and arrival-based or a stay-through restriction can also impact your availability on shoulder dates and ultimately your revenue could be affected as a result.
-
Diversify Your Channels, But Not Always
Putting all your eggs in one basket is not a good strategy for increasing revenue year-round. It is important to offer availability and pricing on multiple channels to ensure you are catching any demand that exists for your hotel on whatever channel the guests are shopping. But when demand is high and you don’t need as much business from third parties, focusing on your direct channels with a more attractive offer is a good way to increase profitability. Understand that there is a cost to all clients, whether it be commission or marketing. A well-thought out distribution strategy will inherently result in higher profits.
-
Keep Up With The Competition
Do you have an outdated cancellation policy in place that may be preventing guests from booking at your hotel? Are they including breakfast? How much is your parking charge compared to theirs? Is your check in time too late or your check out time too early? It’s important to watch your competition’s rate strategy, but it’s also imperative to ensure what surrounds your price is an attractive offer. We often look at larger amenities like gyms, pools, and restaurants. As a traveler, sometimes we just need a few extra hours in the morning before our flight.
Bonus: Simplify Your Life With A Revenue Management System
Many of these practices can be made simple by utilizing a revenue management software to dynamically optimize rates for the entire property. This is done directly in your PMS to ensure rates are consistently competitive and without constant observation from your managers.
Rikki Cavanagh is the Director of Business Development at Rate Yield. Connect with Rikki on LinkedIn.
About Rate Yield
Rate Yield was created in 2019 by seasoned Revenue Management consultants with over 30 years of experience within the field. Rate Yield RMS was designed to adapt to small hotels, inns, and resorts as well as large hotels in city centers. With settings and thresholds that can be modified against a hotel’s unique market trends, Rate Yield makes it more accessible than ever to implement AI in revenue management strategies. With real-time insights, agile strategy development, modules for budgets and forecasts, as well as a tool for displacement analyses, Rate Yield provides a complete software that will help your hotel to yield more revenue, period! To learn more, visit us at www.rateyield.com
