We get it, being a revenue manager is a tough job and it’s not getting easier. But we know you’re passionate about it. So are we. LodgIQ is a home to many former revenue managers, and we’ve challenged ourselves to find new ways to make your job easier, more productive, and more profitable for your owners.
Based on our collective decades of expertise, here are some tips to boost your top-line revenues today!
1 – Re-evaluate your rates and positioning
There are different price comparisons every revenue manager should be regularly undertaking. Two are: A price/value comparison, and a comparison between your room types.
First, the price/value comparison. This assessment is crucial because it evaluates your requested price against other important variables, such as property review scores on TripAdvisor (and other review sites), prices and amenities at other properties within your comp set and the hotel’s destination as a whole. All these variables are taken into consideration by consumers evaluating your property against the competition, so you must be sure your property’s price and value are in concert.
Second, the comparison between your various room types. Does each of your differing room rates stand up to the price/value comparison? More importantly, do your product offerings and respective prices compare with similar room types operated by your competition? What insights can you derive from seasonality, day of week, lead time, and package inclusions? There is money to be made if you find the right value propositions for your guests.
2 – Keep track of past rates for different days of the week, and different times of year (both for your own property and your comp set)
When examining your room rates, it’s important to keep track of how you and your comp set priced rooms for different days of the week. Then use this number as a benchmark for future pricing decisions. Specific things to notice include whether you and/or your comp set are within, or outside, normal price range, and which rates typically sell more frequently (and how far in advance of stay date that typically happens). Considering how many rate changes you do on any given day, this data is invaluable for evaluating ongoing pricing decisions and overall strategy.
3 – Involve other departments to discover your property’s USPs
An important part of pricing (and smart marketing) your rooms is fully understanding your property’s unique selling propositions (USPs). According to Wikipedia, a USP is “a factor that a business has that makes it different and or better than others out there.” While hotels might not have one USP, there are always multiple value attributes that make you stand out such as location, offered amenities, views, TripAdvisor rating (or being number 1), or other features.
Talk openly to other departments to uncover why previous guests chose to stay with you, and what they liked/disliked about the experience. We recommend talking to your front office manager, or even shift supervisors. They interact with guests daily, and will give you unvarnished information long before similar insight appears on hotel review sites.
4 – Evaluate your individual distribution channels as part of your initial strategic planning
One of the common suggestions we make to revenue managers is invest the necessary time in developing a long-term revenue management strategy, then continuing to use the plan to evaluate your ongoing progress. A strong strategy in place ensures everyday decisions are moving you towards the goals that you would like to achieve. Plus, it reveals what changes you need to make to succeed.
As part of your strategy, you must also evaluate your distribution channels, then develop specific strategies for how to increase bookings and revenues through each – not in isolation, but as a mix (commonly known as business mix optimization strategy).
All channels have very different benefits such as acquisition costs and specific target markets / customers, so it’s important to ensure your distribution channels in unity help accomplish your revenue goals over time.
5 – Leverage technology to ensure you’re taking all available data into consideration when setting your room rates
You’ll hear us say it again and again: technology is integral for ensuring your property is offering the right rate, at the right time, through the right channel.
We’re in a world of constant data overload, with vast amounts created daily. That can lead to data paralysis as you become overwhelmed with the inability to make sense of it all. And that leads to setting improper rates.
Fortunately, sophisticated RMS technology powered with machine learning capabilities can do the work for you. This technology collects seemingly unrelated market data, quickly analyzes it all, then provides up-to-the moment pricing recommendations as market conditions change, all in real time.
We hope our experiences can help you a bit. Now get out there and increase that top-line revenue today!
We’d love to help you learn more about how technology can help you increase your top-line revenues. Read our recent blog post about the benefits of machine learning on optimizing your pricing.
Written by: Team LodgIQ