Independent operators are in complete control of their rates and inventory. This is a double-edged sword because the right decisions make all the difference. With this in mind, we’ve compiled a list of revenue management hacks to ensure your hotel’s success. To get the full list of revenue management hacks for independents, CLICK HERE or visit https://lodgiq.net/rm-hacks-guide.
#1: Guests use many booking channels to reserve hotel rooms. Some are very price-conscious, and some are more discerning. Bookings from a direct channel increase RevPAR, remaining an effective distribution channel.
Hack: A multi-channel strategy that aligns with your revenue management best practices is critical to ensure higher revenues. This is where your RMS becomes an invaluable tool. Focusing on the most profitable channels is critical, and decreasing spending on OTA commissions allows for maximizing revenue. Try promoting direct bookings by offering comps like free Wi-Fi, breakfast, or discount.
#2: “Guest Value” to a hotel means so much more than just room revenue.
Hack: Hoteliers need to understand the total value of the guest and its impact on their business. This will include room revenue and upsells as well as F&B revenue, SPA revenue, and pre/during and post purchases directly attributed to a specific guest.
#3: Accurately forecasting potential room demand is nearly impossible if hoteliers continually look at data as a whole.
Hack: Segmenting guest data into relevant purchase groups allows hoteliers to identify the varying acquisition costs, behaviors, and levels of profitability associated with different guest profiles. Using this information, hotels can develop an appropriate strategy to balance these segments and create the optimal revenue ecosystem for their hotel.
#4: A hotel’s segmentation strategy must be based on various data points, such as Transient vs. Group customers, booking channel behavior, and characteristics of market segments.
Hack: To ensure your segmentation strategy is effective, you should employ a sustainable segmentation process. This 5-step process requires you to set objectives, analyze performance, review the distribution strategy, anticipate changes and continuously update the strategy (identify problem areas, etc.).
#5: Guests today are hyper-focused on value and increased personalization.
Hack: Value-added extras unique to your hotel and advertised through booking channels can go a long way in creating a memorable guest experience. Consider using guest personalization technology and cutting-edge revenue management tech powered by AI and machine learning to develop revenue-maximizing food and beverage packages, free parking, and Wi-Fi.
#6: If your hotel doesn’t remain ahead of industry trends and guest preferences, you risk losing out on potential guests within a highly competitive hospitality landscape.
Hack: Utilize online channels such as social media, blogs, hotel review websites, and OTAs to monitor what guests say about your hotel online. Frequently engage with this online activity to establish a brand presence, better understand industry norms, and provide your revenue management team with vital information to assist future decisions.
#7: An increasing number of guests are expressing a need for complete mobile functionality within their booking process and during their stay and self-service solutions for increased efficiency.
Hack: Ensure your website and primary booking channels are optimized for computer, mobile, and tablet with frequent updates and consideration for add-ons, requests, etc., or invest in a custom app for your hotel. The three main elements of a mobile responsive website are enhanced UX, a shorter reservation form with only required fields, and a secure mobile payment system. On hotel grounds, utilize cloud-based, mobile-centric PMS technology and self-service kiosks to make the check-in, check-out, and concierge process more efficient and mobile-friendly.
#8: For any night a hotel room is not booked, its value is lost. Even if the goal is higher ADR vs. 100% occupancy, hoteliers must understand future demand to determine what prices various customers will be willing to pay on a given night.
Hack: Your hotel’s forecasting strategy should utilize four types of forecasts: demand, revenue, strategic and operational. The demand forecast informs the other three types. It is derived from daily booking data collected over a year or more using revenue management software while monitoring events and researching the competition.
#9: AI Technology has entered the hospitality arena and is here to stay. However, it’s not just about enhancing the guest experience.
Hack: Whether it is to create a unique experience, drive higher room types, offer promotions or additional up-sells at check-in, technology can now drive engagement and drive up-sells. AI can take on the responsibility of mundane and necessary tasks, with chatbots and concierge bots already showing revenue potential through increased productivity and conversions.
#10: Hotels in many high-demand markets are hitting the ceiling in room rates.
Hack: To generate revenue growth, hotels should stop overselling the base room category and look at what area in a room can be monetized. To do this, you must understand what guests value and are willing to pay for. Secondly, meeting and event spaces are an area that most hotels see as underperforming. Many hotels can contribute 40% to 60% of their total profits.
To get the full list of revenue management hacks for independents, CLICK HERE or visit https://lodgiq.net/rm-hacks-guide.
LodgIQ™ provides advanced travel industry revenue optimization technologies. Its breakthrough next-generation revenue optimization platforms, LodgIQ RM were developed by seasoned revenue management executives and Silicon Valley technologists. Currently working with over 550 hotels LodgIQ’s products combine sophisticated machine learning with an intuitive and powerful user interface delivering advanced recommendations and actionable analytics. LodgIQ is headquartered in Silicon Valley, with offices in New York City, Phoenix, and Bangalore.