Wondering how your hotel business can survive the ebbs and downs of fluctuating customer demand? How do you ensure that you stay ahead of the profit curve?
The answers to these questions lie with — revenue management.
What exactly is Revenue Management in the Hospitality Industry?
Revenue management for hotels involves predicting customer demand and then streamlining prices to increase profit margins while boosting sales. It’s all about selling at the correct price, at the correct time to the correct customer. When handled rightly, revenue management is an excellent strategy to help hotels boos their profit margins.
Here, we list 9 Revenue Management Strategies that you can use to increase your revenue.
- Provide Incentives for Direct Bookings
While it’s essential to optimize your listings on all distribution channels, you need to ensure that the majority of customers’ book directly on your website. When a customer books directly on your site, you don’t have to pay commission to third-party OTAs, thereby increasing revenue.
A way to boost direct bookings is to offer exclusive incentives to customers who book directly with you like freebies, room upgrades, loyalty points and more.
2. Modernize F&B Offerings — Go Local and Sustainable
Are your in-house restaurants serving the same ol’ fare, available elsewhere? Food tastes are changing fast, and travellers are seeking out local delicacies, exotic flavours, healthy eats, and sustainably sourced foods.
You can maximize in-hotel spends by providing customers with unique F&B offerings. Make use of seasonal and local ingredients to provide customers with a culinary treat that is unavailable elsewhere.
3. Form profitable partnerships with unique local businesses
Don’t have an in-house laundry but customers expect laundry services? Instead of setting up an expensive laundry unit in your property, you can partner with local dry cleaners and laundry services at an affordable price.
Similarly, try to partner with local businesses to increase your revenues, with the help of lucrative partnerships.
4. Invest in the right property Management Software
Modern property management systems have plenty of features like automating room availability, optimising room rates, offering discounts for large group bookings, event bookings and more. Look for cloud-based property management software, so you don’t have to spend on additional IT infrastructure.
5. Segment your Customer Base
To sell the right room to the right customer at the right price requires a clear understanding of your customer base. To do this, you have to identify the different types of customers — business, leisure, budget, vacationers and understand how they book rooms and how much they are willing to pay.
Once you have segmented your customer base, you can then optimize the right prices for different segments.
6. Optimize rates for different categories of rooms
Rooms make up the major chunk of your profits. If you are a boutique hotel, then try to maximize the revenues from specialty rooms. For instance, you could try to upsell a corner room with extra space to families.
To optimise room rates, you need to have a clear understanding of your customer needs as well as your room inventory and match it for the best benefits.
7. Embrace SEO and social media marketing
Being ranked high on popular search engines is one of the biggest opportunities to boost occupancy rates and increase revenues. You need to build a robust SEO strategy for your hotel. Start by optimizing your website design, make it mobile friendly and then implement on-page and off-SEO techniques. Hire an SEO team with experience in the hospitality industry to boost your SEO rankings.
8. Provide Customers with Unique Experiences
There’s no doubt that the hotel market today is saturated with players in all price ranges. How do you ensure that you stand out from the rest? The answer lies in offering unique experiences to customers that are unavailable elsewhere.
This can be something as simple as conducting weekend handicraft sessions in the lobby with a local artist and so on.
9. Up Your Technology Game
Technology is the biggest differentiator for travellers today. Try to incorporate technology in all aspects of your hotel, so that customers have a highly convenient and comfortable stay. Smart TVs that allow hotel guests to stream content from their devices, waterproof Bluetooth speakers in the shower, and keyless digital entry to rooms — are some ways you can improve your technology game.
Simply put, revenue management for hotels is all about selling the right hotel room to the right customer at the right time for the right price via the right channel. Use the nine strategies listed above to maximize revenue and boost growth. If you in short of cash flow to implement these strategies, worry not. You can quickly avail exclusive business loans for hotels in India from India’s most preferred digital lender, Indifi.