Hotel Revenue Management Strategies
Just when you think you have mastered hotel revenue management, anything can happen to turn your positive results completely around. Starting from scratch with new tactics is not easy, but if you put aside your frustration, looking at hotel revenue management in a new light can be the perfect way to re-evaluate your needs as they stand now. And, it is a great way to differentiate yourself from today’s competition.
Any time you take a closer look at your hotel revenue management strategies, and processes, you will need to keep your focus on what works best for you. Whether you manage your revenue internally, outsource it or rely on revenue management software, keep in mind that hotel revenue management will be a constantly evolving process. There are ever-changing elements involved, including market conditions, customer behavior trends, and technological advances. Constant and consistent learning is one key goal that a revenue manager should always keep in mind.
Smart Hotel Revenue Management
The hotel revenue management process includes using performance data, analytics, and other support information to continually anticipate customer demand. From this standpoint, you can optimize availability, pricing, and distribution. Throughout the process, revenue managers must work toward maximizing revenue through all channels and improving overall financial results.
Today, hotel revenue managers need to be more agile and resilient than ever. “Be prepared for anything’ should be your new motto. With each decision you make, focus on placing risk reduction ahead of everything.
There are several ways that you can rethink your hotel revenue management strategy today, and your business, with the goal of increased profit in mind.
Optimize revenue management technology. RMS (revenue management systems) that depend heavily on historical data may not always work for you, therefore, your aim should be to periodically reevaluate your revenue management technology and ensure you are utilizing the right data sources. RMS options that can help you optimize your company’s financial results across all channels will most definitely be able to:
- Forecast accurately
- Price competitively
- Analyze confidently
- Help you make clear decisions instead of mere recommendations
Today’s revenue managers have the important goal of setting prices, increasing RevPAR, and optimizing the hotel’s long-term financial strategy. This is a significant task, so using the correct revenue management techniques and technology will help you avoid mistakes and see more success.
Implement upselling strategies. Ideally, your RevPAR will be trending upwards as will your bottom line. But, even if it has been trending downward and you need to increase RevPAR, you should keep one eye on profit optimization through relatively simple techniques like upselling. Upselling is a positive revenue management tactic that you can infuse into every aspect of your hotel, across all teams. Supported by top-of-the-funnel data and innovative tech tools, upselling is a great way to navigate during uncertain times and to prepare for recovery in low market periods.
Embrace upselling, and other high-yield tactics, as you shift part of your revenue management strategy to a long-term approach that will get you through slow months. You can implement the following steps today:
Examine source market data. Use technology that helps you pinpoint where your future guests will come from and then target these guests with relevant offers.
Evaluate your business segments. Stay on top of recent trends in your business and market. Embrace intelligent technology tools to anticipate how things will likely develop in the upcoming months.
Optimize distribution. Take stock of your distribution strategy to find more ways to import. Focus on more direct bookings and more strategic partners.
Take advantage of real-time pricing optimization. Third-party software tools like ROOMDEX Upgrade Optimizer works with your PMS and RMS to let you make the most of even the slightest demand changes and to react to market anomalies with smart, real-time rate optimizations.
Do not rate dump. As tempting as it may be to drop rates to meet demand, use caution with any rate dump strategy. Even if you can recover costs now, think about how challenging it could be to raise your prices in the future. Instead, offer valuable add-ons and upgrades like room type upsell options or packages.
Now is the perfect time to re-evaluate your approach to hotel revenue management and to shift to a holistic management model that will help you stay competitive even during hard times.