George Dfouni explains the most effective ways a hotel operator can increase revenue.
Hotel revenue management is an important part of this business industry, as adjusting the prices according to the guest pattern is the core part of this business because optimal price rates mean more customers which will cause a raging increase in the business profits.
But the thing that makes revenue plan more successful is to have full information, good planning tips but more importantly, the revenue strategies play the main part because it makes you more clear-minded and concentrated. Following are the best and profitable hotel revenue management strategies that can make your hotel business shine. Following are some of the best and profitable hotel revenue management strategies that you can adopt for effective outcomes for the hotel.
What is exactly is Hotel Revenue Management?
Revenue management is a very important subject in hotel management as it acts as a profitable strategy for the economic status of the hotel. The whole revenue management discussion can be shortly summarized by this famous quote that is “All a revenue manager needs to accomplish is to sell the right room to the right person at the right time and price through the most suitable platform”.
In even simpler words, revenue management is a procedure through which you introduce the best and preferable price rates according to the requirements of the customers so that they can make the most sales and profits. The best way to put together your revenue strategy is by going through the data analytics, customer performance, older price distribution so that the hotel management team can come with better prices and ideas which will help you maximize the revenue and hotel business.
Also, the revenue strategy does not depend upon one kind of customer, you have to plan it by keeping that a larger community with different values will approach your hotel and you have to make them convince of the revenue strategy.
Hotel Revenue Management Strategies
Here are the best hotel revenue management strategies that can benefit you for the best and optimal results and statistics:
· Proper communication means:
Communication is essential when you are in a business where the core part is people reviews and demands so, having a messaging box is very necessary that should be open all the time so that people can engage with you without any kind of distribution or interruption. This revenue strategy helps the customer to get every kind of detail on the new and updated strategy so that they can experience it.
· Targeting strategy:
Targeting the audience is a very well-known revenue strategy as it helps you to get to know what type of guests you are going to have and to deal with so that you can develop the revenue management plan according to guest requirements so that you can have a better result in sells and profits of the hotel business.
· Do direct bookings
The direct booking strategy is one of the successful ones as it assists you to deal with the customer’s hand to hand rather than a third party like an OTG platform because they keep a commission and also it not let you stand alone as you always have to be dependent. So, when the customer does direct bookings via your hotel website, it helps you with better profits and response.
· Programs to increase repeat guest arrivals:
Loyalty programs are a thing that hotel owners take very lightly, but it can be a very good reason for a successful revenue management plan as it enables you to make gestures for the guests like customizing gifts, sales, discounts, special entrance drinks, etc. it makes the guest happy and satisfied with your hotel services.
This strategy makes the old guest and also the new ones come again and again after seeing such good and sentimental loyalty programs.
· Active hotel websites:
Nowadays, people are more active on their smartphones rather than checking paper or even tv so, it is best for the hotel to have an online website where they can showcase their hotel, the revenue plan, and the services they provide so that people can interact with them. This hotel management strategic plan helps you to engage with the customers globally and locally which will increase the hotel revenue even more and the customers also have every information about your hotel which enables them to trust you and choose your hotel.
· Develop an online reputation:
Having an online reputation is very significant nowadays, as we all know how today’s world work today, we do everything online, likewise, most people now do the online booking as it is convenient and they can get all the information regarding the hotel services and offers through reviews and websites.
So, having a good online reputation is very important, make your old customers give reviews and ratings about their experience, etc. so that the new customer can make their decision easily which will affect the success of the hotel revenue management plan as well.
· Work in cooperation with other departments:
It is important to involve other departments such as sales and marketing, art team, etc. so that everyone can corporate in developing the hotel revenue so that it can be suitable to all and the whole hotel staff teams can be agreed on the revenue. This strategy helps you to gather more ideas from the hotel staff through various perspectives which can be helpful throughout the revenue procedure.
· Do a calendar checkout:
Do a calendar checkout means to know about all the events and festivals that are coming, also that events related to other areas and countries so that you can develop the revenue strategy revolving around those specific dates so that you can able to attract more travelers and visitors that time around.
· Pay attention to reviews:
Reviews are very important for a good hotel image and the customer usually lookout for the reviews before doing bookings as they want to know what other people have to say about your hotel management services so it is important to get reviews from your previous customers and also pay more attention towards them which can result in more hotel room sells and optimized revenue.
· Include local business partnerships:
This is also a very unnoticeable strategic plan but it is very effective in having a more enhanced revenue management plan as to when you include or do partnerships with local businesses like tour guides or amusement park owners, you can offer discounts on the tickets which can get the attention from the customers which will directly have a positive impact on the revenue plan.
· Do SEO optimization:
Search engine optimization plays an important role in almost everything nowadays, because people are more aware of what is happening online rather than physical and SEO is a technique that is making the work easy for brands and businesses to stand out so that people can approach them and use their services.
So, your online hotel website must be fully SEO optimized which will result in more traffic and customers to reach your revenue strategy and help you to increase the hotel earnings.
· Competitor Analysis:
It is very important to do a competitor rate analysis as it helps you to check what other hotel owners are offering so that you can develop such rates that are attracting the right customers and succeed in earning the best revenue. You can update the rates chart by what the competitors are offering which will create a clear image of what to add and what to avoid in your hotel revenue management plan.
· Understand the value market:
The most important thing about revenue management strategy is the price value because it is all the matters. After all, the customer is only going to judge your whole hotel service depending upon the price you offer. So, be good with knowing the value market and also to develop in regards of that so that you can offer the best of the best to your customers.
Why Revenue Management is Significant in the Hotel Industry?
Revenue management sets the core for profitable business plan for the hotel which means it is very important for the hospitality industry to have and to acquire as;
- Through revenue management, you can manage the selling costs as in, you can calculate them according to the demand and related factors like season time, the number of travelers, etc. and can lower them when the demand is low. That is how the hotel resources and staff will be optimal used when there is the proper need not when the things are not required.
- The best thing about this specific management scheme is that it helps the hotel owner and team to understand what their customer demands and wants rather than just anticipating and thinking on their own. The customers appreciate the hotel service, even more, when they know that they take their requirements seriously and put them to actual work.
- Revenue management enhances the hotel branding, it not only assists you to get the best pricing rates for the property but also makes sure that the maximum RevPAR for the hotel.
- When you have revenue management that is formulated by going through all the details very preciously like previous data analysis, customer preferences and reviews, season time, etc. You can have a revenue plan that will not help you with the best business but also win against the competitors which are important when you are in such an industry where the competition is always at high stake.
- You can also extend your business when you know that the revenue strategy is going well and the profits are high.
George Dfouni’s Tips to Enhance your Hotel Revenue Management Strategy:
Here are some tips that will help you to optimize the hotel revenue management strategy for effective and efficient outcomes:
· Accumulate the right data:
Data collection is the most important step in developing revenue management as it helps you to calculate the price rates and strategic plans but the common mistake that most hotel owners do is collecting more information than needed, so they end up with a messed-up revenue plan. So, it is best to focus on the right data that will assist you to have the right revenue and right demands.
· Do mapping and location research:
When you develop a revenue strategy, studying mapping and forecasting is a need as it further helps you to have a perfect plan that will attract the desired guests and customers for your hotel. It also gives you an idea about the traveler’s perspective from where they are coming and what they want where they are going to stay, so it depends upon the information regarding the locations and mapping.
· Embrace pricing strategies:
Pricing is the major part of revenue so having a proper strategy about it is very much required. So, try to embrace the pricing strategies as much as you can and formulate such strategies that are easy to manage according to what the customer wants and has to offer.
· Focus on the distributing channels:
Having a good revenue strategy is not enough until people are not well aware of it and it is obvious if they do not know about it, then how they will reach out to you. So, focus on the disturbing channels like having a proper hotel website and various channels like online accounts on various sites so that people can know what you are offering and how they can reach you.
· Learning about the market:
You cannot develop a revenue management plan unless you study the market so that you can know what the rates that are going around are and how the customers are reacting to it. So, a revenue plan with potential can only be formulated after doing full homework about what is going in the market at present.
The Bottom Line
Hotel revenue management is a new technique or strategy that is being very profitable for the hotel industry which is proven by the higher statistic rates and improved selling profits. With this evolving world, the booking patterns and guest demands are changing every moment, so strong and valuable revenue management will make your hotel business more enhanced and successful.
This management strategy is not anymore just a basic plan for the hotel but now it is imperative and crucial to have for optimum financial benefits and improved hotel reputation. This hospitality industry is getting bigger day by day so, having revenue management will surely make you stand out in the crowd.