As the old saying goes: “There’s a fine line between love and hate.” The same could be said for your revenue strategy and its ability to positively impact your hotel’s profits. Play your cards strategically and insightfully, and your hotel reaps rich and profitable rewards. But take a turn toward lackadaisical revenue approaches, and you just might experience the heartbreak of disappointing KPIs and mediocre market performance.
Are you falling victim to some of the classic mistakes many hotels make with their revenue strategy? Here are 10 ways your hotel could be losing out on revenue:
#1: Not understanding your channel costs
Not accounting for acquisition costs means you aren’t fully realizing the expected windfall of all of your offers – which directly impacts the net revenue results from new or existing distribution channels. To accurately track costs, effective best practices and standards should be structured around the proper use of business coding and data collection. This helps ensure your available data is accurate and suitable for digging into new channel performance opportunities.
#2: Not measuring the impacts of your pricing strategy
If you’re adjusting your rate, do you understand and measure the impact of that pricing change? If you’re lowering your rate, will your discounted offer produce enough incremental reservations to exceed the revenue expectations of the previous or non-discounted rate? For example, would you rather accept 10 reservations at a $500 rate or 12 at a $400 rate? If you lower your rate to $400, there needs to be demand for a minimum of 13 reservations to exceed the revenue potential of the previous offer. Revenue technology and booking reports are great tools to help you measure these types of pricing impacts.
#3: Not understanding what market to put your marketing dollars in
Travel intent data uses search and booking data from third-party booking sites and OTAs to help quantify the demand your hotel can expect for future dates. This type of predictive demand intelligence provides you with human-focused insights that allow you to market strategically with specific ad placements and personalized offers – in your most profitable distribution channels.