Every hotelier and host faces the question of how to increase revenue and profit without raising prices or overspending.
NB: This is an article from Cloudbeds, one of our Expert Partners
When immersed in day-to-day operations, it can be hard to see the big picture, and getting the right answers can be complex. While there are many ways to increase your hotel revenue depending on your property’s needs, here are 15+ tactics to get you started.
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1. Build a road map
Before you can start your revenue strategy, you need to know where your business currently stands: from your bottom line and revenue streams to marketing efforts and online review scores. Knowing the fixed cost of an available room is essential to calculate how to set the right rates plans, dates for promotions and group offers, and whether to invest time and effort on specific OTA channels. With this information, you can create an accurate and personalized road map that will help guide your sales strategy in the right direction.
Your road map doesn’t have to be formal, but it should accurately reflect your business’s current status in terms of finances, reservations, revenue, and costs so that you can plan appropriate goals for the future. Additionally, your road map or hotel business plan will need to be reviewed and revised every year to achieve optimal results.
2. Segment your target market
A key component of hotel marketing is creating guest personas so you can tailor your marketing efforts accordingly. You need to understand who your guests are, why they’re choosing to book with you, and their main reason for travel so you can understand how to direct your marketing efforts. The answers to these questions will help you develop guest segments and provide powerful data to improve your marketing strategy and sales activity.
To illustrate, you might notice that your accommodation mainly attracts business travelers between the ages of 35 and 45 and that these guests choose to stay at your property because of your proximity to a convention center that hosts many corporate events. Knowing this, you can run unique marketing campaigns and paid ads that promote your property’s optimal location and directly target business travelers. You may notice that you have different guest demographics depending on the season. If this is the case, you can add another guest persona and create an appropriate marketing campaign to target that specific group. Segmenting your guest market and building targeted campaigns is strategic and will provide new ideas for increasing your hotel revenue.
3. Sell the experience over the transaction
In the saturated travel marketplace, it’s essential for hotel properties to showcase what makes them unique. As a hotelier, you need to put your property’s best and most differentiating aspects at the forefront of your website and social media accounts so potential guests can start their experience before they even arrive for their stay. You may think this is hard to do if you have a small, basic accommodation, but the real differentiation is between offering a transaction (basic room and board) and an experience (an unforgettable stay). This can often be done with above-and-beyond service instead of relying on a fancy design.
Providing a unique guest experience can become a part of your hotel’s value proposition. Staff should address your customers’ unmet needs and problems and make an effort to make them feel like they are in for something special. You’ll also need real-world evidence or customer reviews to help promote the unique offer that you provide. If you can find something to set your accommodation apart, you’ll, in turn, attract more hotel guests and increase revenue.
4. Maximize online reach with a Channel Manager
How to increase online bookings? A hotel channel manager is made to distribute your room inventory across several different Online Travel Agencies (OTAs) at once and syncs bookings to your PMS software in real-time to optimize occupancy while avoiding overbookings. This means that you can sell the same room on different OTAs, like Booking.com, Expedia, TripAdvisor, etc., and as soon as a room is booked, availability will be removed from the other channels. A channel manager can connect your rooms to a broader audience, giving you more visibility, reaching more travelers, and ultimately increasing hotel revenue and occupancy.
Though using a channel manager is a great way to sell your room availability, you will have to pay a commission fee to the OTAs.