3 Tips to Improve Your Hotel Occupancy Rate

3 Tips to Improve Your Hotel Occupancy Rate

The occupancy rate is a widely tracked metric for any hotel. One of the first steps in measuring the performance of your hotel is looking at its occupancy rate.

First, let’s define what hotel occupancy rate is:

What you’re trying to do, when you calculate your hotel occupancy rate, is to divide the number of rooms booked by the number of rooms available.

Put simply, a hotel with 50 rooms of which 35 are already booked has a 70% occupancy.

For hotel managers, it’s absolutely vital to get good occupancy ratings. In fact, the occupancy rate is one of the most important variables to judge the performance of a hotel.

Which brings us to the three improvements you can make to your hotel revenue management strategy to boost your occupancy rate.

What follows is a detailed summary of how you can achieve a better occupancy rate performance.

Set up a fine-tuned overbooking strategy

When setting up your revenue management goals, you are looking at implementing an overbooking strategy.

It’s a great way to increase the level of your hotel occupancy while also improving your revenue.

To improve a hotel occupancy, Athanasius Zakhary, researcher at Cairo University, recommends to “allow bookings to exceed the available hotel capacity, in anticipation that several reservations will be cancelled”.

The study conducted by Zakhary determined however that an overbooking strategy can have a negative impact on the hotel performance if not conducted using an efficient Revenue Management system.

Imagine how your clients feel when they are told their hotel accepts more reservations than its actual capacity. It can be annoying and may negatively impact your hotel brand, which will affect your goodwill and potential future sales.

If your overbooking strategy is too broad, your hotel will probably incur extra costs for guests who might need to find another hotel.

To avoid these pitfalls, make sure to implement a revenue management plan that helps you forecast arrivals and occupancy levels as accurately as possible. This will result in a better overbooking strategy that can boost your occupancy rates and revenue.

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