Running a B&B is the best job in the world. You get to greet happy vacationing guests, provide lovely surroundings and luxury meals, and showcase the beauty of your own hometown at its finest.
NB: This is an article from Little Hotelier
However, not every aspect of the role is so rosy, especially when it comes to the potential pitfalls of B&B revenue management. Unfortunately, revenue management is hard to master. Even if you’re raking in the cash – and most bed and breakfasts operate on slimmer margins than that – it’s easy to make mistakes that negatively impact your bottom line.
Here are a few of the most common errors and smart revenue management tips to help you avoid them.
1. Being unrealistic about your star rating
Some B&Bs artificially inflate or deflate their star ratings through online travel companies. They may figure that listing a higher star rating will net them higher rates. Conversely, some properties put a lower star rating so that when customers arrive they’ll ‘get a nice surprise’ when amenities are nicer than expected. Unfortunately, the first strategy overcharges customers, which will lose you business. The second strategy loses you necessary revenue.
Instead, just be honest.
2. Failing to take critical dates into account
When you use revenue management software, track analytics to discover the most popular booking times before you run any promotions. Every destination has a high season, and most have events at different times of year that will increase traffic. If you fail to take this into account, you may miss high-volume windows, causing campaigns to flop and your efforts to amount to nothing.
3. Not changing rates
The hospitality industry fluctuates frequently. Leaving your rates the same, because it’s easier and you’re afraid to rock the boat, means you will miss out on major opportunities during business booms and may drive customers away from your door during busts. Use management software to track market changes, then reflect them in your own rates.
4. Basing estimates on high times
Some B&B managers, especially relative newbies, can get caught up in the glory of the high season. It’s easy to make the mistake of predicting the same success throughout the year, but don’t get dollar signs in your eyes just yet.
Proper revenue management means taking into account the low times as well before you make any long-term plans. Look into the data surrounding your destination to know when business might drop.
5. Obsessing about filling rooms during low times
When times are slow, it doesn’t help to panic and try desperately to fill rooms. Not only is this unlikely to work – some seasons are simply sluggish, and you can’t change that – you waste time completing other tasks needed to keep your B&B running smooth. Be sure to complete your low-season tasks, such as updates or remodels, during this time.
6. Ignoring online travel agencies
OTAs are a rich source of data, especially considering so many people book their stays through a third party. With so much business funnelled through OTAs, you can’t afford to neglect them. Instead, match your promotional strategies with OTA promotions, and make sure you adjust your rates with your online channels every time you change them.
Of course, many other strategies exist when it comes to managing your B&B, but the above revenue management advice is the best place to start. Try to implement each of these, whether that means a quick fix or a long-term strategy, and you’ll be better off in the future.
