Hoteliers and marketing executives in the hotel industry are faced with a multitude of challenges, including budgeting, marketing decisions, selecting appropriate distribution channels, and proper pricing.
NB: This is an article from RateBoard
However, these decisions are often made without sufficient data and factual basis, relying solely on gut feelings. This leads to uncertainty in decision-making and hampers optimization of occupancy and revenue. Additionally, justifying the lack of success becomes difficult.
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One solution is to optimize Marketing & Sales with data-driven measures. By leveraging existing guest and reservation data from the Property Management System (PMS), hotels can analyze guest behavior and booking trends, extracting insights. This enables informed decisions and targeted enhancements to marketing and sales strategies.
Targeted Optimization of Occupancy and Revenue
High occupancy and optimal pricing are crucial for a hotel’s success, significantly influencing revenue. Targeted occupancy optimization requires focused online marketing and an efficient sales strategy. Through digital hotel marketing efforts, strategic room marketing across various distribution channels, and appropriate pricing, occupancy rates can be increased. Revenue management should adjust prices according to demand and competition, ensuring an optimal price-performance ratio.
Furthermore, revenue can be increased by promoting additional sales. This can be achieved by offering cross-selling options, such as additional spa treatments or upgrades to higher room categories. Various sales strategies are described in the following article by RateBoard. Through targeted guest communication before, during, and after their stay, guests can be encouraged to take advantage of these supplementary services, thereby increasing revenue.
Transparency and Measurability as Key Components
Analyzing and understanding the effectiveness of specific marketing actions is essential to measure success. Questions like “How many new guests were acquired?” or “How many bookings were generated?” or “What reservation revenue was achieved?” need to be answered. Innovative tracking and data analysis tools enable the assessment of hotel marketing profitability through metrics like Return on Investment (ROI). This allows targeted use of the marketing budget, avoiding unnecessary spending on unprofitable actions. Measurability and transparency enable evaluation of the effectiveness of different marketing activities, investing only in those that truly pay off.
Similarly, pricing plays a crucial role in a hotel’s success alongside marketing. However, it becomes problematic when hoteliers continue to make pricing decisions based solely on gut feelings, without considering recommendations or data. This can have significant consequences and strongly impact the hotel’s performance. Setting prices too low can lead to early full occupancy, missing potential revenue since adjusting prices for already booked contingents becomes impossible. Conversely, excessively low prices can diminish the perceived value of the hotel in guests’ eyes, as they often associate quality and service with price. On the other hand, setting prices too high may lead to under-occupancy, as guests perceive an inadequate price-performance ratio. Low occupancy, in turn, results in revenue losses.
