Tech and Techniques to Maximise Hotel Metrics: Pt 2
In this two-part series, we break down the technology and techniques that help hoteliers boost the metrics that matter most. This follow-up article covers the most impactful techniques. Deployed in tandem, these technologies and techniques drive stronger results.
NB: This is an article from OTA Insight
Once the right technology is in place, the next step is to operationalise the techniques that maximise results. From revenue management best practices to segmentation techniques that improve marketing outcomes, these are the techniques that maximise results.
Technique #1: Consistently monitor rate parity
As OTAs drop rate parity clauses, hotels have more leverage to use pricing as an enticement to book direct. Best Available Rates and Member Rates have strong appeal to consumers who want the best price possible.
This strategy loses some of its power when wholesale rates appear on non-contracted OTAs. These rates are often lower than a hotel’s current Best Available Rate, which is priced dynamically in accordance with the current demand trends. When a guest books via that OTA, the hotel loses the higher-priced direct booking and also pays a higher cost of acquiring that booking. It’s a double hit to the profitability of that booking, reducing revenue and increasing cost.
That’s why rate parity is essential for direct booking: when hotel revenue management goals fall prey to disparity, direct booking and RevPAR targets are harder to reach. Invest in the right tools to help you monitor and enforce rate parity across channels.
Metrics affected: NetRevPAR, ADR
Technique #2: Segment and personalise
Each of your hotel’s guest segments has different needs and expectations. This applies equally to marketing messaging and on-property experience. To segment effectively, train staff to collect emails at check-in and to add any relevant notes onto the guest’s profile in the PMS. In addition, keep a close eye on the performance of your marketing campaigns and third-party channels, which are rich sources of insight into which segments perform best for your hotel.
Metrics affected: marketing cost per booking, marketing campaign conversion rates
Technique #3: Upsells and ancillaries
Once you’ve segmented your audience, it’s time to get serious about upselling. Basic segmentation should include pre-stay, arrival, and post-stay cohorts. Pre-stay emails include room upsells and advance purchase of in-destination activities; arrival day “welcome” emails feature last-minute promotions related to on-property amenities and in-destination activities, and post-stay emails encourage repeat visits with exclusive rates for past guests.
Advanced segmentation groups people according to shared characteristics, such as those within drive markets, those with spa affinities, or those who have booked with corporate rates in the past. You can mix and match to create micro-segments to target with exclusive deals and relevant messaging.
For all upselling efforts, implement automation to avoid manual delays. After segmenting, creating offers, and crafting messaging, set it and forget it. Then revisit at regular intervals to tweak and optimise according to performance results.
Metrics affected: website conversion rates, campaign conversion rates, Total Revenue Per Available Room (TRevPAR)
Technique #4: Design packages and promotions creatively
Promotions and packages can be a wonderful draw for direct bookings. These offerings give consumers a reason to visit your website while also showcasing your brand’s personality and your property’s unique amenities. The key is to be creative while staying on-brand. If a promotion or package seems stale or doesn’t appeal to a target demographic, it will fail.
To guide your brainstorms, start with your segmentation. Look at your highest-value segments first to determine the types of promotions that appeal most. Then set up small experiments to test your messaging among specific segments.
“With the right technology, we can understand force of demand, identify demand-generating opportunities, come up with value-added deals to include on OTAs’ websites and our own instead of just dropping prices to boost occupancy and revenue and more.” – Christelle Tropina, general manager, Hotel Astor
Metrics affected: marketing cost per booking
Technique #5: Focus on your best guests
Not all hotels have an active loyalty program. Even if your hotel has a loyalty program, not all members bring equal value to a hotel. Invest in a hotel-specific CRM with rich guest profiles that calculates the lifetime value of each guest. Compare and contrast your highest-value guests to identify shared characteristics that guide marketing initiatives. These guests demonstrate a higher proclivity to do business with your hotel, so it’s your job to maintain those relationships – and to attract more guests like them.
Another tip: encourage guest referrals. When a guest expresses satisfaction with the experience, whether in person or online, train your staff to respond with thanks – and an invite to the hotel’s referral program. Cultivating a legion of word-of-mouth ambassadors is one of those rare investments that brings more dividends over time.
Metrics affected: guest satisfaction rate, returning guest percentage, channel mix.
Technique #6: Optimise your hotel’s channel mix
Direct bookings aren’t free. Even if the reservation comes without any marketing expense, there’s almost always an associated cost. Whether it’s the cost of offering a loyalty program, discounted rates through corporate contracts, or your website’s booking engine technology, each booking has its own profitability profile.
For today’s hotelier, “channel mix mastery” is a key differentiator that separates mediocre hotel performance from the superstars. The proper balance of direct, wholesale, and intermediary business gives the hotel more control and agility to respond dynamically to daily market conditions. Non-direct business increases your reach and fills rooms, and gives you more control to optimise sales across all of your channels with an eye to ever-improving RevPAR.
To ensure you are offering the most attractive and profitable rates available, it is important firstly to understand the channels that travellers opt to book through. It is also helpful to understand why particular OTAs have retained their popularity over the years so you are best equipped to understand how to use them to maximum effect and for maximum return.
Start by examining each distribution channel’s customer mix so you can see if it matches the guest segment that you’re looking to attract to your hotel. Consider the regions, age groups, and behavioural niches that you have access to. And then determine the optimal channel mix for your specific needs. This can and should change over time; as you review results, make the appropriate tweaks to continually optimise your channel mix.
Metrics affected: channel mix, ADR, RevPAR.
Technique #7: More responsive customer service with a sales orientation
A little hustle never hurts: strive to find ambitious staff and then provide the training and cultural support to help each team member become sales-orientated. That’s not to say that everyone becomes a pushy salesperson. On the contrary, it’s about training staff to listen to guest needs and respond accordingly.
For example, in-person interactions at the front desk can be less transactional and more conversational. At check-in, guests could be presented with lightly personalised offer in-person: a free breakfast voucher for corporate travellers or a spa voucher for a weekender. At check-out, staff could be trained to say: “Thank you for staying with us! For your next visit, we’d like to extend a token of our appreciation; here’s 10% off your next stay via our website.”
“Hotels that receive a higher share of bookings through brand.com tend to have higher online customer review rankings.” – Cornell research
As part of a reputation management strategy, a hotel could respond to online reviews not just with a “thank you” but also with relevant information about the hotel. For example, positive feedback about the hotel spa could be accompanied by a non-salesy sentence about spa packages available on the hotel’s website. These types of online interactions show potential guests that your hotel is responsive and eager to offer guests with exceptional service and value.
Metrics affected: channel mix, ADR, RevPAR, TRevPAR.
The top technique is, of course: Exceed guest expectations!
The most straightforward way to increase direct bookings is to give guests a strong reason to return. Hoteliers don’t need technology to exceed guest expectations with a memorable experience. For some guests, a memorable experience means a stay without any issues or unnecessary interactions. For others, a memorable experience involves hotel staff that went above and beyond.
It’s up to your hotel staff, and their technology, to navigate the interplay between expectations and reality. As you look to deploy new technology, and train staff on these best practices, remind everyone that it’s all in service of the guest. At the very least, each guest must get what they need, when and how they want it. At best, the guest experience will exceed expectations – and make a customer for life.