With many moving parts and no brand systems or guidance to assist, it is essential to a hotel’s revenue success to invest in the right tools, most of which will save dollars.
Let’s look at the revenue components of an independent hotel. A savvy sales team can make or break your hotel as group business generally books well in advance to provide the ideal base business. Without the power of a brand sales team and the tools that they provide, your independent hotel’s sales efforts need to ensure that they are utilizing the right channels to effectively capture transient demand.
While global distribution system business is mostly pay-to-play, it provides exceptional return on investment in the right markets. Responding to requests for proposals from national accounts can be tedious, but it is an essential piece to your revenue puzzle. Local negotiated rates are equally important for your sales team to seek out. These accounts are special rates set up with local businesses that have travel needs in the area and driven by the relationships your team develops with the travel manager of the company.
Direct bookings are the most cost-effective business for boutique hotels, so it is always the goal to drive business to our own booking channels. Identifying what percent of business you need from group sales, GDS and online travel agencies is paramount to a successful revenue strategy. Understanding the cost of all of your booking channels allows you to properly layer in business by evaluating the effective average daily rate and adjusting your available rates accordingly. Set occupancy thresholds for your hotel as key indicators of when to increase your rates.
Balancing meeting rooms and sleeping rooms has always been tough for revenue managers who have not been on the group sales side of the business and salespeople not familiar with RFPs. They must equip themselves with new tools. Identify your hotel’s ideal rooms-to-space ratio to optimize profits on any piece of group business and to ensure your revenue manager and sales team are on the same page.
