5 Ways Revenue Management is Essential to Building Direct Bookings

Revenue management is fundamental to a well-run hotel. It’s the way hoteliers manage rates, inventory, and distribution in an effort to show the right room to the right guest at the right time at the right price. Here are 5 ways that you can use revenue management techniques specifically to build direct bookings.

The recent drive to push bookings directly through a hotel website comes from a few places. Firstly, managed with proper revenue management, direct bookings are more cost effective than third party bookings. This brings in higher profit margins for your hotel.

Secondly, when you control your direct bookings, you control your online presence. This gives you more leverage with third parties, like OTA’s, and keeps your guest relationship under your control.

Finally, by building that guest relationship after a direct booking, you can upsell the guest, gain their loyalty, and increase their lifetime value.

Here are 5 ways to achieve all that with your revenue management toolkit:

#1: Manage & Evaluate Each Channel

Channel managers make it easier to manage your presence on multiple channels, but it’s performance and net gain that counts. Make sure you’re looking at channels’ performance over time. Do you get huge numbers of bookings from one during high seasons, but practically none during low?

Can you drive those same bookings at a lower cost from a different channel?

To critically evaluate each channel, good revenue managers encourage the team to look at the facts, not their feelings. ‘Liking’ a certain channel means very little when you discover that you get a huge cancellation rate from that channel, or that guests who book through that channel almost never book again. Figure out which channels yield your most valuable guests.

#2: Plan for the Future

Focus your team not only on historic data, but on looking forward with current direct booking trends on site and in the industry.

Pace reports are a great way to unlock hidden revenue, and to tell you when you can expect certain trends. They show you “the rate at which reservations are made for a particular date.” They help you measure swells of demands for particular days and months far in advance, and let you plan for the future.

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