Independent hotels face a unique set of opportunities and challenges when it comes to developing and implementing their revenue strategy.
The independent hotel doesn’t have the negotiating power or marketing budgets of multinational chain hotels, so they’re in a more vulnerable negotiating position with OTAs. There are also often issues with investing in and integrating new technology.
However, independent hotels can react more quickly to changes in the market, and have the freedom to offer unique experiences to their guests.
We want to address what we see as the main challenges and opportunities for revenue management in independent hotels in 2017.
First and foremost, hotels must have a clear revenue strategy in place.
Later in our Challenges for Independent Hotels series we’ll be discussing implementing it and the challenges that come with that, from hotel company structures to the power of technology.
Today, though, let’s focus on what makes a successful revenue strategy:
4 Things to Address Before You Create Your Revenue Strategy
In a market as competitive, fragmented and swiftly changing as the travel industry, an intelligent, flexible revenue strategy is the only path to success.
As technology and guest behaviour changes, you must be able to adapt your distribution strategy. Additionally, your strategy must be able to cope with the many layers of today’s complex distribution landscape.
If not, you’ll find yourself falling behind and your guests turning towards what they see as more easily accessible hotels.
Here are 4 key areas to keep in mind and monitor before and during strategy development: setting the right goal, removing departmental silos, getting agreement for consistent investment, and driving profitability.
1. Properly Setting Business Objectives: Start with the Right Goal
From a strategy perspective, hotels must start with a goal, not with key performance indicators. For KPI’s to be useful, they must follow from your goals. Metrics only matter when you’re looking at them for a reason.
Whether your goal is driving direct bookings at a lower CPA than other online channels or something else (like driving wedding or corporate bookings), your goal is your starting point.