5 Things Standing Between Your Property and Increased Revenue
Ask any business owner what the primary marker of a successful operation is, and they will likely share the same answer — profit.
NB: This is an article from iVvy
In the case of hospitality, hoteliers aren’t only focused on achieving the ideal guest experience; they’re also continually searching for ways to increase their bottom line. After all, operating a successful hotel is no easy task. From staffing to daily operations, revenue optimization to guest service and the pressure to remain ahead of industry technologies and trends, hoteliers have their work cut out for them.
Are occupancy rates high and consistent? Where does RevPAR stand? Are guests booking direct and coming back? Are rates optimized? Are you missing out on group booking opportunities? These are just a few of the questions running through a hotelier’s mind as they piece together their winning strategies.
However, in many cases, there may be a few key factors to blame if a hotel has yet to tap into it’s true revenue potential. Taking some proactive measures and focusing on these five areas of improvement can elevate guest service, improve operations, and ultimately result in increased revenues.
1. Direct Booking Sales Strategy
A love-hate war has been waged for years now between hotels and OTAs. While OTAs have had an undeniably significant impact on global travel, hotel properties that are too reliant on these platforms and third parties will lose out on revenue in the way of high commissions. These hotels suffer from increasingly high guest acquisition costs, unable to capitalize on the increased revenue potential associated with direct bookings.
How to Solve It: Why do so many guests utilize third-party booking sites rather than going directly through a hotel? The answer is rather simple. Literally — it comes down to simplicity. By investing in modern booking technology for both transient and group business, hotels are better equipped to encourage direct bookings. With the next generation online platforms available today, hotel’s today have no excuse not to implement an online booking engine that encourages conversions for all segments. Hotel operators should also prioritize their social media strategy when focusing on increasing direct bookings.
Properties should list all relevant hotel details, including real-time availability, while also offering incentives for those guests and group planners who book direct. In fact, studies show that over 75% of people prefer to book a hotel room via the internet. In 2017, Skift reported that “no one wants to use RFPs for small meetings today; they are universally hated” and noted that RFPs for small meetings under 100 people were definitively on their way out. Ultimately, f you make it easy for lookers to book directly from your website, then you will have a higher chance of getting the business from OTAs.
2. Pricing Optimization
Beyond attracting and confirming leads, if your revenue management process in place is manual, you likely aren’t effectively identifying room rates. If hoteliers are constantly struggling to sell the right hotel room, to the right customer or group, at the right time and the right price, they may be missing out on major revenue potential.
How to Solve It: Pricing rooms and venues should never be a matter of guesswork. Technology and data should mitigate any pricing-related uncertainty with built-in revenue management and analytics to ensure pricing is set right and parity all year round. Rather than focusing solely on occupancy over profitability, hoteliers need to invest in dedicated revenue management technology, for both transient and group business, to optimize their pricing strategies. This technology provides enhanced visibility to data, trends, business performance, and competitive insights.
3. Marketing to Guests
Studies show that it’s 50% easier to sell to existing customers than to new prospects — and yet, hoteliers often miss out on valuable marketing, cross-sell and up-sell opportunities with their guests and groups before, during and after their stay.
How to Solve It: With the demand for enhanced personalization reigning supreme across almost every touchpoint of the guest journey, the need for data-driven tailored marketing and communications has never been more paramount. With this in mind, hoteliers should actively seek out solutions to centralize and automate marketing activities as well as provide actionable insights, analytics, and prompts. Your efforts need to target and attract single travelers, business travelers, and groups.
4. Gathering and Responding to Guest Feedback
The key to long term success for any hotel is centered around the provision of an exceptional guest experience. That means, guest feedback should be treated as an invaluable resource, and an important tool used to identify opportunities for growth. When it comes to the hospitality industry, an uninformed strategy is a weak strategy.
How to Solve It: Satisfaction surveys, comments and reviews, social media posts, and other platforms represent a wealth of information to hoteliers. Every lodging operator has a responsibility to keep their ear to the ground and use guest feedback to highlight their property’s strengths as well as areas for improvement. Taking guest insights and applying them to the service model will allow hoteliers to elevate the guest experience, which will ultimately result in increased revenue.
Even further, inviting and monitoring guest feedback allows hoteliers to proactively mitigate (and recover) poor guest service experiences pro-actively. In an age where guest perception and online reputation are everything, taking a pro-active stance on guest service is unfoundedly imperative to the on-going success of any hotel.
It isn’t uncommon for hoteliers to be tied to legacy technology which, in turn, negatively impacts their property’s operational performance and profits. As guest expectations continue to evolve and reach new standards, it is imperative for hoteliers to eliminate inefficiencies and empower staff and guests with the latest technology.
How to Solve It: An efficient operational model acts as the lifeblood of your hotel, set yourself up for success with the right technology. Take a look at your “tech stack” and identify any areas of weakness. If an existing system or application doesn’t meet the current and future needs of your property — or have the capacity to scale — it’s time for an upgrade.
In the case of hospitality, investment in technology can make or break a hotels’ efficiency, success, and revenue potential. Within this point, one of the most overlooked areas in hospitality technology is venue management systems. Far too many hotels are relying on manual processes or legacy sales and catering systems that can no longer provide the operational support or intuitive functionality that properties of all sizes need today. Moreover, outdated, cumbersome venue management software is less efficient, which hurts staff productivity and profits. Events and group bookings represent a huge revenue opportunity for hotels, and the time to embrace new sales and catering technology to automate the booking experience for modern planners and hotel sales staff is now.
In the case of hospitality, investment in technology can make or break a hotels’ efficiency, success, and revenue potential.