Revenue maximization is the process of taking advantage of every opportunity to realize your full revenue potential. This means thinking beyond rooms and overnight stays and looking at metrics other than average daily rate (ADR) and revenue per available room (RevPAR).
NB: This is an article from Mews
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The most successful hoteliers are those who take a strategic “30,000-foot view”, seeing every space, service and guest touchpoint as an opportunity to make more money. Those who embrace this approach are reaping the biggest rewards, especially in an industry where guest expectations are constantly evolving, and competition is fierce.
With that in mind, let’s break down the five key building blocks of revenue maximization and how the right technology can serve as your engine behind smarter revenue strategies. With these tools in place, you can optimize rates, spaces, payments and currencies to drive measurable results across all aspects of your hotel operations.
The five building blocks of revenue maximization for hotels
1. Optimization – smarter revenue, simplified
Revenue optimization is essential for profitability, but setting room rates manually is like forecasting the weather without technology. And while you might say, ‘I’ve got a PMS and historical data,’ you’re probably still only able to look a few days out. It’s slow, reactive and prone to mistakes that can be costly.
AI is changing the game with revenue management. Not only can revenue management software (RMS) take away time-consuming and risky manual processes, but it can spot trends in real time and respond to unexpected changes in an instant.
Whether that’s competitors changing rates or a sudden flood of demand for rooms, AI-powered pricing tools gather data from a variety of locations and apply an algorithm to dynamically set the best rates – giving you a leg up on the competition and boosting your revenue. In effect, this ensures your hotel’s pricing is always optimized, taking away the what ifs and guesswork for more accurate, profit-driven decisions.
Wondering just how much of a difference an RMS can make? Hotels using Atomize, a Mews company, report up to 35% higher RevPAR, 37% higher ADR, increased occupancy and 20 hours saved per month per revenue manager. That’s serious revenue optimization.
2. Diversification – new revenue, new spaces
Rooms alone won’t generate enough revenue to keep your hotel growing and attract travelers who are looking for more than a bed. It’s time to start thinking creatively, because every space around your hotel holds untapped potential.
Most hotels have underutilized spaces that could be reimagined – meeting rooms, co-working areas, parking spots and even rooms that can be used for day-use. If done right, these spaces can attract new guests, help you adapt to changing market demands and become repeatable revenue streams. The challenge? Managing and monetizing them without adding unnecessary complexity (or yet another spreadsheet into the mix).
