In the last few months, we covered the basics of revenue management in a four-part series. If you haven’t had a chance to review our past Revenue Management 101 articles, we highly recommend you go over them when you get a chance. As a quick recap, part one breaks down revenue management basics, part two identifies dynamic pricing as the first step to managing your hospitality business’s revenue, and part 3 covers setting stay restrictions and managing booking channels as the following two strategy steps. The fourth segment in the series examines overselling and managing group and corporate business.
Since our series was successful at helping readers understand revenue management best practices, we decided to have our Pricing Intelligence Product Manager and revenue management specialist, Ira Vouk include a few more bonus tips for increasing revenue. Take it away, Ira!
Obviously, marketing is a whole separate discipline and larger hotel properties and hotel management companies normally have a separate position -or even a whole department- dedicated to marketing strategies. However, I feel obligated to list it here because marketing needs to go hand in hand with Revenue Management, as timing, rates, and availability will ultimately determine what campaigns you run and when.
One of the biggest goals of any hotelier is to be able to shift business away from the OTAs to the hotel’s direct sales channels (which, as we know, happen to be the least expensive for the hotel and thus the most profitable). The truth is: this goal is hard to accomplish through the use of Revenue Management techniques alone. That’s why the marketing and sales departments are the best resources for any Revenue Manager trying to achieve more direct bookings.
TripAdvisor is the undisputed leader in the world of online travel reviews. However, it’s also important to monitor and respond to the reviews posted on your own website (if applicable), all major OTA sites, as well as social media accounts.
There are SEO benefits, too. Adding original content to websites, such as reviews, is a great way to draw more traffic to your website.
Selling upgrades is an effective way of increasing revenue. Make an active attempt to sell additional services or amenities at the front desk, on your website or via email marketing campaigns. A caller/booker may be unaware of varying rates and amenities. Employees should be trained to listen to guests and make suggestions for an appropriate accommodation upsell. There are various methods of upgrading: top-down (mentioning the higher-priced option first), rate-category-alternatives (trying to upsell from a lower-rate category to a mid-rate one), or bottom-up (mentioning the cheapest option first and introducing each following categories in increments, such as, “For only $19 more…”) There are also software tools that help hoteliers maximize their revenue through proper upselling.
Monitor and analyze the booking pace of different room types during different demand seasons and increase or decrease the difference in rates between them to maximize resulting revenue.
For example, during the summer season, 2-bedroom suites may be more popular if a hotel attracts more family business, whereas corporate clients (single-bed users) may book more frequently during winter. Analyze your booking patterns per room type before making decisions on the room type differentials.
Cloudbeds’ Pricing Intelligence Engine (PIE) can help you manage room types individually based on occupancy levels that are specific for those room types. Actually, PIE can help you tackle every opportunity to yield more revenue, including helping you compare rates with competitors and gathering real-time market data so you can make better pricing and distribution decisions. Learn more about how PIE can revolutionize your pricing strategy here.
Many hotels have other revenue-generating departments, in addition to rooms. If those ancillary revenue venues are significant, it is also important to manage them to maximize the overall profitability of the hotel. This sometimes may mean discounting or even eliminating the costs associated with one department to increase the revenue from another one, thus increasing the overall bottom line. For example, hoteliers can consider offering free parking or a restaurant discount as an incentive for booking a large group or offer a discounted room rate to encourage guests to spend more in the hotel’s casino.
As you can see, there are a number of ways property owners can increase their revenue outside of more direct pricing and revenue management strategies. By far, the easiest way to manage your revenue is with a tool designed specifically to help you with your revenue goals. Cloudbeds’ Pricing Intelligence Engine (PIE) is an all-in-one competitive intelligence dashboard made to help independent property owners and managers make better pricing decisions.
Ira is Pricing Intelligence Product Manager for Cloudbeds. Ira is also the co-founder of iRates. She was selected as Top 5 Revenue Managers in the country in 2013 by HSMAI. With a background in sociology and marketing research, she has been able to apply her knowledge and experience to the hotel industry and develop many innovative ideas.