In this festive season hoteliers have to start doing everything they can to fill up the rooms of their properties. This is the moment to close the year with green numbers. What can be done in order to achieve this goal?

Here are some revenue management strategies that you can work with this Christmas and that can help you improve your occupancy and maximize your direct income.

Sell, but sell at a higher price with upselling:

In sales, “upselling” is the practice of encouraging customers to pay more for a similar product (but of higher quality) than the one they are thinking of choosing.

A client is browsing the website of your hotel and is looking to book a double room, but, just before finalizing the booking, they are shown the option of the superior double room (more spacious and with better amenities).

How can you convince the client to book the double superior instead of the double standard at this Christmas season or at any time of the year?

1. Use high-quality photographs in your booking engine, highlighting differential spaces.

2. Include a text such as “Only €30 more”, to help the customer focus on the value of this upgrade.
   3. Promote scarcity and urgency as booking.com does by appealing to the fear that this offer or room is limited.

Create and promote the “early booking rate”Many people like to book ahead of time. Take advantage of this Christmas season to include early booking rates for 2019. Improve your short-term cash flow by fully charging a reservation that will be made in 40 days or more. Another advantage of this strategy is that it helps you drastically reduce your cancellation fees.

Offer and promote packages that guarantee reservations

Create suitable packages for this time of year, designed for families, singles and seniors.

For many families, Christmas is a time to change the routine, not to spend thousands of hours cooking for your entire family. Your hotel can offer a package for these families that include accommodation, dinners and, of course, some activities for the children.

Another segment that of clients we recommend targeting your offer at for this Christmas is the singles. Offer special packages of half-board or full-board for singles that include a Christmas or New Year party and/or an event to meet people.

Finally, the third age segment or grandparents can also bring benefits and ensure greater occupancy at the end of the year. As life expectancy increases around the world, there are more retired people and not everyone has family to visit. Offer half-board or full-board packages with specific activities for them including, of course, your New Year’s Eve dinner.

Optimize your multi-channel strategy

During the last decade, the hotel industry has undergone dramatic changes, particularly in revenue management. OTAs, GDSs and metasearch websites are competing for customer service and all are affecting the margins of the hotels. This is why hotels have to optimize their channel mix and analyze in depth the costs and benefits of each one of them in order to develop a holistic strategy that generates income and profit flows that are sustainable in the future.

How do you do it?

On one hand, analyze the costs of each one of the channels: the rates of the CRS, the commissions of the OTAs and, of course, the direct channel. On the other hand, understand the history of each of the channels and how they have impacted sales. Then maximize the profitability of each channel, evaluating the total contribution of each of them. For example, the channels that bring guests who in the long run make greater complimentary expense and repeat are much more profitable than those that bring customers who do not consume anything at the hotel and don’t return.

Optimize your products and prices based on your history and customers

Develop a strategy of balanced room types. This is done by evaluating your rooms and the prices of your products and how you describe them in the sales channels.

Commit to actively managing your inventory and selling your premium product instead of upgrading to boost rates.

Finally, understand your clients to find out which ones offer the most value to your hotel. Different customer profiles have a strong preference for particular channels, but you have to know which channels bring us customers that spend more in your establishment. If you manage to capture the additional expense of your customers, instead of just the income per room, you can make a clearer picture of the total value of the client and with them accurately forecast the demand and set rates optimized per room.

With these 5 revenue management ideas for this Christmas, we hope you can generate more bookings and more revenue for your hotel.

Revenue management in the hospitality industry involves predicting customer demand with the aim of streamlining the sales process, allowing companies to sell at the correct price, to the correct customer, at the correct time. When conducted correctly, revenue management can be an extremely effective strategy, helping hotels to significantly enhance their profit margins.

Follow the 8 revenue management tips below to boost your hotel’s performance.

1. Create a revenue management culture

Our first revenue management tip is to create a revenue management culture within your organisation, but what do we mean by this exactly? Basically, this means that revenue management is not something which should be left entirely to the main decision-makers or to the management team; it’s something which everyone should be aware of.

By raising awareness of what revenue management is and why it is important for the hotel, positive behaviour can be encouraged among all employees. If employees understand why it is necessary, they will tend to be more careful when recording data and more likely to use this data to make good decisions based on knowledge.

2. Keep consistent, relevant records

Data collection is the essence of the revenue management process, and the data compiled by the hotel will form the basis of almost all of the decisions made. However, some hotels record too much data, which only serves to confuse matters. Therefore, it is vital for records to be relevant and consistent.
You must identify exactly what information must be collected and how it must be recorded. Then, to make life easier for the people who will use the data, a set of standard practices must be introduced, ensuring that all those involved in data collection employ consistent methods.

3.Offer incentives for direct reservations

Although OTAs may be of great assistance, generally speaking, it is preferable to attract direct reservations. This is the best way to build customer loyalty. As most direct reservations are made online, the hotel website must be well-maintained and updated.
At a time when prices can be compared on third-party websites in just a few seconds, the trick for attracting direct reservations is to offer worthwhile incentives. For example, loyalty programmes offer the possibility of obtaining lower prices in exchange for frequent visits, while other ideas include offering discounts in restaurants or free Wi-Fi for guests making direct reservations.

4. Pay attention to changes in guest habits

A significant part of revenue management involves the use of historical data to make decisions in the present in relation to the future. However, historical data is not always entirely reliable.
Over the years, it is likely that you will see changes in your customer database. These changes may include aspects such as average age, but they may also be more subtle. For example, you may notice a change in the way in which the average client reserves a room.

5.Focus on providing added value

One of the best revenue management tips is to think in terms of offering as much value as possible. Part of price optimization is understanding when prices shouldn’t necessarily be compromised.
By offering extra value, such as discounts for additional nights or even a free extra night when demand is sufficiently low, you can be braver with your prices, which could generate higher revenues.

6.Predict and map demand

Of course, anticipating demand is one of the most important elements of any revenue management strategy, and this requires forecasting. It’s also important to predict aspects such as availability of rooms and market share. However, you must also take measures to attempt to identify the origin of the demand.

Hotels are usually able to access excellent information on their guests, especially in terms of their origin. By comparing this information with historical data, it should be possible to identify the areas in which demand is growing and other associated trends, which could lead to a growth in business from these regions in the future.

7.Only use automation when appropriate

Many hotels largely depend on automation, and it can seem like a gift from heaven. However, automation can sometimes be an enemy of revenue management, which requires complex decisions based on factors such as supply, demand, the cost of making a sale, etc.

To be clear, automation can still play a role within a revenue management strategy. After all, modern software is capable of handling fairly complex decisions and relieves employees from time-consuming data entry tasks. However, good revenue management also requires human decisions, thinking outside the box and taking occasional risks.

8.Prioritise mobile optimisation

Our final revenue management tip relates to mobile optimisation of hotel websites. If you haven’t done this yet, it’s absolutely essential that you make the necessary changes to your hotel website so that the user experience on a mobile device is just as simple as on a desktop or laptop computer.

Mobile devices are now one of the most significant sources of revenues. In fact, Google recently revealed that mobile searches now exceed desktop searches.

By following the 8 tips listed above, you’ll be able to implement an effective revenue management strategy, allowing you to match supply to demand and maximise your property’s revenues.

Reach us to learn how Channel Manager can help you streamline your distribution and increase your revenue.

Revenue management in the hotel industry is still relatively young and has grown exponentially in the last decade, particularly in the last few years.
This article explores the changing role of revenue management in the hotel industry and the developments which we can expect to see in the near future.

1. Revenue management is moving up a notch

A growing trend of elevating the role of revenue management can be observed in the hotel industry. Many hotels are now seeking the analytical overview and strategic knowledge which only this area can provide. This information and knowledge is used to make key decisions. Revenue managers are increasingly participating in executive committees, with the same status and stature as directors of marketing and sales departments. Equally, many hotels no longer have a revenue manager but rather a director of revenue management, lending far greater weight to the role.

2. The role of revenue management will continue to expand

Revenue management is undergoing constant change, to a far greater extent than other departments. This is due to its close links with technological capability. As technology evolves, analytical methods will be far more powerful.
At the current time, a revenue manager must be able to tackle marketing and sales challenges.

3. Revenue management will expand to other sectors

Revenue management is forecast to expand to other revenue-generating areas in hotels such as hotel restaurants, venue hire, room service and leisure facilities.
You may also be interested in: 3 key aspects of a successful revenue management strategy

4. Profit management will play a central role for hotels and revenue managers

The increase in importance of revenue managers in hotels is down to one key factor: they are in a unique position to help generate profits. For this reason, the role will increasingly be perceived as profit generation rather than revenue management. As a result, revenue managers are focusing more and more on increasing profit margins instead of increasing revenues.
This focus on profit will intensify this year, as revenue management uses new methods to better understand customers and improve margins.

5. Revenue managers will focus on guest analysis

The hotel sector is more competitive today than ever. Hotels are not only competing with their rivals in the same city, but also with competitors in other cities and even their international counterparts. Online travel agencies, the increase in Airbnb apartments and high demand from guests are making the industry more and more competitive. As a result, hotels are resorting to customer analysis in order to offer better products adapted to each segment.

Building an efficient distribution strategy for a hotel is a challenge that many hotel managers are facing today. Fierce competition they encounter on the market pushes them increasingly more frequently to take risk and reach out for entirely new markets and segments. On-line travel agencies (OTA) are usually an indispensable ingredient of such strategy but reliance on this channel cannot guarantee success. How to reach a completely new group of clients? How to conquer new markets and improve operating parameters of a hotel?

The ongoing globalisation and the overwhelmingly rapid emergence and growing accessibility of new technologies are the key factors that make conquering new markets much easier today than it used to be the case just a few or a dozen or so years ago. This applies to tourism as well as to any other industry. Reaching prospective clients with, and personalization of, an offer have never been easier, which is true of activities undertaken by hotels both directly and through intermediaries (such as OTA). However, relentless experimentation, optimization of efforts and continuous adaptation of distribution strategies to changing business environments and evolving preferences and expectations of clients remain the key to success –  all that in the face of stronger than ever competition. The use of advanced technologies by the tourism and hotel industry has boosted the growth of the market, and has made much easier the travel planning process itself. Mobile devices have almost replaced desktop PCs from communications between hotels and their clients. Almost everyone has a smartphone today, so hotels can use the GPS tracking facility to inform their clients in an instant of any delay or change in the bookings and, further, efficiently distribute any promotional material.

The growth of the Internet and its widespread use for planning travel have changed the hotel industry beyond recognition. The first contact of a prospective client with a hotel is still often established by visiting the website of the hotel as the interface for the visible part of the booking process. What is important, this form of booking is the most desirable one because there are no commissions for intermediaries of any kind. Effective building of on-line advertising, social media and content marketing for attracting as many prospective clients as possible to the website of the hotel is crucial to this process. Considering the number of boarding facilities, from large international chains to small independent hotels, which are very active on the Internet today, pursuing an efficient on-line marketing strategy is not as simple as it would seem. On the contrary: it is very difficult and, in addition, more costly from year to year. So, how to prepare for winning new markets? What to remember? What mistakes to avoid?

#1 Identify your target group

There are many ways to source new clients and thereby win entirely new markets. However, the hotel needs to pinpoint it target group before proceeding to the drafting of a marketing and distribution strategy. This is so because different solutions will work for domestic clients than for international ones.

The use of services of on-line travel agencies (OTA) is one of the most effective and least expensive ways of reaching new clients and winning new markets. Tapping on the global coverage of well-established international OTA brands will enable a hotel to diversify its client base and reach entirely new segments and markets. However, to succeed, the hotel needs to define, and learn as much as possible about, the target group before partnering with any OTA for pursuit of the hotel’s distribution strategy. The more accurate definition of the target group, the better odds for coming up with the right marketing and distribution strategy.

#2 Define your strategy

Any campaign aiming at winning new markets and reaching new client segments has to be carefully prepared, so that clients are not only captured but also retained. This calls for a thorough examination of requirements and expectations of the selected target group and for drafting of a proposition maximally suited to these demands: different for business than for tourist clients, as well as different for people who seek a hotel for 2 or 3 nights than for longer-term guests.

Accordingly, to pin-point requirements of a new target group, the hotel may need to personalize its service menu, for instance by throwing in attractive packages for longer-stay clients or by investing in availability of complementary services, such as conference facilities. The planning should be careful, as is the case with any business strategy. No massive investment of effort or money in attracting new clients will make any sense unless the hotel already has an attractive offer in place.

#3 Prepare your action plan

The strategy, once it has been defined, has to be translated into a detailed action plan suitable for implementation, split into a series of individual tasks with assigned priorities, personal responsibilities and deadlines. It is also a good practice to identify all stakeholders and to define milestones for review and wrap-up of the hitherto progress of the plan.

Drafting of the plan is a critical phase and the process should be sufficiently thorough to prevent the taking of hasty decisions or actions. Chaotic or ill-considered steps can cascade into a number of mistakes, the remedying of which could turn out to be very costly or time consuming.

#4 Monitor your performance and optimize your strategy

Specific actions dictated directly by the adopted strategy and by the finished action plan are the last step to the winning of new markets and to the reaching of new groups of clients. Given that the hotel service market is very dynamic and competitive, implementation of the plan should be followed and optimized on regular basis.

OTAs can help in reaching the targeted groups of clients, so partnering with them can be worth the cost and effort. There are myriads of them today. They range from global companies with world-wide recognition to small local offices serving their niche markets. One concern is that although the theoretically desirable representation of the hotel by large and most popular OTAs can warrant the reaching of a really huge population of prospective clients, the actual rate of conversion could be very disappointing. Also, the booking acquisition costs can be higher than average. This is one of the reasons why smaller or niche agencies should not be automatically dismissed. While they have an incomparably smaller reach, they also face less competition, which can translate into better conversion rates.

Accordingly, flexibility and openness to experimentation seem to be the right approach to the successful building of a winning distribution strategy. Also, daily monitoring of operating performance and of cost-effectiveness of conversion is critical to the financial bottom line.

#5 Make sure your distribution strategy is effective

Inclusion of OTAs in distribution strategies is a necessity of the times because these organizations are professionals that stay on the top of changes in travelling habits and keep ahead of advanced mobile booking technologies. Although having clients book directly, via the hotel’s website, is more profitable, free from substantial agency commissions, the fact is that OTAs tend to contribute a two-digit per cent share of bookings and the volume of business they bring to hotels is becoming more important from year to year.

When relying on OTAs as part of the hotel’s distribution strategy, one should ensure to take maximum advantage of this distribution channel. The hotel should always “dress up” for its clients to keep them from going to the hotel’s competitors. High quality visuals, combined with a detailed description of the hotel, can do miracles and contribute directly to the hotel’s operating margins. According to a study by Expedia, the doubling of the number of photographs on an OTA’s website can increase the booking ratio by 4.5% and ADR by USD 3.5! A professional, keyword-optimized description of the hotel can improve the results even further: by 5.0% and USD 5, respectively. Considering these improvements, it is worth hiring a professional photographer and ensuring that the description of the hotel is appealing and up to date.

However, even best visuals and narratives will not translate into a high number of bookings unless the hotel has good credentials and high general ratings. It is clear from studies that hotels with large numbers of reviews get the lion’s share of the clientele. Comments published by guests on OTAs’ websites should be monitored in real time and never left without response. Each critical or favourable review should be answered within 24-48 hours to minimize negative effects of a negative opinion and, in the case of a positive opinion, to reinforce the impression of genuine care for guests and their well-being even after their stay ended. This follow-up can pay off rapidly in the form of a higher conversion rate: a growth of almost 1.5% for more than 50 recommendations.

Join us for an exclusive masterclass for hoteliers in Warsaw on September 6th (Thursday). Learn about best practices and innovative ideas to increase revenue.

Join us for an exclusive masterclass for hoteliers in Warsaw on September 6th (Thursday). Learn about best practices and innovative ideas to increase revenue.

The event, co-organized by ReviewPro and YieldPlanet, provides an opportunity to hear from three engaging speakers, network and talk about the challenges hotels face when it comes to boost revenue.

Elena Zhelezniak, Sales Manager at ReviewPro, will guide the participants on how to deliver better experiences and drive revenue. Sebastian Andruszczak, Sales and Marketing Director and Piotr Olesiński, Product Manager will introduce YieldPlanet’s new Revenue Management System – Price Optimizer. They will showcase how new technologies can change the hotel industry and how you can use them to automate your revenue management process.

The masterclass is free to attend, but places are limited. Save your spot today – register here .

Agenda

09:00 Welcome and introduction

09:30 Leveraging Guest Intelligence to Deliver Better Experiences & Drive Revenue
Speaker: Elena Zhelezniak, Sales Manager, ReviewPro (ENG)

10:15 Dynamic Revenue Management
Speaker: Sebastian Andruszczak, Sales and Marketing Director & Piotr Olesinski, Product Manager, YieldPlanet (PL)

11:00 Coffee Break & networking

Date: Thursday, September 6th

Time: 09:00 – 12:00

Venue: Radisson Blu Centrum Hotel, Warsaw

Address: Grzybowska 24, 00-132 Warszawa

REGISTER NOW