In the era of rapid technological advancements, the margin of error is shrinking. Competition becomes stiff and products and service methodologies are getting obsolete in no time. The Hospitality industry is no exception to this super interesting yet challenging phase. In this post, we bring you some of the top hotel revenue management strategies to grow your hotel business.
This post dwells on effective strategies to help hotel businesses maximise revenue.
We have included in this article some of the best revenue management tips and hotel yield management strategies to maximise revenue in the Hospitality industry.
Managing revenue effectively is definitely one of the key management issues in the hotel industry. It is today and has always been.
While a lot of Information systems of Hospitality make definitive attempts to ensure a better revenue management system but without effective strategies, even they are just some binary codes available to you and your competitors alike.
Devising effective revenue Management Strategies for the hotel industry is thus key to success in this highly competitive and rapidly growing industry.
So, without any further ado, lets quickly move on to the strategies.
1. Optimising website for Mobile customers
A lot of weight is being given to mobile-friendliness these days. Every company seems to be sweating out to become more mobile-friendly.
And now we put it right at the top in hotel revenue management strategies. Yes, it’s that important.
So, are we off-topic? Definitely not.
Going mobile with complete dedication should be a top priority for all hotel business. That is where you are going to get your maximum customer from.
Expect most of the revenue from your hospitality business to come through this mode.
Thus a mobile optimisation strategy would be the backbone of any revenue management strategy now and in the coming years.
Plus, your brand gets a big thumbs up globally if you are optimised for mobile devices.
There are several research on why your business website must be optimised for mobile.
Key takeaways are:
- Over half of Millenials plan their travel online
- Mobile bookings are growing at a faster rate
As is clear, due to this, bookings on mobiles are growing at a huge pace.
So, focusing on mobile has to be on your list as far as your top revenue management strategy is concerned.
It must be on the top somewhere.
Another image, courtesy Pinterest, might help to further fortify this assertion that a focus on a bigger and better mobile presence is crucial for growth in the travel industry.
Have a look.
So, if you have not yet optimised your mobile site, it’s important to give it immediate attention.
Using mobile technology is also one of the key hotel industry trends in 2020s and will stay so in the coming years.
2. Integrating Various Distribution Channels and a focus on Direct bookings
In order to maximise revenue for your hotel business, it is important to keep things simple.
Would it not be easy to have all distribution channels integrated into one place.
Will definitely save a lot of costs and will add to the convenience.
It is thus an important part of revenue management strategies for hotel business growth.
And, this is connected to the mobile optimisation that we have discussed in the previous point.
A focus on direct booking while integrating the distribution channels can take away most of the hassles.
While this used to be a big ask back in the days but technology and mobile-first focus have made this simpler now.
It is an important hotel business strategy to focus on the below mentioned in order to maximise revenue.
- Global Distribution system- We will discuss this further in this post
- Quality Hotel Website for improving direct booking rates
- Using Online and Offline Travel Agencies
- Leveraging Social media for maximum advantages
- Search Engine Optimisation
There must be a key focus on building a great website so as to promote direct booking.
This takes away a lot of hassles of revenue management if most of the customers are managed and taken care of directly.
Most of the large hotel chains are already implementing this strategy.
Having a great website and mobile-first strategy is definitely one of the top marketing strategies in the hospitality industry.
There are a lot of hotel revenue management companies which would set this up for you with ease.
3. Using effective Revenue Management Tools for the Hotel Industry
A lot of revenue management strategies have been mentioned in this article.
Xotel has also mentioned through various articles about other revenue management strategies like Market Segmentation, Price positioning, Stay Controls, Displacement Calculations etc.
There are a lot of Hotel Revenue Management tools which might cut the task short while retaining the quality and level of service.
These are of the likes of:
- Hotel KPI Dashboard
- Various Forecasting Tools
- Hotel Arrival-departure tracking tools
- Hotel Booking curve
- Yield calculators
- Summary reports
- Budget vs expense calculator
- Price Matrix
- Rate fence tool
and many more.
So, check them out if you want to research further on the revenue management strategies for the hotel industry.
In order to implement these effectively, you might need the support of technology.
There are a lot of useful hotel revenue management software solutions available on the world wide web that might be of great help.
You can safely have a look, try out a few of these and settle for the best options.
4. Monitoring Market rates and Competitor rates
This is one of the most important revenues management strategies to ensure the continued success of your hotel business.
Any yield management strategy focusing on maximising hotel revenue by decreasing errors and increasing revenue can’t ignore the market and the competition.
Siteminder in one of its article on Pricing strategy and revenue management strategy for the Hotel industry has stressed on keeping a real-time monitor to track prices.
Prices of the market, the industry in general and of key competitors.
And, we can’t agree more. If you want to read more on how pricing strategy should be incorporated in the revenue management strategies to grow your hotel business, read the full article here.
Monitoring key data helps in managing revenues well and helps in proper forecasting.
This again is quite easy to implement in the current technology era.
While the data is readily available but analysis it effectively to incorporate in revenue management still needs some doing.
Why is this important? It helps in Yield management which is pretty much a part of revenue management.
Knowing how your competition is doing and managing rates dynamically helps you adjust in real-time to ensure that your customer doesn’t get deflected to a competitor.
Thus, it helps in adding profitability to your hotel business.
There are a lot of free and premium tools available which can easily help you monitor hundreds of booking sites and competitor websites.
5. Demand Forecasting for your Hotel Business and mapping
Demand forecasting is a key yield management strategy for hotels. Yield management is a subset of revenue management that deals predominantly with profits and expenses.
The below image by Business Jargons explains the various ways Demand Forecasting can be done for your hotel business. These are a crucial part of effective revenue management strategy for all hospitality businesses. These are:
- Consumer Surveys
- Opinions Polls
- Trend Projections
- Barometric Methods
- Econometric Methods
and more.
The task is daunting for hotel businesses due to the dynamic nature and seasonality of hotel businesses across the globe.
However, there are a lot of demand forecasting tools, which would automate most of your task.
Various revenue management companies have dedicated software for the hotel industry.
This should make the task easier in the current era when AI is a top hospitality technology area exploring possibilities to reshape the industry.
6. Rate Fences and Benchmarking- A Key Hotel Revenue Management Strategy
This again is a part of the pricing strategy and promotion.
This is an inevitable part of the revenue management strategy in the hotel industry. It’s a normal practice of fences on rates in the hotel industry based on multiple parameters.
While a lot of hotels already use and know the importance of Rate Fences for revenue management, it is still underutilised.
There are a lot of hotel revenue management companies which specialises in these. A quick Google search would open for you a lot of such company options.
Same is the case with benchmarking.
The concept is extremely popular in business books but extremely underutilised in hotel revenue management strategies.
Conclusion
Here you go. Some of the useful revenue management strategies to help your hotel business grow at a faster rate.
The growth of technology in the hotel industry and elsewhere has ensured that we have sufficient options to automate most of these tasks we have discussed.
So, please explore the tools carefully, most of which would give a cushion of the free trial.
However, we must not forget that automation and technology are only as good as we are. Thus automation should be used as an aid only while devising the effective revenue management strategies for your hotel business.
