How to sustain a high occupancy hotel? | Hotel Marketing
September 15, 2020|Hotel Marketing

When hotel owners and investors look at their revenue management reports and compare them to the competition, they usually wonder why their occupancy rates are not up to par with competing hotels.

If we break down the market segments of these high-occupancy hotels, we will most likely see that the reservations that keep their occupancy high are not coming at their best available rate. They will have some base business that they negotiate at a much lower rate. On top of that, they may have higher rates for their direct bookings, third-party website bookings, walk-in guests, and franchise loyalty guests.

You cannot get 90-100% of your occupancy throughout the month just from one market segment at your best available rate. You need large group accounts if you want to produce a lot of sales volume. These accounts usually have the leverage to negotiate lower rates by shopping around in the market. While they are not bringing you a higher average daily rate (ADR), they are driving some sales volume to your property, which gives you the confidence to increase your rates for other market segments as a way to balance it out.

A lot of the properties that are struggling with their occupancy rate still do not feel very comfortable getting these lower-rate accounts to build their base business. It is bad practice. You need to diversify your business sources, market segments, and the rates associated with each one. The key is to achieve a healthy mix so that ultimately you keep your occupancy rate and ADR up.

Remember, you want to find out how low of a rate you can afford to book large group accounts in advance without hurting your ADR in the future. Be mindful of seasonality and peak demand rates when you allot your rooms to this segment. In contrast, you can push higher rates for other guests, say your transient guests, who are short-term visitors and are unlikely to give you repeat business.

If you would like help in increasing your occupancy rate, or in setting up your revenue management strategy, call us at 888-999-8086 or email us at support@bezla.com.

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