Revenue Management Tips on How to Increase Hotel Income & Profit
November 16, 2020|Hotel Marketing
Here are general tips on how to improve the hotel’s revenue:
1. Monitor the hotel’s unconstrained demand
The hotel’s unconstrained demand refers to an estimate of the total demand of the hotel. It measures how many rooms can be sold in a given day if the hotel had totally unlimited capacity. For example, when demand is high, such as Christmas, the hotel’s unconstrained demand will likely be higher than the hotel’s capacity. This means one can increase their prices to maximize revenue.
2. Forecast overall demand
Another way to increase hotel revenue is by forecasting overall demand. By predicting how many guests the hotel is likely to receive, management can plan ahead and change their prices. If last year, the demand increased during a certain period, management can learn from this and increase their prices accordingly. It’s alright to make mistakes at first, as long as management learns from it, as this will help optimize the hotel’s revenue in the long-term.
3. Turn unused spaces into more efficient rooms
If the hotel has unused spaces or spaces not used to its full potential, such as meeting rooms or lobbies, management can think about turning them into co-working spaces or even turning the meeting room into a private events room. The possibilities are endless as there are many creative solutions available, depending on the hotel’s location, size, and type of guests that the hotel attracts.
4. Increase one’s knowledge of the hotel market
Knowing the market is a necessity when it comes to managing a successful hotel. Management should identify the hotel’s unique selling points by analyzing strengths, weaknesses, and any new opportunities for the hotel. With this, management will be able to target the potential guests and attract them more. It is also important to stay in touch with the current trends of the market and be one step ahead of the guest’s needs and wants.
5. Diversify the hotel’s room types
A hotel can attract many different types of guests, such as millennials and families, so it’s important for management to offer different types of rooms with varying sizes, functionalities, and layouts. Management can also change the room names to make them sound more appealing to different types of guests.
6. Cancellation policies
If many guests cancel their bookings at the last minute, hotel profits will go down. Management can either choose not to allow cancellation or charge a fee for cancellation. Either way, it’s very important to reinforce the hotel’s cancellation policy, making sure the hotel can rely on the guests’ reservations.
7. Feedback and reviews
The hotel’s reputation depends on the reviews the guests leave after their stay. Reviews are read by potential guests in the future, which means they have a big impact on the hotel’s demand. Answering these reviews, whether they are positive or negative, is a good way to improve the hotel’s reputation. It shows that the hotel management cares and acknowledges the opinions of its hotel guests. Hotel management should also apologize and professionally respond to the negative reviews, and more importantly, try to fix the issues raised by the guests. This will reassure the future guests that the hotel management is working hard in trying to make their future stay as enjoyable as possible.
8. Social media platforms
Social media platforms are a great way to reach the potential guest. However, it is important to know how to use them by developing strategies and staying consistent. Once a platform is chosen, management has to decide when and what to post. The post should be scheduled according to the information the hotel wants to share.
9. Upsell the hotel
Upsell the hotel by using the right tools. This will encourage the guests to spend a little bit more when they come to stay with the hotel - either online or in person. For example, management can offer room upgrades on the website or in the hotel reception desk as soon as the guests' check-in.
Similar to upselling, cross-selling will help the hotel to increase its revenue by offering complementary products to the guests, such as spa visits, excursions, and other activities, depending on the hotel's location and the type of guests that the hotel attracts.
Lastly, utilizing technology is a great tool to increase the hotel's efficiency. For example, organizing reservations and managing revenues will be faster if the hotel uses the right systems. However, human interaction is still very important in the hospitality sector so hotel management should not over-rely on technology.
In summary, these are just a few of the many ways the hotel can improve its revenue. Should you need assistance or more information, please do not hesitate to get in touch with us at email@example.com or calling 888-999-8086.
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