Top 5 Common Misconceptions in Hotel Revenue Management
March 8, 2021|Hotel Marketing
The hospitality industry is a very aggressive and competitive field. To remain ahead of the pack, know the businesses you are up against--what they do, how they do things, and what their weaknesses are--because this information will help your decision-making process. By considering your competitors' mistakes and failures, you can spare yourself from committing the same errors.
As the famous saying goes, know your enemy and know yourself, and you will always be victorious. But to achieve victory, you must avoid the following missteps:
1. Using the wrong metrics
Setting specific metrics to measure the business' performance is indispensable in any field of trade. It can provide reliable data which you can use in making important decisions. However, always keep in mind that not all businesses are equal. Not even hotels under the same chain are the same.
In making comparisons with other hotels, you must consider the market segment that you are serving. Only use comparable metrics that you can directly measure against each other. Comparing metrics like revenue per available room (RevPAR) and average daily room rate (ADR) is a common mistake when comparing hotels. Instead of putting them against each other, you need to understand how they work together to boost the business' performance.
2. Keeping outdated systems
Many businesses today are highly successful with the help of modern technologies and advanced systems. Being up to date is something that you should be open about if you want your business to stay and thrive in the industry. Don't allow your hotel to be left behind. Stay on top of the newest developments in equipment and systems.
Understandably, upgrading and improving can sound menacing and bothersome in the short term. But it's no reason to keep using obsolete methods. Not improving now costs you much more in the future and in the long run.
Now, in getting newer and more modern systems in place, you must also learn their features and maximize their use to help the business. Nowadays, the latest platforms, software, and equipment come with innovative programs that can be very practical when suitably used. Utilize them to measure how effective your marketing strategies are and efficiently gauge how well your hotel is doing.
Having all the advancements and not being able to use them to their maximum potential is a waste of resources. It simply becomes a lost opportunity to improve the hotel's performance. So, it is essential to adopt, understand and use the available technology as it is designed to be.
3. Avoiding third party booking sites
Another thing that you need to avoid is staying away from third-party booking sites. While it is true that you get more significant profits in direct bookings, never underestimate what third-party booking sites can bring to the table.
Many people now use online booking and rate-comparison sites when selecting the perfect hotel for them. Just imagine the opportunities your business loses every day if your hotel isn't on that list. The key is to set a perfect balance for these channels and never prioritize only one over the other.
4. Wasting time
This is true not only in the hospitality industry but for all things in general—never waste time. Although self-explanatory, there are still many points to consider in making the most of your time. In running a hotel, there are minor concerns, and there are those that require more serious attention. Being the hotel manager, you are responsible for overseeing the business and maintaining its organized system. You must avoid wasting time on insignificant details and always remember to delegate when needed. Being the owner/manager, you need to have the ability to recognize the not-so-significant concerns from the more essential things that require focus.
You are also accountable for ensuring that your marketing strategies are carried out while addressing trends and consumer demands. Likewise, to implement marketing strategies efficiently, you need to prioritize and learn how to let go of methods and practices that don't yield results.
5. Being reluctant to change
Probably the most important thing that you should avoid is being hesitant and avoiding change. When you are not open to innovation and change, it is synonymous with refusing growth and improvement opportunities.
Change may sometimes be seen as a risky gamble because it disrupts routine and puts you outside the comfort zone, but the truth is, there is more to lose in the future if you don't take that risk today. Not being willing to accept change is like saying 'no' to more income opportunities for the business.
Changes in the hotel setting can be anywhere from changing the hotel rates, upgrading and improving to a modern booking and database system, renovating and rebranding, etc. Implementing changes in the organization must always be well-thought-of and are evidence-based. It must not be solely based on assumptions and guesses.
Along with change, mistakes are bound to happen along the way. It is normal and should be considered an important part of the process. The key to making your mistakes work for your business is your ability to learn from past challenges and using them as bases for making well-guided decisions in the future.
If you're looking for more tips on picking the right metrics for your hotel and what you can do to increase your property revenue, call us at +1-888-999-8086.
1800 JFK Blvd Suite 300 PMB 91649
Philadelphia, PA 19103