Optimizing Revenues from Your Hotel Guests

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | June 23, 2013

Hoteliers spend a lot of time and money researching, marketing and trying to attract new guests to their hotel, all in order to boost revenue. While growing your customer base is critical to ongoing success, hoteliers should also make sure they are maximizing the money they make from existing guests.

The path to sustained profitability and growth in this current competitive climate has taken a turn for hoteliers around the world. While room revenue still makes up a healthy part of a hotel’s total revenue and will always be a strong focus for revenue managers, retail, food and beverage, spas and entertainment are becoming increasingly important sources of income. Progressive hoteliers understand these factors play a big part in a hotel’s ability to maximize and optimize revenue. To help ensure a hotel is making money from its current customers, it is vital hoteliers understand and qualify their guests so they can use the most targeted and effective strategies to maximize revenue through up-sells and promotions.

Optimizing revenue through ancillary services is still based on the core elements of revenue management, such as selling the right products to the right customers at the right time etc., based on accurate demand forecasting, pricing and an individual customer’s preferences. Through using revenue management software, as well as effectively using staff across the hotel, from the front desk to the marketing department, it is possible to package and promote targeted offerings that expand beyond room rates and optimise revenue, as well as guest satisfaction and loyalty from existing customers. This emerging practice, which encompasses a holistic approach of maximizing total revenue from a guest, rather than just optimizing room revenue, is becoming known as total revenue management.

Qualifying Guests

To effectively carry out total revenue management it is vital to have a heightened understanding of individual guest preferences. You need to understand what a guest wants – is it spa or drinks before dinner? It is also valuable to know what a guest’s plans are during their stay and the reasons they are staying at your hotel in the first place. By understanding what each customer from any given market segment is likely to use, you can make better decisions about which customer should receive that last available room, who should be offered free or discount breakfast options or complimentary spa treatments for a limited time, etc. to drive demand in low periods and maximize revenue during a guest’s stay.

While many hoteliers have good intentions of using market segmentation and total revenue management principals, once a guest enters the hotel these can often go out the window. Duplicate profiles and data accuracy errors can make it difficult to give guests exactly what they want or prefer, and more often than not blanket offers will be given for all guests. This is a common mistake and can lead to a number of issues, from giving away products when it’s not actually necessary, or it can even put guests off your hotel, annoying them with offers and promotions that are of no interest to them.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.