A Sustainable Plan for Increasing ADR
By Marcela Trujillo Senior Revenue Consultant, Total Customized Revenue Management | September 15, 2019
This article was co-authored by David Beaulieu, Director of Client Services, Total Customized Revenue Management, LLC
Everyone is looking to bring profitability to the bottom line with increased ADR. It is no secret that increased average rate plus the correct amount of occupancy equals optimal RevPAR. Achieving and maintaining that ADR for long-term financial success, however, requires more advanced techniques than the short-term tactic of merely stealing share from competitors.
It takes planning and proactively managing strategies to gain the advantage in reaching that rate and staying ahead of the market. There are a variety of ways to set a plan into motion to attain and maintain that elusive ADR advantage.
1. Building Base of Business
Lead into sustainable ADR growth by building an adequate base of business. Revenue Management Teams need to be looking far enough into the future to be proactive in layering in business ahead of the competition. Look into offering great deals in a longer booking window, allowing the property to start building that base. The further the team is looking into the future, especially during known times of need, the better. By the time the competition even begins to look that far, the property will have already gained the advantage in occupancy, which will then allow for yielding rate.
In addition to great advanced-purchase deals, communication with the Sales Team can provide need dates where they can be more flexible with group rate offers. In the long run, building a base of business is a key tactic to gain ADR.
2. Shifting Market Segmentation