Hotel Revenue Management Trends That Increase Total Profits in High Times

By Lily Mockerman Founder, Total Customized Revenue Management | July 01, 2018

Driving profitability during high seasons has to be one of the most enjoyable tasks for a seasoned and analytical revenue manager, but it can also be one of the most challenging. In many cases, when starting in a new position, a revenue manager may be able to find low-hanging fruit and capitalize on some of the basics like establishing group thresholds, raising rates to be more competitive to the market, and reviewing transient offers.

However, with occupancies at record levels and ADR's continually growing across the market, some properties which quickly action these basics may find themselves in a bit of a stagnant period. Perhaps certain patterns or seasons are consistently running greater than 95% occupancy, or there has been backlash in guest reviews when attempting to raise BAR more than in the past. Hoteliers may also find that they are raising their sell rates but struggling to fill, leading to the need to use promotions that the competitive set might not be offering just to reach market levels of occupancy over compressed patterns.

In scenarios such as these, the revenue manager must then take on the role of diagnostician, delving deep into the property's strategies and the resulting business to truly understand the best way to increase overall profits. Hoteliers nearing high season should consider new approaches to their demand in order to maximize profitability. This begins with a strong understanding of unconstrained demand by day of week and segment in order to best select an optimal mix. Additionally, reviewing length of stay and ancillary spend by segment can offer further insight into the best channels and segments to select.

Armed with this information, hoteliers can identify those times that have significantly higher unconstrained demand and begin to limit some of the less profitable channels and segments, whether through length of stay restrictions, group spend minimums, room type restrictions or others, depending on the unique situation of the hotel and market.

5 Top High-Demand Strategies

1. Review BAR performance vs. other rate offers

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.