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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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.