A hotel jam-packed with people doesn’t always govern success. The hallmark of a profitable business in the hospitality industry is revenue. As bizarre it may sound, but managing your health and managing your revenue are the path to the same street. You employ an effective strategy; you get results.
Hotels deploy several revenue management techniques & practices to surge the bottom line. This article provides you with the top 7 actionable tips, which can equip you with a blueprint to maximize your hotel’s revenue.
1. Know Your WHY
Things start to fall into place when you know the cause of action better than the course of action. If you want to cultivate loyalty in your customers it’s crucial for you to clearly understand and communicate your WHY.
Every company knows WHAT they do. Most of them know HOW they do WHAT they do. Whether you call them a “Differentiating value proposition” or “Unique Selling proposition” But very few companies can clearly articulate WHY they do WHAT they do. By WHY I don’t mean money – that’s a result.
By WHY I mean what is your purpose, cause of action? WHY does your company exist. Companies try to sell people WHAT they do, but they WHY they do it.
Quoting Simon Sinek here: “When communicating from the inside out, however, WHY is offered as the reason to buy and the WHATs serves as the tangible proof of that belief”.
So, WHAT you do is the external factors, but WHY you do it is something deeper.
2. Truly Understand Your Market
The first step of paramount importance is to define your hotel’s target audience. Who is your customer, which category of guests you mostly cater to, what is their buying behavior and so on.
Identifying a target market and building a customer profile enables you to pinpoint the needs and wants of your current and potential customers. That said, it translates to new opportunities and vulnerabilities to your hotel.
These insights provide you with a foundation to establish your hotel’s USP(s) & keep up with market trends which eventually secure you a competitive advantage over peers.
With this hotchpotch of knowledge, you can easily seize the opportunity to over-deliver and bring more value to the table.
An effective practice to keep a check on competitors is benchmarking. This facilitates you to gauge your competition according to price, locations and distribution channels.
This way, you can cut through the noise & constantly offer superior value. Remember, Price brings repetitive business but value cultivates loyalty among customers.
The only way to win in this industry is to shape up the identity of your hotel around consumer’s expectations.
3. Leverage Social Platforms
In this digital era, Social Media platforms are the go-to options to precisely reach your target audience. If your business is not leveraging this resource, you are leaving an enormous amount of opportunity.
Social Platforms like Facebook, Instagram or Youtube allow you to run ads at a relatively low cost yet deliver an outsized ROI. There are endless options to share promotional content online for free.
At the very outset, Allocate a budget for Digital Marketing & decide which channels to penetrate. Most business owners confuse Digital marketing as an expense, in fact, it’s an investment towards growth. That said, start creating compelling content around your hotel’s niche. Content leads to awareness and exposure for your business which ultimately translates to profit and customer acquisition. Most of businesses now use SMM for brand building.
In the wide array of marketing options, Influencer marketing is considered as a popular option to build trust and generate conversions.
The strategies you implement and the technology you deploy to increase hotel revenue may differ predicated on your goals. However, it’s essential to use social media platforms to their fullest potential to grow your business.
4. Foster Direct Bookings
Gone are the days of dominance of local travel agencies. It’s a digital play now, Online travel agencies (OTAs) are the biggest booking channel for hotels. OTAs play a significant role in bringing guests and easing their way throughout by serving a number of functions like offering incentives, discounted prices or ratings.
However, a rule of thumb is; “lessen the friction, better the profit”. For any hotelier, Encouraging travelers to book directly can be the most rewarding but challenging shift at the same time.
Decreased spending on OTAs results in more revenue. After all, 20% saved is 20% earned!
Keeping this simple fact in mind
The most important distribution channel is your website because it eliminates the third party & allows you to build a direct relationship with your guests.
There are some proven ways to increase your direct booking given as follow:
- Optimize your Hotel’s website SEO
- Reward your guest for direct bookings
- Make your site optimum for Mobile phones
- Showcase positive guest reviews on your website
- Offer Loyalty programs
5. Gain Essential Feedback
According to a survey: “80 percent of travelers read at least 10+ reviews before making their decision”.
Online feedback can make or break your hotel’s reputation. The only way to cut through the competition and grasp the most beneficial reviews is to actually care about customers’ opinions.
When you take the time to regularly respond to their feedback even if it’s negative they are more likely to perceive it as a positive gesture.
Constructive feedback also lays out the opportunity to improve your system according to guests’ needs. Simply put, You get the feedback when you ASK for it.
One of the best ways to do so is to send a post-stay email with a request to leave a review in the exchange of a discount or ask it personally during their stay. Here’s the good part humans love sharing their opinion.
6. Apply Exceptional Upselling
Upselling is an exceptional way to increase revenue. You can upsell the simplest things from Netflix to room services. Just think out of the box and find ways to provide more convenience to the customers. And they won’t mind paying a bit extra for a better experience.
Ancillary revenue can be generated both online and offline. Online upselling works by offering service or room upgrades. Offline it works by offering extra add-ons.
If you have a restaurant or spa make sure guests use it. Luckily, If your hotel is based in a popular tourist destination, you can coin it in multiple ways.It all boils down to how you communicate your traditional or seasonal services such as foods. Go the extra mile to encourage customers to buy more interchange to the value you offer.
Local festivities and national events that re-occur each year are essential to keep in mind. Price your services accordingly, to capture the high demand at the right time.
Therefore, make sure to optimize these occasional opportunities to their full potential.
7. Entice Niche Markets
“Jack of all trades, master of none” is not different than trying to seize the entire market. Whereas, playing in your field can help you excel in a particular niche. Enticing to a specific group of people unlock a number of ways of increasing revenue and customer acquisition. Identifying your micro-niche enables you to streamline all of your efforts in one direction. This way, you can capitalize on a particular demographic.
Interestingly, Dominating a niche market also differentiate your hotel from the competitors. Hence, serves as a USP.
Hope that these 7 tips give you some powerful insights to elevate your hotel’s revenue. In the end, it all comes down to constantly testing strategies and finding the best action plan for your business.