By Katja Ruethemann, co-founder and director of Askalu Consulting
The single biggest reason why a hotel must shut down is the lack of money! So how does one increase revenue?
Source of Business
For a lot of hotels, the budgeting planning period has just completed, your revenue targets are set. Now you must decide on what selling channels you will use.
• Big Travel Agents have now just closed their doors,
• Online Travel Agents (OTAs) will charge you a hefty commission on each booking.
• Corporate bookings reserve during peak days,
• Your hotel website has the best and lowest rates, but only gets a few bookings a month
For investment, the key strategy is: Spread your risk.
Spreading the risk in selling would not only mean working with different country agents but also with different sales channels.
Use the channels to your advantage, OTA websites are translated into over 70 languages and can bring you ‘new’ clients – make sure to collect the contact details and ensure these clients book directly next time.
Revenue is the result of strategic control over inventory and rates. In hotels, inventory can include everything from standard guest rooms to the spa and even F&B items on the menu. If a spa room has the possibility to book for 2 people, offer a single rate and a slightly better double rate. Same with guest rooms have it pre-loaded or tell the travel agent how many people can stay in each room with a supplement. Demand for Family rooms is quite high, so adapting your rate structure to meet this can be quite beneficial.
44% of Millennials travel with kids – update all channels with your maximum occupancy.
Any guests that are not able to book with you should be put on a waitlist. In case you have a last-minute cancellation, you can contact these guests.
Yielding rates are nothing new, the fish & vegetable seller is yielding the rates fare before revenue or yield management existed. The technique of the market seller is when demand increases the rates to go up. For example, on Valentine’s day, the red roses double in price. The advantage we have in the hotel business is we get advance bookings. Accordingly, to the location and the geographic mix of the hotel, we can plan in advance & increase the rates or work with restrictions.
The opposite is also the case, review when last year’s performance was low – implement any promotions as early as possible, so you can ‘steal’ business from your competitor, do not wait till the last minute. Modern hospitality systems and technology can help to facilitate task execution. Revenue yielding systems can be purchased for as low as $ 43 a month. But the technology is only as good as your team who manage it. So, ensure your team is constantly trained so they can use all the revenue tools and systems in the best way.
2. Happy Guests:
Speak to your guests frequently this helps to personalize the service for the guest or do upselling of guest services and get regular feedback to fix any service lapses encountered during their stay. This will help improve and keep guest satisfaction high. Plan ahead, listen to the guest, manage your inventory and rates and revenue will increase.
Having worked for over 18 years in the hospitality field as a Revenue Manager, focusing on eCommerce and Reservations. Katja has been one of the founders of Askalu Consulting is a leading, international, commercial hospitality partner in the fields of Revenue, Reservation & Online Distribution growth. Providing clients with impactful yet sustainable solutions and insights to aid in their growth within the sector.