NewsJanuary 30, 2020

Revenue Management for Hoteliers

By Varun Dewan, Founder and Commercial Director of Profitable Rooms 

Revenue management has evolved over the last decade based on the change in consumer behaviour. There is enough written about attention span of the modern consumer. Since the source of distraction is almost always in your pocket, the attention span has reduced from 12 seconds in 2000 to 8 seconds.

8 seconds is the time it takes to tie your shoe laces. This means that to grab the attention you no longer have the luxury of building context as no one will spend the time to read it. If you are a hotel business, your content, picture, description should be appealing and you better get your point across in less than eight seconds.

It’s a frightening scenario for the hospitality industry, where companies compete 24/7 for customer attention and more if the travel is planned online, thinking of customer traffic hopefully, leading to a booking. Customers today are conditioned to be impatient. It’s why we can’t fathom standing in line for longer than a minute or sweating out those three seconds on YouTube before we get to see the video we want to. Which is why hotel companies need the acquisition game to be thought through. In the attention span shortage, how do you disseminate your message in the most efficient effective way possible?

Hotels have to be available for booking with best rates, content, description, should be searchable and listed where their client go to book. This is the basic and from there on the social proof, reviews and ratings and facilities should tie up well. Hotel listings should display clarity directness, stickiness, credibility transparency and being real. If you can get your message end with all these distinctions, and make it real, all in a shot window, you will win customers. Technology stack should be used to help with revenue management, marketing and distribution coming together to make the clients loyal and products, should do justice to your listings.

Independent hotels do not have the luxury of getting bought over by chains. In the absence of this, you should use distribution technologies like channel managers to enhance your distribution network, take advantage of heightened conversion tools that a modern booking engine can help you with and keep your offer competitive by watching what the rest of the hotels are selling at.

Consider Marriott: Once its acquisition of Starwood is completed and has over 30 hotel brand-brands that are popular with developers and consumers, alike When you have all those arrows in your quiver, it doesn’t really matter where you shoot them; you are going to hit a lot of different things. However for a standalone hotel, this is not a possibility. Your only way to control attention is through distribution. Your message and your hotel must be in every place where consumers are trained to go. Like it or not, online travel agencies are as important a part of the hotel industry as late check out times and minibars. Eschewing them is not making a stand; it’s plain stupid. Until you have a plan in place where you can successfully drive 100 percent of bookings directly, without eyes going anywhere but brand.com use the OTAs, work with the OTAs and find a better more equitable way of doing so. OTAs are another delivery mechanism at your disposal platforms that generate millions of views and impressions.

Which brings us to Airbnb and other such aggregatirs like IslandRooms. A lot has been made of late about whether hotels should promote their inventory on accommodation-sharing sites like Airbnb. Let’s be clear: Airbnb is not a home-sharing site, per se; it’s a portal for finding available rooms. So, heck yeah, you should be putting your inventory on it. According to information from similarweb, Airbnb receives about 1,040,500 unique visitors and 7,749,835-page views per day. That’s close enough. OTAs and sites like Airbnb use you, the hotelier, to sell for commission for the unit or for inventory; use them for their eyeballs. That’ll get their attention. Use an expert revenue management consultant that can help you understand the market dynamics and prevailing rates. This way you will know what your acquisition strategy should be. A market expert can help you increase your RevPAR by upto 12% and is often contracted for success so it’s a win win.

Choose a partner to stay ahead in a world that is dominated by chains. Create your own mark.