Effective ways to increase revenue and profit in hotels
Every host and hotelier faces the question of how to increase revenue without increasing prices or overspending. It can be difficult to see the bigger picture when you are involved in daily operations. Finding the right answers can prove challenging. There are many ways to increase your hotel revenues depending upon your property’s needs. Here are 15+ strategies to help you get started.
Create a road map
Before beginning your revenue strategy, it is important to understand where your business stands. This includes your bottom line, revenue streams, marketing efforts, and online reviews. It is important to know the cost of an available room to determine the best rates for planes and dates for promotions and group deals. It would help if you also decided whether you would invest your time and effort, particularly in OTA channels. This information will allow you to create a personalized and accurate road map to guide your sales strategy.
Although your road map does not have to be formalized, it should reflect the current state of your business in terms of revenue, finances, reservations, revenue and costs. This will allow you to plan for the future. Your road map and hotel business plan must be updated every year to achieve the best results.
Segment your target market
The key element of hotel marketing is to create guest personas that allow you to tailor your marketing campaigns accordingly. To understand your guests, their motivations for booking with you and the reasons they travel, you need to know how to best direct your marketing efforts. These questions will enable you to create guest segments and provide robust data for improving your sales activity and marketing strategy.
For example, your hotel might attract business travellers between 35-45 years old. This could be because your property is close to a convention centre which hosts many corporate events. This information can create unique marketing campaigns or paid ads highlighting your property’s location and targeting business travellers. You might notice that your guest demographics change depending on the season. This can signify that you need to add another guest persona and create a marketing campaign to target this specific group. Segmenting and creating targeted campaigns are strategic strategies that will help increase your hotel’s revenue.
The experience is worth more than the transaction.
Hotels need to highlight their uniqueness in a saturated market. You must highlight the best aspects of your hotel’s property on your website and social media so potential guests can begin their experience even before they arrive. Although it may seem difficult to do with a basic hotel, the key difference is offering a transaction (basic rooms and board) or an experience (unforgettable stay). You can do this by offering a service beyond the standard of design.
Your hotel can make a memorable guest experience a part of its value proposition. Your staff should be able to address the unmet needs of your guests and make sure they feel special. To promote your unique offer, you will need to have real-world proof or customer reviews. You’ll attract more guests to your hotel and increase revenue if you have something that sets it apart.
A Channel Manager can maximize your online reach.
How can you increase your online bookings? The hotel channel manager distributes your inventory to multiple Online Travel Agencies (OTAs) simultaneously and syncs your bookings to your PMS software immediately to optimize occupancy and avoid overbookings. You can also sell the same room to multiple OTAs like Booking.com and Expedia. TripAdvisor. Once a booking is made, the availability of the room will be removed from all other channels. Channel managers can help you connect rooms to a wider audience. This will increase your visibility and reach more people, resulting in higher occupancy and hotel revenue.
Although using a channel manager can be a great way of selling your room availability, the OTAs will charge a commission.
A Booking Engine can help you build your direct channel.
To counterbalance reservations made through OTAs, a booking engine can be used to increase direct bookings. These bookings are free of commission and processed directly from your hotel website. Visitors can book their reservations online via a booking engine or social media channels like your Facebook page. Optimizing your hotel pages for SEO to drive maximum direct traffic to your site.
Integrated booking engines make it easy for potential guests to book their rooms or add-ons such as room upgrades, late checkout, breakfast, etc. Cross-selling opportunities should always be taken advantage of on your website.
To ensure guests are satisfied with your hotel’s legitimacy, follow up on direct bookings with a confirmation email. Send communications closer to check-in as a welcome message with specific instructions.
Local businesses can partner with you.
Your hotel can also generate more revenue by establishing strong relationships with local businesses.
Start by researching local businesses to see if they might be interested in a co-marketing arrangement. Many businesses and organizations can refer you to your accommodation. These include small travel agencies, tour operators, schools, and conference centres. You might be able to make a deal with them where they will recommend your property for a commission.
Next, increase the number of package options available at your hotel. You can also advertise your hotel’s partnerships with local tour operators and offer additional services. Collaborating with local providers and creating innovative packages can create new upselling opportunities.
Dynamic pricing is a great option.
No matter your hotel type, it is important to review your pricing plans and occupancy forecasting. You should be able to adapt to changing market conditions and respond accordingly. Dynamic pricing is a great way to help.
Dynamic pricing is a practice in the hotel industry that uses flexible pricing to price a room or service. It is based on market demand and can be used to increase the cost as the demand grows. Dynamic Pricing in Revenue Management’s basic idea is that a hotel or hostel room will be priced according to supply and demand. To capitalize on ADR, room rates should be raised when there is more demand than supply and decreased when there is less demand (to increase occupancy).
You can improve your estimates by keeping up to date with the latest events. This will allow you to maximize your revenue potential, particularly in the off-season. You can also keep track of competitor pricing to help you predict demand and give yourself a competitive edge when adjusting your price.
Your website must be mobile-friendly and responsive. 63% of travellers believe that using smartphones to plan their trip or book accommodation is very important. 58% use them for this purpose. A mobile-friendly website is essential if you want more bookings and to increase your hotel revenue.
Consumer expectations are changing due to the widespread use of mobile technology. Mobile pages should not resemble your original website. Mobile sites should have unique designs. The mobile experience must be fast, simple, and personal for Gen Z and Millennials. Your hotel’s occupancy rate will grow if your website is not optimized for mobile.
Up your digital marketing game
It would help if you covered all digital marketing channels. First, ensure your information is up-to-date and accurate wherever possible. Modern travellers can search your business online for reviews and specific information. To see the property’s details, search for it on any search engine.
You can also use digital marketing tools to your benefit. You can create engaging social media campaigns, use TikTok as a social media channel, or send emails to returning guests and corporate partners.
You can get the most from your social media channels by tracking metrics like reach, engagement, and impressions. This will help you to determine which strategies are working well. To ensure that your digital marketing campaigns are successful, you must continue to test these and improve them.
High-quality visuals are a must.
High-quality photos are the best way to attract potential guests. Your property’s images can visually tell a story and encourage guests to book. According to research, 67% of consumers consider detailed images more important than long descriptions (54%) and customer ratings and reviews (53%). Low-quality images will be rejected by many OTA websites, making it more difficult to get your listing approved.
Potential guests should be able to visualize themselves in your photos. This will increase the number of people who are interested in your listing as well as your revenue. Visual Web Optimizer’s study showed that larger images increased hotel bookings by 9.46%. It’s important to remember that images have a greater impact on direct sales than quality.