The hotel industry has gone through many changes in the last decade due to technological advances and rapidly changing customer behaviours and expectations. How to increase hotel revenue and the bottom line is top priority. However, maximizing revenue opportunities is always a challenge whether you’re in high season or an economic crisis. So what are the key areas where you can maximize your revenue?
Continue reading for our list on top revenue boosting ideas to drive bookings and increase revenue right now.
1 – Understand your audience
Understanding your demographics and customer segments is the first tip on how to increase hotel revenue. Hotels should know who their guests are and cater to their different travellers’ personas. Understanding your different customer segments is more than just knowing their age and where they live. Personas should be thoroughly depicted by their lifestyle, income level, traveling habits, needs and expectations. For example: GenZ travellers now have the largest proportion of disposable income to spend on traveling. They prefer new, modern and tech savvy boutique hotels as opposed to large chains.
Tailoring your marketing and communications to each persona is also essential in understanding your guests. Having a hotel CRM can help you do this. Your CRM will also give you a wealth of historical information into your guest data from which you can build out your personas. You can see what time of year they like to travel, where they come from, how much ancillary spending they do and more. Knowing this will help you cater your messaging and offers to hopefully build loyalty.
2 – Provide world class service
Focusing on the guest experience is one of the most important things when thinking about how to increase hotel revenue. A positive guest experience means potential for repeat guests, positive word of mouth referrals, and free marketing on social media in the form of posts, videos and pictures, and reviews. First, you need to go back to #1 on this list and understand your guest. Use this data to deliver personalized experiences right from the beginning of the customer journey.
To follow up, collect and analyze guest feedback. Pro tip: make it easy to review with a short and sweet survey. Tripadvisor reported a whopping 53% of travelers wouldn’t book a hotel that did not have any online reviews. Happy guests leave positive reviews. However, an unsatisfied guest is more likely to leave a lengthier, negative review and share it amongst their network. Managing your online reputation is as crucial as ever as this is the main way consumers book travel. Find our article here on how to manage your online reviews.
3 – Hotel software is your best friend
If you take a look at the hotels and brands that are at the forefront of hospitality, you’ll realize that they all have something in common: they’ve invested in hotel technology and are innovating ahead of the rest. Software and tech has revolutionized the industry and it is clear that tech helps hotels achieve a significant ROI, automated mundane tasks, offer robust reporting, allow for better projections and forecasts, reduce operational costs, and grow RevPAR and occupancy rates (to name a few). This is only the start.
The limits don’t exist when it comes to how tech can influence your business. Start with what is essential to your business and develop a criteria and budget. Don’t be afraid to shop around and explore many options. You want a reliable software provider that’s easy to use, delivers and can scale as you grow your business.
4 – Identify what sets you apart and adapt
In life and in business, unexpected issues arise that may set you on a different course from initially planned. In hospitality, it is no different. Cancelations can happen suddenly as a result of things like natural disasters, political turmoil, new competition or a global pandemic. With that, businesses should always be on their toes and poised to adapt in any given situation.
To stay ready, you need to identify what makes your hotel special to customers. What do they like most about your hotel? What makes you different from your competitors?
Identify this and then communicate it through marketing.
Things to consider when planning: seasonality, events, changing laws, customer segmentation, demand, compset and other external factors are a must when pricing rooms to ensure you can project appropriately to increase RevPAR. Strategically planning ahead will allow hoteliers to push hotel bookings ahead of the market during fluctuations in the market.
5 – Incentivize you guests to book direct
With most people booking online, there are a few main options available including third party OTAs like expedia, meta searches like Tripadvisor, and most desirable: direct bookings. In an ideal world, you want clients to book directly from you, either through your website or by calling your hotel directly. This is because commissions can quickly pile up and can sometimes be as high as 20% of sale when booked through a third party. Getting more direct bookings is a sure response to how to increase hotel revenue immediately. Hoteliers are always strategizing on how to optimize and drive direct bookings.
Here are a few tips on where to begin:
- Make it easy to book with you. Invest in a well designed website optimised to get your audience to book directly. Include everything a customer would want when searching for a hotel: high-res exclusive photos, reviews, room tours, amenities, restaurants, menus, and local attractions. Also, ensure your website is optimised for mobile as 52% of global internet traffic comes from phones and tablets (statista).
- Next, incentivize people to book directly by offering something like a discount, or voucher. Leaving a gift upon arrival is also a nice touch and make sure to send them a thank you email following their stay. This is also an opportune time to ask for feedback as well as offer discounts and deals for their next stay.
- Installing a booking engine right on your hotel’s homepage will greatly benefit you and help simplify the entire process. Guest’s will be able to filter dates, room type, room rate, meals, add-ons and more.
Understanding your customers and investing in tech will build your resilience to a rapidly changing industry. This will allow you to build lasting relationships, reach new audiences, retain more guests, and drive your sales and revenues.