Revenue maximisation is a central, year-round responsibility for all revenue or property managers.
But it’s especially tough during periods of low demand, when you need to come up with creative solutions to attract guests. At these times more than most, preparation is all-important.
By analysing your market and its fluctuations, you can anticipate upcoming trends and adjust your strategy accordingly, perhaps using a benchmarking tool such as STR.
The law of supply and demand applies wherever you are, but specific situations change. Business properties in the northern hemisphere experience lower demand during the long summer break in late July and throughout August, while holiday properties in the southern hemisphere are less busy during the same period.
This is a fact of life for hoteliers but with the right strategies, you can make low season more lucrative than ever before. To do so, it’s important to remember: don’t be a follower, be a game-changer.
Here are some detailed tips; some familiar, others perhaps less so.
As with many aspects of the hotel industry, collecting good market data is key.
Good data and strong analysis will provide actionable insights that boost revenues at your property, no matter what time of year it is.
Some of the key data points to look at include:
This applies all year round but by structuring your data queries to focus on key periods that need a boost and using the best revenue management tools, you can act with confidence.
Data analysis can be hugely time-consuming unless approached strategically.
Being aware of the competition is essential, but don’t be fooled into following their lead. Think of the prisoner’s dilemma from game theory and consider the mutual benefits of keeping rates high.
Slashing rates could encourage your compset to do the same and result in significant losses at some properties. Strive to be the game changer in your market, rather than believing that your compset is on the right path to maximising revenue - and remember: it’s also low season for them.
Rather than the risky gambit of reducing rates to boost occupancy, look at period-specific factors such as these to inform your pricing strategy:
The right data should:
Following on from that last point, guests who book at rock-bottom rates are unlikely to splash out on spa days, luxury dining or experiences that would bring in ancillary revenue, and your brand perception could be damaged by badly targeted messaging.
Instead, use yield solutions to develop your pricing strategy and send targeted value-added offers to specific market segments. Here it’s important to understand when price and value affect customer conversion so you know how to price for certain customers at specific times.
Look into which geographical source markets your bookings come from at certain times and target those customers with specific promotions on national holidays, which is simple for Rate Insight users, thanks to our built-in events calendar.
You could also create packages including tickets for upcoming major events in your area, or put together cultural packages with tickets to museums and theatres.
Other possibilities include upselling to room types that include balconies or ocean views during the booking process, or sending pre-stay promotions via email, such as luxury airport pickups for business travellers or those traveling for a special occasion.
It’s also worth exploring seasonal partnerships and put together special deals with local companies and venues, such as festival organisers or conference centres. But be careful to ensure that they fit with your brand.
The more personalised you make your offers, the better. Overwhelming every visitor to your site with a full raft of offers will create friction and could impact booking rates. Personalisation is a better strategy.
By combining the information in your revenue management system (RMS), property management system (PMS) and a rate shopping tool, such as Rate Insight, you can drill down to the relevant data quickly and efficiently.
Collaboration is all important if you are to achieve results, and combining the inputs of different teams using a digital solution will help you come up with actionable goals.
As discussed above, developing specific offers based on good use of data is incredibly important for revenue maximisation. Personalisation is key and the success of these offers relies on close cooperation between revenue managers and marketing managers, who will be responsible for developing a plan to get the right offers to the right guests. They will also be able to propose partnerships that will help your property deal with upcoming trends that can affect booking rates.
Managers could also change their distribution strategy to drive direct bookings, for example by offering deals that are accessible only to members. Not only will this increase revenue, but it will improve the quality of guest data. The same can be said for encouraging guests to join loyalty schemes using incentives such as extra points or miles.
Making the best use all of this data can increase workload for already overstretched teams, but systems such as those developed by OTA Insight provide actionable insights with minimal effort on your behalf.
Discover how we can help you generate more revenue and improve the bottom line of your property.