Contributed by Sarah Jones, Director of Revenue Management and Special Projects, SHR

best revenue strategy

With so much information swirling around the best ways to run your hotel business, figuring out how and what you should be focusing on when you are marketing your main physical commodity—space in your hotel—can be frustrating. Should you be selling by the room type? By the room rate? Considering that the guest is the most crucial and fragile piece of your marketing puzzle, and that selling by rate alone can push you into nothing more than pricing wars with your competitors, leading to a lack of pricing integrity, you need to look beyond just enticing rates if you are to have long-term success.

Remember to Tell Your Hotel Story

Each hotel is unique to its location, style, and features. Playing up this uniqueness is essential to engage potential bookers. This goes beyond just keeping up with the Joneses, or in today's market, the Airbnbs of the world. Guest overnight accommodation choices are expanding within today's sharing economy, and the increase in limited service properties is creating more unique competition for today's hoteliers. Because of this, you need to ask yourself, how do your property and room type options fit into your larger market? Also, how does your property compare with various competitor occupancy levels or bedding options? Beyond the traditional competitive sets with similar properties, can your hotel dip into other areas to shift the guest share back toward you? Remembering to make the most of your market by altering your offerings to fit special seasons or even days of the week can also help hone your revenue strategy even further.

Do You Have the Right Room Type Mix?

room rates

It might seem obvious to say that we need to be working to maximize revenues. But, as hoteliers, this is a tricky one since guests want choices, and yet they don't want or need to be overwhelmed with those choices. Clear differentiators between room types and how you showcase those differentiators to the guests in the booking process is key. For instance, even if your hotel has standard room sizes and features, adding custom services, or even increased booking flexibility could make the difference in a guest either booking, or not booking.

Check Your Systems and Processes

Hospitality technology is changing so quickly that no hotelier can afford to be complacent. Every hotel needs to do regular reviews of the guest booking journey not only of their hotel website, but also of competitor and third-party sites. Ask yourself, are your descriptions easy to read and do they convey features quickly? Do the images used to sell the room types reflect the choices clearly? You also need to look at how your hotel's website booking engine displays all of the choices. Are they grouped together with like amenities, or are they listed out page after page, forcing guests to tediously scroll through? This is where a truly flexible booking engine technology with room displays that can change images seasonally and sort room types can really come in handy.

What Does the Data Show?

booking engine

When analyzing revenue by room types, opportunities become more apparent, but you have to really hear what your guest data is saying. For instance, determining which types of guests are using the upgraded room types now will help identify where opportunities lie—or do not lie—in the future. Your goal is not to be everything to everyone. The data analytics you pull from your system can assist with a strategy that helps form better patterns for your hotel in your efforts to cater to your unique guest. Dig into your revenue data by room type just as you would by market, source, or other metrics. Are guests buying the higher room categories, or are they primarily being used for loyalty guest upgrades, group incentives, or general overflow on the arrival date? Is the guest "choosing" the upgraded room type, or are they expecting it, or do they end up there by default? Also, check out what your guest surveys or website analytics are showing. Are guests clear on what room type options are available? And don't forget to take note of occupancy inquiries. By really looking at all your data in these ways, it's more likely that you will be able to capture and steer the demand going to the sharing economy or suite-focused properties back toward your hotel.

As with many best practices and strategies, finding the middle ground, or the sweet spot, requires that you first have a thorough understanding of your unique business model and market. Asking—and answering—these key questions about data, habits, market, and competition can set you on the right path towards your most productive and sustainable revenue strategy.

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