Managing multiple hotels can be tricky, as you need to ensure each one contributes revenue to your overall bottom-line. Each property should be treated differently—tactics that might yield a good profit margin for one location won’t necessarily yield results for others.
We’ve partnered with Duetto, an industry leader in revenue strategy technology, to offer five strategies that can help you understand and maximize your revenue management for each property.
1. Establish Market Segments
Your hotels may attract different types of guests, depending on where they’re based. Instead of trying to appeal to everyone, try dividing your market into more specific sub-markets or “market segments”. If one property is near a theme park or tourist attraction, your main audience may be families and young adults who are visiting for leisure purposes. If another property is located in the same city as a major annual business convention, your focus will be geared towards business travellers.
For each market, think about which amenities would be most appealing and which keywords prospective customers might use when searching for accommodations. These factors will help you create more targeted online ads and email campaigns to direct your prospects to the location that’s most suited to their interests.
2. Use an Open Pricing Strategy
Offering different price points for your hotels means that guests can choose your brand based on the price they prefer. An open pricing strategy allows hotels to maximize profit by making precise pricing decisions that reflect each location’s demands. There are a few considerations to take into account with an open pricing strategy:
- Room type: Pricing rooms based on demand, rather than using fixed modifiers to differentiate room prices, will allow you greater flexibility and adaptability. For example, if a hotel has less demand for double suites, you can maximize your occupancy by offering these rooms at a lower price.
- Discounts: Rather than provide a static percentage off your Best Available Rate (BAR), you can set more flexible discounts. For instance, you can offer “up to 20% off” on room packages, and see which rooms perform better.
Using a predictive analytics platform, like Duetto, can help you establish a better open pricing plan to land more bookings for your properties.
3. Move From Revenue Management to Revenue Strategy
Revenue management involves much more than simply tracking inventory and pricing rooms. By shifting focus from revenue management to property-wide data-driven strategies, you can influence revenue across all departments, including sales, marketing, e-commerce, distribution and loyalty.
Creating strategies where these key players work together and have access to the same data sets will allow you to make decisions that drive the bottom-line. By shifting focus away from top-line revenue, you can aim to optimize your net revenue, which takes into account the ever-increasing cost of customer acquisition.
4. Incorporate Lost-Business Data into Your Revenue Strategy
If you’re only looking at the information you acquire from guests, you’re missing half the picture. Consider visitors to your website that don’t make a booking. Did they leave because your properties were full on the nights they wanted? Or were the prices too high?
Tracking visitors who visit your website without booking a room will provide you with a better view of your hotel chain’s true demand. Through your hotel website’s analytics, the data you collect can help you test new rates and other promotions to understand what incentivizes guests to book, and which offers are most profitable.
5. Share Metrics With the Right People
Your hotel metrics cover a lot more than just revenue. They can show you what actually makes your properties successful, whether it’s your occupancy rate, number of guests who stay multiple nights or number of returning patrons.
Your revenue team will be able to accurately analyze and forecast performance when they have access to your entire portfolio. Be sure to share reports of all your properties with relevant decision makers, including your general managers and both property-specific and regional Directors of Revenue Management (DORM). With access to real-time data, your team can take a more strategic and productive approach to maximizing revenue.
Overall, having a comprehensive view of your multi-property portfolio can help you focus on boosting revenue for each location. You’ll gain a better understanding of why your guests stay at your hotel and what they expect, so that your efforts can go towards a healthy bottom-line for your hotel brand.
Knowing when to make a pricing adjustment can help you boost your hotel revenue. Learn about five strategies that can help you identify the right time to change your pricing scheme.
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