You’ll probably agree that capturing revenue opportunities is more important now than ever – especially with costs increasing in every area of hotel operations and demand only just recovering.
NB: This is an article from Atomize, one of our Expert Partners
Otherwise your property’s profitability could take a serious hit and its long-term business success may be at risk. Luckily, there are many things you can do to capitalize on demand and get your hotel through these times successfully.
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Go through the following six points to see how you may be leaving money on the table and how you can easily turn things around.
1. Setting rates manually
While manual rate setting used to be the only option, today you should think twice about sticking with it. Yes, it gives you maximum control of your rates. But it also costs lots of valuable time. Particularly if you have multiple room types and you want to price dynamically, the time spent on market research and manual system updates quickly gets out of hand.
If you simply can’t make room for this task every day, maybe you only update your prices once a week, month or season. While that saves time, it also makes it impossible to ensure that rates always reflect the latest market situation. As a result, you risk losing bookings during low season and selling too cheap during peak demand phases.
2. Lagging behind market shifts
You may have already decided to use an RMS to help price your rooms and free you up for other tasks. That’s a good start. An RMS’ optimized rate suggestions can help you capitalize on more revenue opportunities that come your way.
But does your RMS update rates automatically in real time? If not, you’re still not taking every chance to maximize your revenue. Why? Because today demand can shift so fast, if you don’t make rate changes in lockstep with the market, you’re still missing opportunities. On the other hand, if you keep up with market developments, you can see fantastic results. One property in Sweden was able to boost its RGI by 47.3% once it started leveraging automatic real-time rate updates.
3. Not considering market demand data
Which data do you look at when setting your rates? Is it your pick-up? Or maybe your on-the-books business? Or perhaps your compset’s prices? If it’s all three, you’re on the right track because they’re important for building a well-rounded revenue management strategy. But don’t stop there.
Have you considered also taking flight search volume, search pressure and source market behavior into consideration? While these data points can be hard to collect, they’re extremely valuable when shaping pricing decisions because they give you a bigger picture of the market and developing demand.
Unfortunately, this type of data is impossible to gather and use in real time due to its volume and complexity. For that, you need a business intelligence tool that can gather the information and present it in a concise and easy-to-read format.
Ideally, you’ll have an RMS which automatically incorporates these forward-looking data points into its price recommendations and updates. That makes an even more refined pricing strategy possible.
4. Looking at competitors too much or not enough
Compset analysis is an important part of market analysis and pricing. But it’s important to find the right balance between looking at your own, market and competitor data. Following your rival’s price changes blindly is never a good idea, no matter if they’re adjusting up or down. They might have special circumstances that don’t apply to you, e.g. they just won or lost a big group.
But don’t ignore their rate shifts either. That can lead to you outpricing yourself or filling up at cheap rates when you don’t have to. In short, keep an eye on your compset and try to understand their changes but make your own pricing decisions.
5. Overlooking demand patterns
You probably have a good grip on your primary demand patterns that make up high and low seasons in your market. However, there are more nuances to booking patterns. Analyzing them and incorporating them in your rate strategy can help you price more effectively.
Here are some examples:
Demand by weekday, e.g. mid-week vs. weekend
Demand for certain room types by season or weekday, e.g. weekend leisure travelers prefer double rooms while mid-week business travelers want single rooms, and families traveling during the summer holidays need larger or connecting rooms.
Demand by type of guest, e.g. couples without kids traveling during pre- or post-season while families book during high season.
6. Sticking with a rigid price hierarchy
A rigid pricing structure is best when pricing manually since it’s easy and quick to follow. But you can seize more revenue opportunities when you’re flexible here. For example, if you use variable room type supplements depending on demand, you can guide bookings towards higher room categories on peak days. That way you avoid giving free upgrades because the base category is already booked out.
Adjusting all these nuances manually is difficult and time-intensive though. Again an RMS with support for multiple price hierarchies comes in handy which allows you to configure alternative price hierarchies. You can use this function if you want to have different rulesets during longer time periods (e.g., for seasons), or on certain days of the week repeatedly. It should also allow you to do temporary daily changes by setting minimum and maximum prices for each room type so the system can be more flexible with rate changes all while staying within your preset ranges.
Which of these six points deserves a second glance at your hotel? Check your current revenue management approach to see where you’re still missing opportunities. Chances are, the solution is quite straightforward, and a few simple changes will quickly show impressive results.
Not sure where to start or which tools could help you?
With the use of Atomize RMS, we got all of the above areas covered to guarantee you won´t miss any revenue opportunities . Reach out now to receive pointers on how you can start making the most of every revenue opportunity at your hotel.
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The post 6 Ways Your Hotel Risk Missing Out On Revenue Opportunities appeared first on Revenue Hub.