By Giovanni Angelini Sept. 2019
TOP-LINE GROWTH WITH DISCIPLINE & PASSION
Revenue maximization at the very center of all the hotel’s strategies and of the decisions making process
Influencing consumers to book hotels is the ultimate objective of any hoteliers regardless of their roles and positions within the organization. In principle, everyone in hotel business has to be involved on continuous top-line growth.
Learning how customers shops for hotel accommodation, what drive them, what influences them and how they make decisions is simply a must for hoteliers to learn, to be aware of and to respond.
Every hoteliers and every hotel operators, regardless of location-size-product are facing with rising operating costs, with perishable inventory, and with increased competition. There are no exceptions therefore the only way for the organizations-hotels to progress is revenue growth.
Identifying and understanding of the market, the source of business, the demand, the seasonality and the needs-wants-expectations of the customers, are simply basics for success. And do remember that your direct competitor/s may knows the market better than you and they may respond much faster than you. Also remember that consumer's demands and expectations continue to change very rapidly.
It is a fact that no one-pricing strategy will guarantee success. And this is one of the key reason for hoteliers to put in place and implement a strong revenue culture trough the hotel and make effective use of the basics like data, demand prediction, dynamic pricing, search engine optimization, incentives for direct bookings, an efficient online travel agents strategy based on a win-win situation, and of course best use of modem technology & systems including mobile optimization. It is a fact that the online agents continue to challenge the hotel industry, you need to be smarter than them when it comes to direct bookings.
Building a strong consumers loyalty is the objective of most hotel organization but have to accept and respond to the growing trends that loyalty to a specific brand or to a product is decreasing and that all loyalty programs must be agile and easy for customers to accumulate and redeem benefits. Customers expects to see clear value from those programs. As the consumer demands continue to change rapidly, it becomes a priority for hotels to re-imagine the notion of brand loyalty in particular when catering to the younger generation.
Hotels are becoming less differentiated and consumer reviews and star ratings through social media platforms are in many cases, becoming more important than brands. It is very clear that hotels must find ways to stand out and be recognized by the consumers at what they are good at and at what they are offering on improving the customer journey.
The objective of an efficient revenue management strategy and of a dynamic pricing is to maximize the revenue per available room, not just the occupancy or the rate.
Hotel revenue management involves forecasting demand by understanding the unique characteristics and buying-spending behaviours of prospective travel segments, then matching that demand by optimizing prices and inventory prior to confirm their bookings. This requires a business’s ability of knowing the expectations of your customers and do remember that marketing-advertising magic will not always work.
Accurate forecasting is an essential part of maximizing revenue. It is a must for hotel leaders and for executives to identify and anticipate opportunities in different demand periods. Use of reliable statistics/numbers is simply a must and it is necessary to forecast by day and by segment first then by week and by month. There are no other ways for an accurate forecast.
You'll need to decide how many rooms you will allocate to each of your channels, by when and at what rate. To maximize revenue you must balance the short-term, high-yield business with the long term low-yield business. Length of stay, day of the weeks stay, total revenue per room, total revenue per guest, lead time and others are all very important consideration before allocating your precious inventory.
Greater alignment between marketing-revenue-operation is essential. It is a team work and success will never come from only one or two functions/disciplines, needs the commitment and most important the accountability of all key functions in the hotel in order to stand-out and achieve market leadership. All internal barriers/silos are to be eliminated. Cannot get away from the facts that a happy-passionate-responsible–motivated-efficient and well trained & empowered team is critical to the success of any hotels.
What hoteliers have to do to make sure that their products and services stand out from the crowd? Clarity on the competitive advantage plus full understanding and managing the real strengths and weakness will definitely guide proud hoteliers to focus on important topics. Guest profiling and personalized communication between hotel and guests has become an expectation and must be embraced by all in order to compete.
In an increasing competitive environment, hotels must go beyond the tried and tested, and experiment with new features, take risks with new ideas and anticipate what will be most attractive to their guests.
Updating all information available on the website and mobile must be an ongoing process and not an annual project. We all know that customers have no patience on navigating old-inefficient sites and in most cases, the final decision in choosing an hotel is based on the web experience.
We live in a society used to getting almost every information we need through our mobile and automatically when we are at a hotel, we prefer to default to our mobile than call the concierge or the receptionist. It is a fact that digital interactivity will dominate the in-house guest experience in coming years. Guest profiling and personalized communication will continue to increase.
Never make commitments that cannot be complied with. All brand-promise must be delivered in particular when it comes to deliver value as this is a priority and a basic expectation for customers. Must always remember that this industry is very much price-sensitive. Travelers must be able to distinguish the differences between your offerings and those from your competitors. And for you to provide a better solution in particular to your experience-focused travelers.
In this industry, have to be aware of the economic anxieties, including the source-reasons of those, plus be cautious about when lies around the corner and always be prepared to respond fast-before it is too late. Nothing new that focusing on discretionary spending-trips and on perceived value is a natural behavior of travelers during an economic slow-down.
Also, is nothing new that cutting rates to fill rooms is definitely not the best way to respond. Creativity on implementing value added propositions and/or attractive packages during uncertain times becomes essential. Clarity on a competitive advantage and going after available opportunities (or creating them) it is simply a must.
Few important questions (useful reminder-check list on Dos and Don’ts) as it relates to revenue that hoteliers must continuously ask themselves;
- Who is dictating the pricing strategy at your hotel?; the market? the competitive set? the budget? or …..
- And how transparent are your pricing?
- Is a low-paying customer better than an empty room even in peak-high season?
- Memorable experiences or material goods? where do you stand?
- Volume of business from repeat customers, who are they and how to increase?
- Is your website simple to use or are you frustrating your guests? and how you compare it with the competitors?
- What are your exclusive offers/packages? how you compete on those?
- What is the response time to new business leads? within one hour or within two days?
A motivating and practical industry "Quote":
The concept of selling the right hotel room, to the right customer, at the right moment, for the right price, via the right channel..... it is a clear guidance and essential for any hotel.