How to Maximize the Revenue of Your Hotel?
When I think of a hotel, I think of plush interiors, a heavy dose of hospitality and palate-thrilling food. When a hotel gives all of this to your satisfaction, it is undoubtedly going to have a revenue that runs north on the graphs very quickly. It is important for every hotelier to keep a keen eye on their revenues and expenses to understand how to maximize the revenue and reduce the expenses. Let us look at some of the best techniques to effectively maximize the revenue of your hotel.
Pricing the Guest Rooms
When hoteliers make an informed decision regarding the pricing of the guest rooms, they are able to make better profits. While comparing the revenue of the current year with last year can help you identify your performance, you must consider other factors when pricing the room too. So if you feel that you are doing better that last year because your room rates have been increased and you are able to get an average of $10 more than the previous year, you may want to analyze the room prices to check if you can generate a higher revenue if you reduces the room price by $10.
Use industry standards to understand the Revenue Per Available Room (RevPAR), the Occupancy Rate and the Average Daily Rate (ADR). These figures will help you analyze the revenue and it will allow you to make a more informed decision when it comes to pricing the room for higher revenues.
Online Travel Agencies (OTAs)
Just as much as your guests love OTAs, there is a chance that you may be on the losing end if your dependency on OTAs are higher than all other means of revenue generation. OTAs aim to sell your rooms at heavily discounted rates. A good operator or manager will have a strong understanding of the hotel’s booking patterns. Market demands are extremely dynamic, and one of your biggest pitfall can be basing the demand of a particular day on the occupancy rate of the hotel on the same day last year. If you end up selling a room at a discounted rate on Priceline or Expedia or Travelocity, there is a chance that you may have sold the room at a loss. Analyze the patterns and reduce your dependency on OTAs to maximize your hotel’s revenue.
There is no doubt that social media and online websites are extremely helpful in gaining customers, but let us not forget the old-school ways of attracting customers. Billboards and a visible sign which can be seen from a distance can be an easy way to bring more customers. Add some curb appeal to your hotel and make sure that the entrance and lobby of your hotel hold a charm that can make anyone who steps into the hotel stay in it. A pleasing and warm design will give customers a positive feeling. Add an enthusiastic representative behind the desk and you have the perfect lobby which can please any customer.
The demand of guest rooms will continue to change year after year and you will be able to maximize the revenue of your hotel when you have a clear understanding of the demands so that you can raise the rates when the demand is at an all-time high.