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9 Revenue Management Strategies to Enhance Your Hotel Business
Understanding the customer's needs and expectations is essential for the better implementation of revenue management strategies.
FREMONT, CA: Hotel owners across the globe today are implementing vigorous revenue management strategies to optimize their businesses for best results. The concept of revenue management originated from the mathematical sales model used in the airline industry and made its way into the travel and hospitality industry in the 1990s.
Although revenue management is applicable across multiple industries, it remains significant to the hospitality and tourism industry due to the perishable nature of goods. Revenue management strategies allow owners to make informed decisions on pricing, rather than relying on mere assumptions.
Here is a list of revenue management strategies you can rely upon to amplify your hotel business.
Know the Market
You must have a clear understanding of the market, and where the demand comes from, what are the local factors involved, and who your competitor is. Your competition need not always be from the same location as that of your hotel. Understanding the customer's requirements and expectations are also essential to apply the most relevant revenue management strategies.
Targeting all age groups is not at all a feasible approach towards boosting your profits. You must be able to identify the different types of customers and their attitudes while booking a hotel room. Hotel businesses tend to have regular customers who make multiple visits to a particular destination for business-related purposes. It is necessary to observe the patterns in their booking behavior and provide a suitable booking experience to ensure customer loyalty.
Across all industries, the different departments must work in unison to achieve optimum results. Similarly, for hotels, the goals set out by the various departments must be in alignment with your revenue management strategies. Identifying key decision-makers and collaborating them to work together can help in achieving better results.
Analyzing Past Data
Revenue Management strategies rely highly on forecasting future demands and revenue. This requires analysis of room occupancy rates, tariff rates and income. Thorough analysis of these data allows hotels to predict occupancy rates during different seasons and maximize profits by setting tariff rates accordingly.
Adopting SEO Techniques
Search engines play a pivotal role in generating business opportunities in the hotel industry. Customers need not be looking for your hotel in particular, but Search Engine Optimizations can help increase the visibility of your hotel to such customers. As a result, these tools can help turn potential customers into customers, by bringing your hotel to their notice while they may be looking for a hotel in the vicinity of yours.
Appropriate Pricing Strategies
Multiple pricing strategies are applicable in the hospitality business, and yet no single plan alone guarantees the best results. A hotel should be able to price their rooms depending on the season, and demand, dynamically.
A competitive pricing strategy is a promising one when you have more to offer than your competitors. However, it may be better to price your rooms more aggressively than others during the slow seasons, as a low paying guest is still better than no guest at all.
Eliminating the Middle Man
Third-party booking websites have become one of the most commonly used platforms by customers today. Although these platforms increase the reach of your brand, they also eat up chunks of profits in terms of commissions. Introducing incentives like Loyalty Points or discounts to customers who use the hotel website for booking will not only eliminate the middle man but also ensure customer loyalty.
Mobile phones have become a natural extension of the human arm and an indispensable part of life. Any hotel that has not yet optimized its website for mobile phones is already lagging behind its competition. Ensuring smooth functioning of your website on mobile phones will help increase the customer base of the hotel.
Maintaining Your Digital Presence
Hotel review websites play a significant role in shaping the image of a hotel in the industry, today. With the increasing number of customers looking into reviews by different websites before making a booking choice, hotels must turn these reviews into their favor by not giving customers any reason to show their displeasure on these portals.