The ultimate aim of every hotel is to make a profit. The best way to do this is to effectively manage your budget and follow a data-driven total revenue management strategy. In fact, most professionals in the hospitality industry now recognise that strategic revenue management is one of the key levers of business success. It’s all about anticipating and reacting to demand, adapting to market trends, and using the right analytics to boost revenue growth.
With this in mind, here are 3 top tips to help you boost your hotel’s total revenue management strategy.
Enhance your ancillary revenue streams
When most people think of hotel revenue, their first thought is the income that’s generated from selling rooms. But ancillary revenue streams have the potential to be just as profitable. That’s why it’s important to ensure that you’re providing the best possible experience with each service that you offer. It’s also a good idea to regularly review your additional services to see if there are any potential gaps where you can add additional revenue streams.
But how do you know where these opportunities are? What’s the best way to enhance your services?
The first step is mapping out your guest journey and identifying all touchpoints where you can enhance your guest experience. Think about everything that a typical guest experiences when they book a room at your hotel. This includes pre-stay (booking, reservation confirmations, pre-arrival preference surveys, etc.), stay (check-in process, amenities, customer services, etc.), and post-stay (check-out, guest satisfaction surveys, follow-up emails and promotions, etc.). Also, consider any pain points that guests might experience during their journey with you.
Once you’ve mapped out your guest journey, evaluate each touchpoint and consider two aspects. The first aspect is guest satisfaction. How can you offer a better guest experience? Is there anything you can improve to encourage guests to pay more for additional services?
The second aspect is whether there are any missed opportunities for generating revenue. Are there any additional upselling and cross-selling strategies that you can implement at specific touchpoints in the guest journey? Are guests aware of all your services in advance? Have guests requested services in the past that you don’t currently offer?
The more you are able to enhance and expand your ancillary services, the more total revenue you will generate for your hotel.
Prioritise direct bookings
Most hotels have become heavily reliant on OTAs for securing bookings. Although there are a number of benefits to advertising through third-party platforms, such as increased brand awareness and consumer trust, you are probably missing out on potential revenue sources if you don’t include direct booking strategies in your total revenue management approach. Direct bookings cost less and generate more revenue (no third-party commissions). Plus, you have direct contact with your guests when they book directly with you, and this means you have more opportunities to cross and upsell your ancillary services, further boosting your revenue growth.
Moving forward, aim to optimise your marketing and distribution strategies in a way that allows you to prioritise direct bookings. Upgrade your website and promote your loyalty programs. Send guests regular emails with offers and promotions. Get active on your social media channels and follow up on any online reviews. All these strategies will help you build a stronger online presence and nurture consumer trust so that guests feel confident booking directly with you. That way, you not only generate more revenue from every reservation, but you can also drastically cut your distribution costs.
Track your performance KPIs
Finally, the most effective way to drive revenue growth is to regularly track and analyse your performance. Track your performance KPIs daily and keep your finger on the pulse of market trends and demand fluctuations. Make sure you have access to a robust total revenue management system so that you have access to accurate and reliable data.Measuring your current performance gives you the knowledge you need to improve it.
For example, BEONx’s total revenue management system gives you access to a range of valuable metrics that you can use to analyse all your historical performance data together with customer behaviour trends and predicted demand. Our solution also includes a unique Hotel Quality Index that you can use to analyse your online reputation as well as the strategies that your competitors are using. All this gives you valuable insights that you can use to enhance your forecasting, pricing, and marketing strategies.
Ultimately, the right predictive and prescriptive analytics can help you understand your market, anticipate and react to consumer behaviour, and adapt to demand trends. That way, you can make data-driven decisions and design effective total revenue management strategies that drive revenue growth for your business.