In revenue management, it’s not only about increasing hotel revenue through detailed historical data analysis, spotting trends, and forecasting. Different hotel departments come into play in raising property profits.
Our awesome working tips will help you boost hotel income on the accommodation and food and beverage side.
5 ideas on how to increase hotel revenue
The best approach is to look at a hotel as a whole organism, where each department plays a crucial role in increasing hotel revenue.
1. Engage your team
Your staff is your gold.
They should have a deeper understanding of what’s going on behind your pricing decisions. They can play a significant role in raising your profits. Let’s consider here things like the optimized room assignation, ways to upsell and cross-sell, and in the case of the hostel, why they should avoid at all cost opening a shared room only for one person.
Here’s an idea: give them access to, for example, Coursera or LinkedIn courses (The Fundamentals of Revenue Management: The Cornerstone of Revenue Strategy on Coursera)
Or even better – organize a training on-site!
2. Highlight your unique selling proposition
Do you know what makes your property different from others?
What’s your position in the market? Who are your clients? – you need to know your value.
Creating a unique offer permits you to raise your prices. When your offer is recognized as unique and of high quality in the eyes of your clients, you can position higher.
Consider this example: Room Mate hotels’ unique selling proposition is in its “stay at your friend’s place” kind of style. Each hotel has a different design and a name inspired by a host.
3. Optimize website for direct bookings
Take a critical look at your website. Do your travelers have reasons to prefer bookings via third parties? Do you make it easy for them to find information and check the availability?
Here’s what you can do:
- Optimize with SEO copywriting – use copy that is attractive and descriptive, leading with benefits, not features
- Use a booking engine that is customizable and mobile-friendly
- Optimize your website for mobiles
- Create a marketing plan for social media
- Create offers for direct bookings: discounts, free drinks, complimentary breakfast, etc.
4. Observe trends and real-time market data to make proactive pricing decisions
Historical data is no more a productive way to do demand forecasting. Revenue managers used to analyze their data monthly. With the current market state, it was replaced by chasing everyday market trends. Real-time data, like flight bookings, travel restrictions, hotel bookings, is necessary for price optimization.
To understand your competitive position, you can use rate shopper and automated revenue management systems, like Pricepoint, to track the data and optimize prices in real-time.
5. Invest in Google Hotel Ads or use the free booking links option
When your website is optimized, serving a great user experience (note: it’s necessary to rank higher on Google), it’s time to put it out there!
Yes, Google Hotel is a thing. With the growing number of people searching and making bookings via it – ignoring it makes you lose direct reservations.
Google gives you the chance to win over the OTAs and attract more direct bookings with these 3 options:
- investing in Google Hotel Ads,
- using the free booking links (here is the article explaining how they work),
- Or doing the mix of both.
Other creative ways to increase hotel revenue
- Incentivize reception and reservation teams via competitions and rewards from selling tickets, upselling, or cross-selling Spa treatments.
- Organize events for the local community: poetry readings, yoga classes, or even small yoga retreat where you sell packages: accommodation, food, and yoga classes.
- Promote between local companies as a space for co-working or meetings.
- Make use of empty or not utilized spaces: common areas, lobbies. You can offer it as a space for a local pop-up shop. Take the example of Casa Gracia, which features local shops and artists in its window space at the entrance every month.
- Sell hotel products: if your amenities are exceptional, like your boutique hotel, why not sell them when guests ask for them?
- Turn guests into brand ambassadors. Focus on the in-house guests’ satisfaction: encourage them to share their stay on social media. You can place a poster with your Instagram handle and/or a hashtag. Offer a bar discount for sharing their experience.
- Ask for reviews in post-stay emails, sometimes incentivizing with a 5% discount or a complimentary signature cocktail in the next stay. Also, you can provide guests with discount codes for the future, so they book with you directly (or share them with their friends). Remember – better reviews, higher revenues.
- Organize Instagram competition with prices (“win the third night for free while staying a minimum of 2 nights”) – you grow the social media following. And you can increase revenues with cross-selling during the winner’s stay.
- Focus on niche: create space and offers for travelers with pets, family stays, or maybe adult-only offers.
Honestly, the list could go on. Find ideas to increase hotel revenue via team brainstorming. After that, make sure which idea can fit into your hotel’s unique selling proposition and skyrocket guest satisfaction (therefore, hotel’s $$$).
How to increase food and beverage revenue in a hotel
For those of you who have a restaurant in the hotel, revenue management is vital as well.
First of all, you need to know your numbers. Think here about:
- Service time
- Seat Turnover: number of customers/available seats
- RevPash: Revenue per available seat hour
- TrevPash: Total revenue per available seat hour
- Gopinath: Gross operating profit per available seat hour
Secondly, see what’s in your menu is selling and what’s not. Then reduce your card to the most popular plates – less choice you give, faster guests will be making decisions.
Actually, this speeds up the cooking time and raises dishes quality too.
Consider dynamic pricing during rush hours.
You might use dynamic pricing in your accommodation (if not, here is a blog post to learn more about it). What’s interesting, restaurateurs start to use it too. Basically, it’s changing the prices based on the demand.
What’s more, you can lower prices for the specials between typical busy times – for example, between lunch and dinner – increasing demand and earning more.
Also, you can offer an in-room cocktail service instead of a typical minibar. Especially now, when many travelers avoid crowded areas. Plus, it gives a sense of extra (affordable) luxury.
Instagrammable food and drinks
When you make food and space delicious and Instagram-friendly, you serve the food experience hard NOT TO share on social media.
Include products from local farmers, local craft beers, and seasonal menus. People are eager to try new spices and tastes. So, give them what they want: local experience.
Check out the Swanky Monkey bar (part of Swanky Mint hostel), with its “jewel: Swanky beer – craft beer that can be found exclusively in Swanky.”
Craft your menu, so it’s visually appealing:
- place the best plates at the top left and right corner.
- Include prices after the plate description without the currency sign.
- Use descriptive language for food.
- Consider learning more about food copywriting (persuasive writing) for building the menu.
What’s your next step?
Start from what’s closest to you: improving the website for a better user experience. After that, you can cover the rest of the ideas mentioned in the post, and you will be on your way to skyrocket hotel revenue.
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Written by Ewa Gabara, Marketing Coordinator