How to Increase Hotel Revenues When Demand is Low
It’s hotel revenue management 101: when demand for rooms is low, revenues decline alongside it. This can be especially tricky for independent hotels, where a single season can mean the difference between failure and success. Low demand represents an important challenge in the hospitality industry, but not one that is without solutions. Here are some simple tips to manage hotel revenue when demand is low.
- Competitive Pricing
The first hotel revenue management solution most hoteliers think of when demand declines is to lower their prices to match it. A good revenue management professional might lower prices to attract the highest percentage of potential customers. This hotel pricing strategy is not without risks, because if your competitors adopt the same methods, you can quickly find yourself in a so-called “Price War.” This might lead to being beat on price by a competitor or having to lower room prices so drastically that your hotel stops being profitable. That’s why it’s important to know what the going rate for rooms is around you, and make sure your hotel revenue management system reflects them accordingly. For example, Pricepoint’s dynamic pricing engine not only adjusts your prices based on real-time demand, but will also provide visibility on the competition’s rates thanks to the built-in Competitor Rate Shopper.
Forecasting isn’t only worrying about the weather. Factors like climate, holidays, special events and more can all influence the demand for rooms in your establishment and impact your hospitality solutions. Different customers travel at different times, but by knowing the lay of the land around you, you can sell to the highest number of them. You can spend your time manually adjusting your prices based on the calendar and weather report, or you could apply a dynamic pricing platform that automates this process. Either way – travel is cyclical, and demand follows that cycle very closely. You’ll have to adjust prices accordingly if you want to optimize your revenues. For more information about dynamic pricing solutions and forecasting see here: https://pricepoint.co/how-an-rms-can-help-you-thrive-even-when-the-demand-is-low/.
- Address Specific Guests
Your customer database can be a goldmine of information. By noting which guests stay at your hotel during low-demand periods, you can reach out to them in similar situations in the future. Customer behavior can be predicted to an extent (though we’re only human), and the more you get to know your customers, the more you’ll be able to anticipate their needs. If you’re in a low demand period, make sure to send a personalized message to customers who have stayed with you in similar situations. Make those customers feel special and watch them become repeat customers when you need them most!
- Offer Promotions During Slow Periods
Similarly, some guests need to be enticed to stay with you during slow periods. If you have a feeling your rooms will be empty, instead of lowering room prices, offer a discount incentive. Maybe that’s a better breakfast, some company merchandise, or an extra day for only 50% of the usual price. There are many ways to entice guests to stay with you: suit their needs, nurture their wallets, and watch how you are rewarded!
Every industry faces its fair share of challenges, and clearly, hospitality is no different. These tips and tricks will help your revenues stay healthy when demand is low for hotel rooms. But what if you had a solution that did all this automatically for you? Pricepoint is a fully automated hotel revenue management system that automatically adjusts prices based on factors like seasonality, customer behavior, competitor rate and more. Check out Pricepoint.co to find out how an AI-based revenue management system can not only make your life easier, but make sure you never leave another dollar on the table again!