Revenue management is important in every industry with the hotel industry being no exception. Regardless of the season, finding effective strategies to increase hotel revenue remains at the top of any hotelier’s mind. Some believe that it’s important to overhaul every aspect of the operation. But the truth is that it need not be such an overwhelming ordeal. Just a handful of effective yet simple tweaks to your revenue strategy can bring about a huge impact on your topline. Here goes the top 30 best strategies to increase hotel revenue in 2024.
30 Best Strategies to increase hotel revenue and Sales
1:- Understand the true potential of the market:
The first step to increasing hotel revenue is to determine the strengths and weaknesses of your hotel along with the opportunities and threats. Once you know this, you can move on to determine the USPs of the property. This will enable you to design your current guest profile and most importantly, the profile of your future audience. As you know your target market, you can segment it and design a client profile. This, in turn, can keep you updated with the trends in the market that might influence the needs and preferences of your clients.
2:- Develop regular pick-up reports:
When you are wondering how to maximize hotel revenue, you should be ready to adjust the price point of the rooms according to the current demand. With this, you can determine the optimal price for every room. And to achieve this, it is a must to keep track of regular booking prices. The greatest benefit of keeping pick-up reports is that it enables comparison from year to year. As a result, you can sell the kind of room to the right client at the most optimal price.
3:- Regulate the unconstrained demand of your hotel:
One of the best strategies to increase hotel revenue is to be aware of the net demand in the market so that you can determine the rates of various rooms for the near future. But for this, you need to have a clear insight into the unconstrained demand. In phases when the demand is high, for instance, during festivities like Christmas, the unconstrained demand is higher compared to the inventory. This will help you to increase the pricing and boost the revenue potential.
4:- Make use of demand forecast:
With demand forecasts, you can plan everything ahead of time and reflect on the pricing aspects later on. This implies that you get a chance to learn from the mistakes made in the past and optimize them for the future. This is one of the most effective ways to increase hotel revenue since the forecast precision gets better with the actual demand. As a result, you can base your actions on the opportunities available and reduce unwanted surprises and subsequently, optimize the revenue potential of the hotel. On the other hand, when you know that demand can exceed supply on some particular dates, you can tag surge pricing for the rooms to enhance revenue prospects.
5:- Delve deeper into seasonal opportunities:
Demand varies according to certain situations and times in every hotel. There are national holidays, local festivals, and other high-demand seasons that come every year and therefore, must be factored in. If you price your rooms without granting these aspects, the rooms might sell out faster but not at the price that it deserves. When you are trying to increase hotel revenue, you have to price the rooms and the other services properly. Otherwise, you cannot get hold of the high demand for the right piece.
6:- Consider the shoulder seasons:
While most hoteliers consider the peak seasons while designing the price point of hotel rooms, it’s important to think of the shoulder seasons as well. These spans, lying perfectly between the peak and slump seasons are suitable for offering lucrative discounts and deals to motivate your target audience. You may offer great discounts, deals, and other special offers to stimulate demand and hotel revenue optimization.
7:- Regulate the stay patterns of the clients:
Some hotels tend to control the duration of stays of the guests when the demand is high. By incorporating some limitations such as the highest and lowest duration of stay, the hotel can rule out high demand on a specific day and bring in bookings for the days preceding and following. As a result, you can have the increasing demand in control and boost profitability during the spans when the hotel is not fully booked.
8:- Become strict with cancellation policies:
A high rate of cancellation causes inaccurate demand forecasts which paves the way for reduced profits. Demand forecast becomes useless when the cancellation policy of your hotel is not in sync with reservation reliability. The most effective way to rule out late cancellation is to be more rigid with your hotel’s cancellation policy. You can either charge a penalty for cancellation or stop allowing it altogether.
9:- Make room for direct bookings:
Gone are the days when people contacted local travel agencies for booking a room in a decent hotel. Today’s travelers are smart enough to book through online travel agencies which makes direct bookings absolutely crucial. Online travel agencies charge a high commission on every booking and thus you have to ensure that you have bagged maximum direct bookings. With this, you can ensure the rate and the entire payment comes into your pocket.
10:- Be informed about the OTAs:
With online travel agencies taking over the tourism industry, there is much that a hotel can do for hotel revenue optimization. And for this being informed about the current workings of OTAs is necessary. These insights will help you adjust the rate according to what the external booking channels are offering. You should also check whether the information they are sharing with the audience about the hotel is correct and updated.
11:- Shield your hotel from brandjacking:
The rating of a property needs to be displayed on Google Hotel Ads. A rising number of users are opting for this platform as a reliable source of hotels. So you must be sure that your hotel is represented the right way. After all, it is the first impression that your prospective guest gets about the hotel. Make sure that you purchase branded keywords otherwise, the first three keywords available in the search results will be open for the OTAs to take advantage of your hotel as keywords.
12:- Utilize superb quality visuals:
There are few things under the sun that will captivate your prospective clients more than high-resolution images. When added thoughtfully, pictures have the power to tell a tale visually and entice the audience to convert. It’s worth noting that 67 percent of clients regard clear and detailed images weigh more than long descriptions weaved with words. Most importantly, OTAs reject low-quality images which makes it challenging to enlist your property.
13:- Offer amazing deals when you earn profits:
Offering great packages to users is one of the proven strategies to increase hotel revenue. After all, who doesn’t love to snag deals and discounts? If your hotel can offer fabulous deals at the right time, your prospective consumers will be more inclined to opt for your hotel among all other options. These offers and discounts must be adapted to the season and rate of occupancy. With this, you can rest assured that your clients will keep choosing your property over other properties.
14:- Gain insights from reviews of online platforms:
Today, online feedback and reviews can make or break a business. Most people go through the ratings and reviews at various online sites before finalizing a booking. To stay at the top of the reviews and boost your brand reputation, it is crucial to respond to feedback no matter if they are negative or positive.
15:- Encourage your users to give feedback:
To motivate your users to give feedback for your service, you have to show them that you have regard for your customers’ opinions. When your users notice that you respond regularly, they will be more inclined to give feedback on their experience. Also, as people see that you have apologized for a negative review and handled the matter professionally, they will consider such a review as an exception and choose your property and help increase hotel revenue.
16:- Offer a high value to the customers:
Have you ever wondered why your hotel is not making enough revenue whereas other properties at the same rate are making more money? This could be because you aren’t offering adequate value to your customers.
When you are wondering how to maximize hotel revenue, you should understand that the hotel industry is extremely price sensitive implying that offering great value is critical to its success. Therefore, you should provide an insight into the USP of your hotel and promise to deliver the desired value to your guests during their stay.
17:- Promote various food and beverage options:
Modern customers want to place orders of what they want, no matter where they are, and want to get it delivered in no time. Providing access to various food and beverage options digitally enables the guest to browse through what’s available and place orders directly through the online platform. This is not just convenient for the guests but also helps in hotel revenue optimization eventually.
18:- Ensure top-notch hospitality:
The experience of your guests and their subsequent reviews is not just dependent on the quality of the rooms and the facilities offered. The performance of the employees plays a major role in deciding the fate of your hotel. One of the best ways to increase hotel revenue is to keep your employees engaged and motivated so that they are empowered to perform better.
19:- Collect housekeeping data for analysis:
If you want to know how housekeeping is responsible in contributing revenue for the hotel, you need to analyze critical data pertaining to the services. For instance, what are the most frequent mistakes, how many rooms are assigned to each housekeeper, what is the average duration required for cleaning a room, and what are the bottlenecks in communication with the guests? Optimizing this data can further help you increase hotel revenue.
20:- Use social media to the fullest:
While social media platforms are often undermined, they are a prospective means to reach the target audience. For your hotel revenue optimization, you should first determine which platforms to utilize based on the class of accommodation you provide and your target audience. For instance, Instagram is a great platform for hotels today. Therefore, you should use it to the maximum potential.
21:- Invest in an influencer:
Influencers are becoming a high-potential instrument for reaching your target audience. By having a popular influencer on board, you can stimulate the audience’s demand towards your property. This will not only generate revenue but also build further demand for your hotel.
22:- Bring in room variant segmentation:
The commercial perspective of any hotel can be enhanced through room variant segmentation. When you are looking for effective strategies to increase hotel revenue, you have to provide different pricing for different sizes and designs of rooms for catering to a wider audience. For doing this, you should first find out which is the most profitable class of rooms in your property and develop the pricing strategy accordingly.
23:- Take advantage of upselling:
If you want your customers to spend more, upselling is a way to go. It is not only an effective way to increase hotel revenue but also works well in both offline and online modes. When using online, you can utilize the upselling tools to encourage customers to expand their budget by providing necessary room upgrades. On the flip side, in offline mode, upselling is possible when the guest appears at the reception. Your hotel can then provide some last-minute extra service.
24:- Incentivize your employees for promoting upselling:
This is one of the proven ways to increase hotel revenue as the incentives will push your employees to spend good time with the guests to build a flawless upscale opportunity. After all, what can be a better motivation for your employees than monetary benefits? You may further bring in competition among your employees by announcing a prize for the most capable staff.
25:- Cross-selling goes a long way:
Just like upselling, cross-selling can also help in hotel revenue optimization through the sale of complementary services. Cross-selling could be extra services in collaboration with third parties like parlor services or spa visits.
26:- Collaborate with local businesses:
Guests who have come for leisure will be much interested in experiences outside the hotel. One of the best strategies to increase hotel revenue is to partner with local businesses and startups for offering varying services at a discounted price point. In return, the business will pay back a referral or a commission once your guest opts for any services or experiences they offer.
27:- Create space-efficient designs:
Many hotels have underutilized spaces which can be designed to maximize potential. This could be a lobby or a conference room or anything that is significantly larger than required. How about turning the conference room into a co-working space while making an expansive room into a meeting space for private or business events?
28:- Draw upon niche markets:
When you are thinking about how to maximize hotel revenue, it’s critical to differentiate your hotel from the rest of your competitors. Specialization based on a niche market is an effective means of attracting guests which may not be available with other hotels in the area. In addition, when a business caters to a particular class of audience opens up new avenues for increasing profits.
29:- Utilize technology effectively:
At present, a wide array of online tools and software are available for hotel revenue optimization. Modern technology can complete complex tasks like managing reservations in a jiffy. But make sure that you don’t bring in technology unnecessarily as it will disrupt the needful human interaction rather than aiding it.
30:- Promote upselling through personal intimation:
Rather than expecting your clients to visit your site to check got offers and discounts, it’s suggested that you promote your hotel’s upsell by sending text messages rather than emails. It is found that more than 70 percent of consumers prefer receiving text messages in place of emails. To further boost the adoption of the guests and increase hotel revenue, communication during their stay through text messages is an effective solution.
Although the concept of revenue management remained limited to some areas, today’s hoteliers are concerned about hotel revenue optimization. Using automation and applying dynamic pricing are some of the most efficacious revenue-generating strategies. It’s a tough tightrope to walk on the balancing game of enhancing revenue while bringing down costs. But it is something that you cannot walk past to ensure the success of your business. No magic formula can indeed boost your revenue fast, but practicing easy yet effective procedures consistently can eventually bring desired results.