No Place for Stupidity in Hospitality! 5 Tips for Smart Revenue Management
This is the era of smartphones and smart cities, hoteliers! But then why not smart managers? In my journey as a marketer for hotels all over the world, the revenue managers of those properties are some of the hardest working people that I have encountered. They fill many shoes – working on pricing strategies, distribution, and business development and supporting marketing functions. But with any job, complementing hard work with smart work is what gets the job done! And when the job entails thriving in this highly competitive industry, you better be smart.
1. Pamper your website
Your hotel’s website is the most important source of revenue generation – the best channel of commission-free bookings. Make sure you set aside a good budget for it. Optimize the website by working on page design and loading time. Be absolutely sure that you have a smooth and efficient booking engine, with real-time integration with your Property Management System (PMS). Sadly, there are too many mistakes hoteliers make in this regard. Click here to read my rants about the common crimes that managers commit.
One exception is www.lemontreehotels.com, which I consider to be the best hotel website in India.
2. Watch like a Hawk
You simply cannot be a good revenue manager if you are not up-to-date with the latest trends in the global economy, hotel industry and your competitors. Technology, booking trends, spending patterns, nothing stays the same for too long. The smart ones have all the handy tools to help them keep up. I recommend Google Alerts to my clients – it mails news feeds directly to your inbox and makes it easy to track certain topics.
But don’t make the mistake of just following industry news, as I have seen with numerous managers. I say this time and again, the global economy has a profound effect on our industry, follow it wisely!
3. You cannot predict the future, but you can forecast demand
Many hoteliers still rely heavily on historical data to forecast demand. The excel sheets are impressive enough, but if you follow point no. 1, you will be aware of variables that affect your demand beyond those sheets.
For example, Delhi was plagued with a high no. of dengue cases last year. It saw a drop in tourist arrivals and demand shifted to South Indian cities. But the hotel rates did not change to reflect this additional shift in demand.
Incorporating such events into the analysis reduces the chances that Revenue Managers will be left behind or miss an opportunity.
4. Don’t be Anti-Social
This one seems like an obvious choice, but I pull my hair with frustration when I see clumsy social media practices. You must have impeccable ratings and high presence throughout all relevant social media channels. This is increasingly becoming the Revenue Manager’s prerogative. And that includes not just Facebook and Twitter, but Instagram, YouTube and blogs as well.
With a planned social media presence that engages audience, you can sustain higher room rates even during periods of low occupancy. What’s more! You can directly use it to drive business!
The Four Seasons Hotels and Resorts certainly know how to do it.
One look at their Instagram and you’ll be screaming LUXURY.
Another example is the Loews Hotel Group. In 2013, it launched its social reservation system, through which Twitter users can book rooms via DM and then a secure chat conversation with a live agent. And trust me, this is only the beginning. Many more hotels will follow Loews’s footsteps.
5. Choose Distribution Channels wisely – don’t get your names up on shady channels
This is the era of digitalism; bookings are made online every second. Revenue and digital are no longer different spheres. Online Travel Agencies (OTAs) do charge hefty commissions but they spend large budgets on marketing and advertising. Moreover, a number of guests visit a hotel’s website after seeing it on an OTA, boosting direct bookings. Don’t believe me? An estimated 50% of guests that see a property on an OTA will visit its direct booking website, enabling hotels to circumvent the commissions.
But the most important factor while choosing the OTA is making sure that it integrates seamlessly with your PMS. Other variables in my experience include the cost & spread and the target market of the channel.
If you have read this far, it means my time writing this article — sitting by the pool of my favourite hotel — is worth it. I’m being called in to deliver my next session of digital and revenue training for hoteliers, so I will leave you with this link to my YouTube show that helps hoteliers make super revenues – https://www.youtube.com/user/askavijitarya
Listen, will you do me a favour and share this article with somebody who needs it?
Thanks, and see you soon. Give me a shout out when we meet next!