In addition to selling services to right customers at the right time, what contributes to a hotel’s success is an effective hotel revenue management strategy. Despite having remarkable growth in last few years, there are many hotels belonging to renowned chains as well as independent hotels that still haven’t embraced revenue management. While analyzing its role in hospitality industry, I realized that several renowned players of the arena are hesitating to adopt revenue management at a time when it has been playing a notable role in driving hotel’s profits.
Earlier, revenue management was limited to a few sectors like airline. But today, many industries have been using revenue management techniques to avail their benefits. Many chains as well as independent hotels are applying revenue management not just to increase revenue, but also to perform well during off seasons. Through an effective revenue management, rooms and various hospitality services can be priced differently considering their demand.
Revenue management is not just helpful in managing a business effectively, but it also gives opportunities to small hotels to lock horns with big industry players and drive performances to enjoy revenue benefits. Revenue management isn’t only to generate revenue and can be applied to plan strategies that help a hotel work well in all seasons. While having a discussion on revenue management, I have been asked by hoteliers about investment. It is necessary to understand that it’s an investment that produces great results for a hotel. Even a small hotel can have better results than its bigger counterparts by striking in right areas of revenue management.
Focus on inventory management: Rooms are the most valuable asset of a hotel. Therefore, hoteliers can drive success by figuring out how to make the most of hotel rooms. It can be done by improving in-room facilities and offering accommodation at low prices. A hotel’s revenue management should also be focused on embracing digital technologies in the right way. Focus on revenue managers should be extracted from available resources while offering services to guests at minimum costs.
Focus on pricing: An effective revenue management includes all those tactics on pricing that result in hotel room occupancy all through the year. It is also focused on generating revenue for the hotel through restaurant and bar. To make sure that price tactics work, revenue managers should make changes in pricing considering demand and season. Changes can be made in regular rates, special offers, packages and last minute bookings.
Focus on performance metrics: For small hotels where budget is limited, revenue managers should consider the hotel’s performance to understand factors that contribute to its success. Performance measurement can also help in knowing the area where improvements can be made to generate more revenue. By collecting data on different sources of growth, small hotels can make necessary improvements to generate more revenue.
Hotels of all sizes have been using different online and offline strategies to gain attention of potential travelers or increase revenue. Competition rises when OTAs arrive in the contest of promoting a hotel’s services. To remain competitive and generate more profit, small hotel revenue managers should embrace technologies and make use of OTAs. In addition to adopting new tactics, they can design and use an effective digital marketing strategy to improve different sections of hospitality and give tough competition to big hotels.
Investing in revenue management is a beneficial approach that a hotel of any size should embrace to have revolutionary results. In today’s tech-savvy market, it gives equal chances to all hoteliers to generate revenue and stay ahead in the competition. To make it work, revenue management should be applied in the right way by professionals. So, don’t hesitate to invest in revenue management. It will definitely improve your hotel’s revenue generation.
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