Hotel Revenue Optimization Strategy

Hotels around the world are battered by the economic crisis – so what else is new? Things are about to get worse. With today’s current climate, industry experts estimate that RevPAR (revenue per available room) can drop by as much as 11% or more. Since hotel occupancy rates are already at their all-time lows, this isn’t good news for hoteliers and revenue managers at all. In this climate, most hotels will compete on rates instead of service. Instead of making things better though, this strategy will only create a downward spiral that has no end in sight.

How Can Hotels Compete Beyond the Discount?

One of the most important issues that should be determined is whether or not it is possible for hotels to flourish during the travel slowdown. Jean Francois Mourier, the CEO and Founder of RevPAR Guru, see revenue management as the solution. A Miami-based property which had previously been struggling to maintain a 45% occupancy rate saw this figure jump to 90-94% after restructuring its revenue management system. Revenues increased by 70%.

Sounds too good to be true? Not according to Mourier. Hotel revenue management is one of the most critical metrics in the hospitality industry. After the right system is in place, it can be the solution to the outdated industry standards that no longer meet the demands of today’s environment. RevPAR Guru is an alternative type of revenue management system as well as a pricing solution that helps hotels increase their profits even as the economy goes into deeper recession.

Increase Hotel Sales and Boost Hotel Profitability

Today’s environment requires hotels to adapt measures that range from improving direct marketing and to boosting loyalty programs. However, it is also important to take note that these measures cannot be sustained optimizing the cost centers. With this in mind, revenue management that is both effective and efficient is imperative. Mourier provides the following tips on how hotels can increase their RevPAR:

Boost Internet Sales

Discount-hungry consumers use the internet to book their accommodation. It is vital for hotels to have an internet presence to gain exposure and brand positioning.

Open Sales Offices at Night

When you’re not operating 24/7, you’re missing out on a lot of opportunities. Making updates and booking reservations at night is important to increase hotel profitability. This is especially true if you are targeting international travelers.

Change Room Rates Often

Every dollar counts. A lot of hotels make the mistake of not successively increasing their rates based on demand and supply. Don’t leave money on the table when you can be maximizing profitability.

Use Technology

Hoteliers sometimes get overwhelmed by the amount of data entry involved in managing hotel technologies. By automating the process, your staff can focus more on important things like increasing sales from local corporate accounts, social groups, corporate meetings or productions.