Using the Internet for Revenue Optimization

With the US economic crisis, the credit crunch, and the worsening global economy, the hotel industry has to think of innovative ways to increase their revenue per available room (RevPAR). Added to these external challenges is the increasing popularity of the internet. New competitors, new technologies, and new customers have changed the face of the business. Some managers may see these changes as a threat but it presents vast opportunities to grow hotel revenue as well. Much has been said about how online travel sites have benefited consumers, but what about the hotelier? It comes to two factors: Capability to Change and Control.

Capability to Change

No one can deny that the internet has bought massive changes to how people eat, work, and live. Almost everything can be done online. People can pay bills, watch movies, buy a new car, and even meet a spouse on the internet. This has dramatically altered how people interact personally and professionally. The hotel industry has felt the impact of these developments.

A mere decade ago, an hotelier would never have asked, “who are my clients” and they would not have worried about the guest staying elsewhere. This scenario is totally different today because the sheer number of information on the internet had provided consumers the types of alternatives they didn’t have access to in the past.

Control

Consumers are empowered when they visit a site and find out all the information they need. For example, if they are shopping for a car, they will go to several websites, check the prices, read the reviews, and visit the showroom. However, when it comes down to negotiation, the car dealer is pressured because the consumer knows exactly what his profit margin is. Is this scenario really true though? Not so.

The internet can also provide unsurpassed exposure to the hotel, generate sales, and grow revenue. Technology can be used to the hotelier’s benefit. As an hotelier, you control the type of information available on your website and in majority of booking channels. By making your hotel look as attractive as possible, you will boost profitability.

It is also important to look into the industry’s common practice of giving a pre-determined number of rooms to internet booking agents. During the holiday season, the hotel rooms are filled and the only rooms available are from the agents. Because of the high demand, agents can charge a higher price and they will reap the benefits.
To avoid this scenario, it is critical to have real-time access to pricing data and inventory levels across all distribution channels. RevPAR Guru can provide this information so you can make the necessary adjustments according to the actual demand and supply.