Rate Integrity at Times of Economic Crisis Part 2

It is safe to say that the world has changed. The hotel revenue management strategies that worked a decade ago may no longer work today. But throwing all rate integrity strategies out of the window isn’t right either. It is crucial for hotel revenue managers to be smart in formulating and implementing yield management techniques in today’s business and leisure environment. Discounting across the board might increase hotel occupancy, but it may not necessarily increase hotel RevPAR and boost profitability.

So is avoiding drastic rate discounting a good strategy? It might sound like it but at the end of the day, hotel revenue managers still need to find a way to fill out those rooms. A creative and dynamic solution is required to solve this problem. Rate discounting might just do more harm than good over the long term. Here are some proven strategies to check out:

Rate Parity – though this can be used as a guideline, it is not a law. Revenue management staff knows that hotels need to please distributors in order to succeed. Without hotel rate parity, making a hotel profitable is difficult, if not nearly impossible. Adapting the strategy to certain market changes and being dynamic builds on the success.

Price Fencing – reward guests for loyal stays. If they stay for a week, maybe you can offer then 1 night free. Or if they reserve for five nights (or any length you have in mind), give them steep discounts.

Lead Time Pricing – giving early bird discounts is still a strong strategy. Determine your booking window and then before the usually pick-up curve, this is where you can offer the discount. Your competition might still be asleep while you are eating a significant portion of their market share.

Rate Integrity – this is what the article is all about. It is actually not necessary to maintain your old rates. However, it’s not required for you to go as low as your competitors as well. Just look at the stock market, sometimes it is up and at other times it is down. The same principle works in hospitality revenue management. Just never go too low that your brand itself starts to suffer.

How Do Travelers Use Search Engines These Days?

The internet plays a big role in the travel industry today. Everything from flight schedules to updated hotel rates can be seen online and travelers are taking advantage of the easy access of information. Both leisure and business travelers can benefit from using the internet. On the other side of the equation, hospitality revenue management companies can also benefit from this development.

Making their information easily accessible, conducting search engine optimization tasks, and trying out other web promotion strategies can increase RevPAR and increase hotel sales many times over. It is no secret that travelers these days use search engines especially the major ones including Google, Yahoo, and MSN to find travel deals and gain information about vacation alternatives. 34% mainly rely on search engines while another 23% prefer to look into the web pages of specific countries or location to get more details. Then, this is followed by online travel portals such as Travelocity and Expedia which accounts for 22%.

Before these desired results can be achieved though, determining consumer behavior and the changing trends in the market is important. For example, as searchers become more familiar with online technologies, their search patterns are becoming different as well. It is also important to take note that the number of travel portals including planning and booking sites have grown dramatically through the years. Hotel revenue managers need to factor in these changes in order to compete effectively in the marketplace.

In addition, utilizing a hotel software such as RevPAR Guru can enable hotels to give appropriate pricing through demand forecasting. This pricing software also helps hotel revenue managers keep up-to-date about what’s happening around them. Through the software’s functionality such as GDS distribution, inventory management, pricing software, and other applications, the hotel revenue management teams will be equipped with the right tools to meet the challenges today.

Should You Train the Staff in Revenue Optimization?

Is it a good idea to put hotel revenue management at the hands of the hotel staff? The Carlton Hotels seem to think so. Many hotel revenue managers see yield management as a centralized function that should be done at the top. With the new technologies available today though, it has become possible to decentralize this function efficiently to the hotel staff. Each hotel revenue management personnel can be empowered to make data-drive revenue management decisions that can help the hotel take advantage of opportunities in the market.

However, before you think that this is a good idea, it is important to train hotel revenue management staff sufficiently to make important decisions. Jumping into this blindly may do more harm than good over the short and long term. For example, if one employee gave a bigger discount than another to clients in the same market, the guest who paid more might become disappointed. There should be a reason why certain levels of discounts are given. Pricing decisions in the hotel cannot be based on gut feel alone.

It is also important to realize that there are software requirements involved in this strategy. Currently, most revenue management platforms are designed for profit optimization through using historical data, market trends, and demand forecasting. This is already a good platform. Customizing it further might be necessary depending on the accessibility the revenue manager wants to give the staff.

RevPAR Guru is a good software for this purpose. It can transform the way yield management is conducted in the marketplace. In addition, the software has the capability to aggregate current data into the hospitality revenue management process to increase RevPAR and provide best results. Because the creators of RevPAR Guru also realize that the marketplace is highly dynamic, this platform is created to be stable and flexible at the same it.

Google City Tours: How Will It Impact Hotels

Technology giant Google has recently released their latest lab project called the “City Tours”. Their foray into the travel industry was launched relatively silently compared to their other ventures. Nevertheless, being Google, this development will inevitably have a very big impact on hospitality revenue management and the industry as a whole. There are many implications related to this application.

It is crucial not to forget that Google is a powerhouse in anything internet-related. If it so desires, it can release any travel application with various functionalities. And if it makes the decision to create a travel portal, it may very well kill its competition. The company could have developed a hotel comparison software, a search engine for airline flights around the world, or even a review aggregation tool. Instead, Google decided to concentrate on local attractions using the Google Maps API.

The Google City Tours is good news for everyone in the hotel industry from the hotel revenue manager to the yield management staff. On the part of Google itself, their strategy is a good move. It is related to their thrust to provide tools and features that will supplement their current application. For example, the Google Local Search as well as their business database from partners will help travelers get suggested itineraries anywhere in the world.

Using the interface is very easy as well. Though the features are currently limited, its potential is immense. Every hotel revenue management teams from the US to Asia should know how to utilize this application as soon as possible. Tourism will be influenced greatly by the colossal amount of data that points to this index. Once it is integrated into mobile devices, hotels and other hospitality organizations that are included here will experience increase RevPAR, an increase in hotel sales, and optimal profits.

3 Tips for International Hotel Internet Marketing

Catering to an international audience is very important in the hospitality industry. For this reason, hotel revenue management teams should look beyond their borders and look at opportunities elsewhere. A lot of yield management practices make the mistake of focusing too much on developing an English website without considering how they can promote their hotel internationally. Some of the principles in search engine optimization in English-speaking countries are also applicable elsewhere.

But it is also crucial to remember that there are cultural connotations in the wording of these sites. People will type the content differently. Improving hotel SEO means that hotels should be aware of these differences and think of ways to take advantage of it. It is challenging to optimize a hotel website for an international audience at the same time to boost profitability. There are certain guidelines that can help your online hotel distribution strategy a success though. Among these are:

Language Targeting – obviously, targeting an international audience means creating a website in that language. However, some hotel revenue managers make the mistake of simply translating their English content to another language. Direct translation would not be that effective in this case, it is important to consider accurate translation containing words international audiences use.

Register at Local Search Engines – registering at top sites like Google and Yahoo is a must. But in certain countries, there are preferred search engines that locals patronize. In addition, registering a physical address in that location may also be beneficial. It will give you the advantage of local listing. The process is pretty straightforward and is quite effective.

Relocate Your Site’s Hosting – one highly overlooked factor is where your site is hosted. Most hotel revenue managers will simply set up a virtual host in their existing server. While this is acceptable, it is important to note that Google and other search engines actually give priority to web servers located to the origin of the search. That is, if your targeted searcher is searching in France, Google prioritize the sites hosted in that country.

Finding the Right Online Marketing Channel to Increase Hotel Profitability

If you have $1 million dollar to invest in one online hotel marketing channel, which one should you choose? This is a very challenging question that every hotel revenue manager should know the answer to. It is a given that using a variety of tools is very helpful. But among these tools, there will always be one that stands out. Once you find the right tool for your site, it will generate a dramatically higher number of visitors.

With so many different hotel online marketing solutions available in the market though, it is easy to get confused. Fortunately, the tips below will give you a guideline on what hotel revenue management tool you should concentrate on. The right yield management solution lies in the individual strengths of the hotel, its capabilities, and its goals. So here are the hotel internet marketing channels available today:

• Display advertising – essentially means putting advertisements on third-party websites to generate traffic and create brand awareness. Some ad formals include overlays, banners, and interactive ads.
• Email marketing – the system of collecting email address (leads) and then sending their newsletters through emails.
• Pay per click advertising (PPC) – bidding for a placement in popular search engines on your niche. It gives instant visibility based on the keywords chosen
• Online public relations – this strategy mainly uses media online outlets to earn brand recognition and increase hotel sales.
• Search engine optimization (SEO) – SEO should always be part of a hotel online distribution strategy. Majority of users uses search engines to look for products, information, services, and ideas. If you’re not listed at the first page of the results page, then your hotel is missing out on an opportunity to increase RevPAR and boost hotel sales.
• Social Media Marketing – characterized by the method of using social media platforms to improve visibility through word-of-mouth and relationships.

As you can see, there are many ways to market your hotel online. The right strategy for your hotel depends on the company goals in revenue management (whether the focus is educating readers, increasing raw traffic, or boosting hotel sales). The budget and available resources within the company are important factors as well.

If the hotel has strong development resources then Search engine optimization and using viral content might be the best idea. On the other hand, if the hotel has strong creative resources then email marketing (copywriters) and banner advertising (graphic designers) is the best option. And if the company has strong social resources then obviously social marketing is the solution to hotel profitability.

Optimize Hotel GDS Distribution

The objective of improving the hotel distribution system lies in the Global Distribution System and it is not really as difficult as it first appears. Effective hotel revenue managers know that they can easily take control of their hotel GDS by knowing the opportunities available in their properties. These opportunities can range from marketing the hotel using targeted advertising so that they can be placed at the top of hotel listings.

Meanwhile, doing simple steps like using revenue management features such as “Hotel UpSell” and “Best Available Rate” can help as well. It is important to realize that there are actually tons of available opportunities to advertise within the hotel GDS. Still though, hotel revenue management teams should determine when the best time to advertise is and what messages should be given.

Specific GDS Promotions

Specific messages should also be promoted. For example, in some cases, hotels want to market a specific destination while some are pushing their brand to a new target market. A lot of GDS today can provide personalized programs that are customized according to the hotel’s needs. It can include various advertising tools that are available in the hotel distribution system.

Effective advertising tools usually available from major GDS include:
• Sign-in Advertising – direct advertising messages during at the period of signing in to the GDS by agents.

• Targeted Textual Advertising – helps hotels promote the products and services to the target market during the time when they are ready to make their decisions.

• Travel Agency Portals – usually related to graphical user interface or GUI. Hotel GUIs allows hotels to use the combination of text and graphics to make a bigger impact. Because of this, the tool is particularly beneficial when promoting brand awareness or a certain property with pictures.

• Online Itineraries – more visual content is used in this case. The strong images coupled with the strong push marketing strategy helps hotels make a greater impact in the minds of their consumers. This can ultimately increase hotel sales.

Each GDS should provide targeted promotional tools so that hotels can use this to further promote their brand or properties. Meanwhile, online hotel GDS can be composed of travel agency portals, internet brochures, and online itineraries; these can be maintained by the hotel itself depending on the GDS in question.

Understanding American Behavior in Booking Travel

It is no secret that American travelers are now using the internet to get the best travel deals for their family. And once they are on vacation, it is their desire to spend as much time with their loved ones as possible. The chairman and CEO of Ypartnership, Peter Yesawich, provided an overview of consumer behavior with regards to their travel and leisure activities.

Citing the findings of the National Travel Monitor, he revealed that social values and technology play a big part in influencing American travelers. According to the findings, technology is especially important because 61 percent of travelers cited that they used the internet exclusively for their purchase decisions. In addition, the 2009 Monitor further declared that 56 percent of these travelers make their online travel bookings.

Based on the study, it seems that only 7 percent of American still go to travel agents exclusively for help. Meanwhile, 24 percent said that they used both travel agents and the internet in making their decisions. Aside from researching online, American travelers are also increasingly becoming active in online communities.

Price-Driven Market

Americans are using websites to check out the lowest possible price for their requirements. It remains the most important feature for searchers with 87 percent of them citing that this is the main reason they browse online. Another feature that can help boost hotel sales is the booking capability.

Effective yield management staff knows that this can significantly increase RevPAR and help maximize profits. In fact, 74 percent o f the respondents said that they prefer to book conveniently from the website. Other features such as the capability to share media content like photographs, videos, and articles are also very helpful.

Family Values is Still the Most Important

But before you think that price is the most critical factor, the Monitor discovered that Americans are actually more interested in spending quality time with their families. The intergenerational travel packages are quite hot because of this. In addition, many people still value their time. So they would much prefer to get personalized services than do everything themselves from scratch.

Hotel SEO: The Next Big Technique to Boost Profitability

Previously, hotels can simply rely on their location and brand image to drive revenues. Some just piggybacked on their partnerships with travel agencies and booking websites. But as the market becomes more competitive, it is becoming clear that conducting their own internet marketing and search engine optimization (SEO) initiatives is a key driver to future growth.

Getting bookings directly from the hotel’s website can dramatically increase hotel sales and overall revenue. Basically, the establishment would no longer need to pay a certain “commission” to their partners so the profits derived all remain within the hotel. Ranking high on the search engine has an added advantage. Customers can directly access the website and will be able to make judgments for themselves without bias. Other channel distribution partners might have existing agreements with other hotels and the establishment might not be optimally promoted using this medium.

Implementing other marketing technique will also be very helpful. Among the things you can consider include:

Copywriting and Blogging – helps the company become recognized leader in the field. It also connects the hotel with the consumers so it can create a lot of buzz. In addition, it is a proven yield management technique to increase traffic and improve visitor loyalty.

Web Marketing – in order to boost profitability, an all around web marketing strategy needs to be effected. It can increase hotel bookings, improve RevPAR, and maximize profitability.

Video Marketing and Social Networking – it has been proven, time and again that using Web 2.0 tools like videos, images, and blogs increases hotel revenue. Video marketing is becoming particularly popular these days especially when it comes to connecting social networks. Hotels can greatly benefit from this.

Email Marketing – newsletters essentially keeps you on the top of mind of your targeted consumers. This is because the audience will frequently be reminded of the hotel’s brand, its amenities, and the level of service it provides. If done properly, it can greatly increase RevPAR and boost hotel profitability.

How to Implement Yield Management Strategy at the Front Desk

In today’s highly modern environment, it might be tempting to focus on new hotel distribution channels such as popular travel portals and agency partnerships but there is an important segment that hotel revenue managers need to focus on as well: walk-in clients. Though this market may not be as big as the number of consumers you will receive from the internet and elsewhere, it presents great opportunities for the hotel. Walk-in consumers are usually those who had experienced the hotel’s service in the past, were referred by their friends, or simply received the hotel’s value proposition.

The front desk staff, in this instance, will assume that the walk-in client is a booking client but this is sometimes not the case. This is because they might be put off for some reason whether it is the high rates being charged to them or the “curb appeal” of the hotel does not suit their preferences. Whatever the case, there are techniques that will help improve hotel sales and boost profitability from this market:

Connect with Clients – it cannot be stressed enough that establishments in the hospitality industry, particularly hotels, should focus on service. The front desk staff and everyone in the front line should be trained to meet the needs of the clients whether during the peak or off-peak season to optimize hotel profit. Employees need to establish eye content, smile, and greet guests before they are greeted.

Offer Alternatives – depending on the availability of hotel rooms, which can use established using the inventory software, hotel revenue managers can offer two or more choices to the guest. For example, instead of quoting the highest rates, options should be given upon the guest’s inquiry. Some alternatives can include room vs. suite, view vs. non-view, and standard vs. deluxe among others. Doing this helps changes the question on the client’s mind from “should I book here?” to “what room should I get?”

Describe the Hotel’s Offering Properly – instead of directly using terms like “deluxe rooms” and “continental breakfast”, it might be a good idea to fully describe what these services entail. Put yourself in the guest’s shoes and talk in the kind of language they would appreciate. This is hotel revenue management at its best.

Increase RevPAR Using Online Distribution Channels

Utilizing direct online bookings seems to be the best solution for struggling hotels. With the credit crunch all over the United States, Europe, and Asia, it seems clear that innovations should be of utmost consideration among hotel revenue managers. Most companies, especially those involved in the hospitality industry, are working to simplify their current processes and benchmark against market leaders to boost profitability. At the center of this initiative is the utilization of cutting-edge technologies that will help increase RevPAR and improve hotel revenue from the internet.

For most hotels, increasing their online presence will effectively lower their cost and reduce the need for other hotel distribution channels. Doing so will help improve direct brand recognition as well as improve their profit for every booking. And if you add the convenient and opportunity of being available 24/7 on the internet, it is only to be expected that hotel sales will shoot up dramatically.

Using software applications such as the RevPAR Guru can help in this instance. After all, it is not enough to be available anymore. It is important for hotel revenue managers to concentrate at their yield management. They need to use inventory software and useful hotel software to find out when they should lower their rates and when they can charge more.

In addition, it is also important to take note that transforming the hotel’s website into a 24/7 booking channel is crucial. Certain individuals prefer to do everything online instead of getting up and calling on the phone for reservations. There is a huge opportunity in this segment. Implementing all this can lead to minimal distribution spending, enhanced loyalty, and increased hotel sales.

The first step into reaping all these benefit is to realize that internet marketing, search engine optimization, pay-per-click campaigns, and other online strategies can be useful. As the internet becomes an even more important part of generating hotel sales, hotel establishments that offer online booking solutions have a better possibility of attracting untapped markets.

3 Tips to Increase Hotel Sales This 2009

Even though the market is tough and almost every hotel is struggling to survive, it is still possible to increase hotel sales in 2009. It is just important to think of innovative ways to grow hotel revenue and provide value to the consumer. Jumpstarting hotel revenue starts by looking at the opportunities in the market with increasing hotel bookings, RevPAR, and average rate in mind.

Boosting profitability starts with knowing what your customers want and need. Determine how the inventory can be best utilized. In addition, providing a complete hospitality experience by setting up meeting space, restaurants, and fitness facilities can provide a good experience for the guests. Here are other 5 tips to increase RevPAR and increase your hotel revenue this year.

Cater to Families – hotel revenue managers can guarantee adjoining rooms to meet the needs of people traveling in groups. Charging a minimal surcharge will ensure that your hotel will be the preferred option compared to your competitors. And when you’re offering complimentary breakfast, make sure that there is a package for the whole family too. Just charge $5-$10 for the third or fourth child to get their loyalty. Adding a menu for children is likewise a good idea.

Last-Minute Getaways will Continue – most people have unpredictable schedules. That’s why last-minute bookings will still be prevalent even if majority of customers prefer to schedule everything in advance. With this in mind, make sure you take advantage of this opportunity by creating a suit package. Make sure you promote your last-minute deals online by utilizing email marketing, search engine optimization, pay per click, or adding your site to travel portals.

Closer-to-Home-Vacations – another apparent trend nowadays is that both leisure and business travelers are deciding to meet or take a vacation somewhere closer to their home. Though this may sound like bad news for hotels that rely on foreign travelers, it actually presents an opportunity for many. Consider advertising locally more than you used to. You might be surprised by the resulting increase in RevPAR and profit optimization.

Coping Strategies for Revenue Managers during a Recession

During a soft economy, hotel revenue managers struggle to increase hotel sales. Because hotel revenue was strong during the past few years, they are used to managing demand, not generating them. Out of panic or perhaps desperation, some are slashing rates too low. For the whole industry, this can be a bad signal because everyone will suffer. The already low hotel revenue might dip even further. Responsible discounting should be practiced by all players in the hospitality industry.

Beyond that, there are certain revenue management strategies you can implement to keep your brand strong and your profitability high.

Watch Your Competitors – it may be tempting to cut your price drastically to attract a large market share and boost profitability. But this strategy simply won’t work. You’ll just get one-off customers instead of loyal ones. Instead, you should research on the competitors’ hotel rates and look at market data. Here, you can decide how much you can lower your rates and which market you should lower it to.

Look at the Needs of the Clients – instead of looking at what your hotel can offer, start looking at what the clients actually need. Determine the requirements of your target market and strive to meet it. In addition, it is also important to be visible so look at specific mediums your customers frequent.

Improve Your Hotel Rate Distribution Strategy – distributing your service using online distribution channels is a method worth a look. At the same time, be aware that your hotel has various types of clients. If the 80/20 rule holds true, effort should be concentrated on the 20 percent market that gives 80 percent of your income.

Reduce Commoditization – it all comes down to what you can offer the customers. Revenue management is not about competing with the lowest price possible; it is competing based on giving value to clients. Ultimately, most customers will choose a hotel they think will give then the best value for money based on the location, facilities, and service of the hotel.

Tips for Effective Hotel Channel Management

With the recessionary economy today, travel decisions have changed dramatically. For hotel revenue managers to maximize profits, they need to understand where their customers are coming from. One of the biggest hotel booking channel is the coordination with meeting and travel planners. Understanding how this segment operates is important to maintain consistent profits and boost hotel profitability.

Golf, spas, and clubs are taking second place. Travel and meeting planners are pressured to come up with value for money proposals that are in-tune with the business environment. Expectations of the hotel facilities go back to the basics. Among the things that are necessary include reasonably price food and beverage, internet access, cable TV, desk, chairs, and comfortable bedding.

In addition, a lot of planners need to minimize travel expenses. Thus, most of the sites they choose for meetings need to be close to airports, the office, or the area should have affordable rental cars and other transportation. As you can see, yield management today is more focused on providing the most basic amenities with excellence. And as always, the hotel service of the establishment itself is of foremost consideration. The reasons why all these changes were made include:

Practicality – the practicality the hotel provides is a crucial consideration for planners. It is important to give an impression that the establishment offers value for money. And that everything that is needed by the guest is already provided by the hotel.

Reliability – before closing in and increasing hotel bookings, smooth transactions are required. No one wants to deal with an unreliable hotel with changing policies. Being reliable also help those in the hospitality industry build relationship and increase hotel sales in the future.

Building on these Relationships – once relationships have been established, it should be maintained. Hotels will be giving up their advantage if they don’t strengthen these types of relationships especially if it involves a profitable hotel distribution channel. Joining social networks, getting recommendations, and receiving good feedback will all inspire others to try the hotel.

Relationship Marketing Online Can Improve Hotel Sales

If there’s one thing certain in today’s economy, it’s the fact that hotels will not thrive if they cut-off their marketing budget. In this instance, it is important not to completely eliminate advertising and promotions; it is to make every cent count. Revenue management will play a big role in this instance. Making do with less is the key to optimizing hotel sales and boosting profitability. Delivering effective and customized messages through all major hotel sales distribution fronts including print, web, and through partnerships will establish an emotional connection with consumers.

It is a recognized fact that conducting a personalized campaign such as creating customized landing pages, demographic profiling, and joining online communities will enable hotels to connect with customers emotionally. This will deliver unforgettable experiences that can form continuous relationships and long-term profitability with the hotel.

Creating Relationships Online

Because of the relatively impersonal nature of online marketing, most hotel revenue managers mistakenly believe that just setting up advertising campaigns such as pay-per-click (PPC) and banner advertising is enough to generate online hotel sales. This cannot be farther from the truth. With the emergence of social networking sites, consumers are seeking personalized service from the hotel.

In addition, prospects, now more than ever, have access to information and reviews that were previously unavailable. Instead of looking at this as a threat, those involved in the hospitality industry can look at this as an opportunity. If they provide good experiences to their existing guests, these customers can provide good feedback on their service.

Positive reviews have the potential to significantly increase hotel online bookings and ultimately, improve hotel profitability. Existing customers can reach others through user-generated content sites and blogs. Meanwhile, hotels can further enhance relationships through email marketing, networking, and community participation.

Studies also reveal that search engine optimization and marketing also rank high in terms of generating internet revenue. Combining all these better business ideas will inevitably improve hotel revenue.

U.S. And Europe-Based Hotels Took a Big Hit in RevPAR

With the latest industry data being analyzed, it was revealed that the hotel industry took a sharp decline in RevPAR last April 2009 according to the Smith Travel Research. Even as the financial markets stabilize and the overall economy gain momentum, the hospitality industry is taking its time to respond.

The data revealed that all four major regions including Europe, Asia Pacific, the Middle East, and the Americas suffered from double-digit decreases in all fronts. From their occupancy level to their revenue per share (RevPAR), everything was down compared to 2008.

These revelations are not surprising at all for an industry that’s reeling from the effects of the economic downturn. Almost every known strategy is being implemented to increase hotel sales and boost profitability even during the trouble times. Some hotels are resorting to price cuts while some are focusing more on their hotel revenue management endeavor. Whatever the case, it is clear that the path to recovery will not be easy given this data.

In the Americas, occupancy declined by 11.3%. It now stands at 56.5%. The bad news doesn’t stop there because the average daily rate also declined by 10 percent. Meanwhile, RevPAR which is an important indicator of a hotel’s financial health, dropped by 20 percent as well. Now, hotel revenue managers need to determine what they should do with this inventory. It is the only way to maximize hotel profits.

In London, the same grim situation is happening. RevPAR has dropped by 9.7% in the capital, London, while it declined by up to 14.6% in the nearly provinces. It is apparent that the city experienced a drop in occupancy rate and average room rate as well. But the situation is not as bad in the United Kingdom as it is in the United States at this point. Occupancy is still at 71.4%. It is only a question of whether this rate can be sustained or improved.

Strategies that will Boost Hotel Sales during Tough Times

Anyone who has been reading this blog for some time has probably seen the importance of using the internet stressed many times over. This is because the power of the online marketplace in the travel industry is now undeniable. If in the past, travel agencies hold the power over the hospitality, it is no longer true now. For better or for worse, travelers are seeking the best deals from the internet. Smart hotel revenue managers need to utilize this tool to increase RevPAR and achieve profit optimization.

Using Third Party Websites

Third party websites have significant power in the travel industry. Even if these sites ask for a certain percentage in the profits, there are many instances when getting these services is a necessity. The hotel revenue management sometimes hesitates before using these services because of the high commissions. But this type of hesitation is a reflection of short-term strategizing.

In a lot of cases, the increased occupancy from online GDS systems could not have been generated using another technique. Unless the revenue managers can come up with ways to increase RevPAR any other way, it is a wise decision to use third party aggregator.

Complaints like this do not reflect the true essence of yield management. If travel portals are able to give you a base business, it becomes possible for you to increase hotel rates on the remaining inventory in order to improve overall RevPAR.

Generally, internet travel portals provide an international audience for your hotel. This is difficult to establish on your own. Since these sites are spending millions in advertisement alone, you can be sure that joining these sites would be an investment well worth it over the long term.

Give Travelers a Reason to Stay

With a few exceptions, hotels are rarely the end destination of travelers. They merely stay in the hotel because of its convenient location. If you want to increase hotel revenue, go back to the main target audience of your hotel. Evaluate the hotels competitive advantage and focus on it. For example, if you are near the city center, focus on location instead of trying to promote the spa inside the hotel.

Recognize that there are essential and non-essential reasons why clients choose your hotel. They will stay there for the location, for instance. But you can offer them the services of the spa once they know you exist.

Integrating Web 2.0 in Hospitality Revenue Management

Marketing and revenue management, at its core, have the same aim which is to improve profit and minimize expenses. Yet, the effectiveness and efficiency between the two systems can sometimes contradict each other. There is an undeniable tension because while both are aiming for increased hotel revenue, there is also the possibility that the brand integrity will be compromised. This is an issue that is sensitive for both parties.

Other issues that both marketing and hotel revenue management needs to deal with is the emergence of new technologies. With the internet becoming a significant player in the travel industry, it has now become more important to create a positive image online. This can be done through creating a website, forming partnerships, and most importantly making use of viral marketing.

New media capabilities, both informal and informal, can drive tons of traffic into a hotel’s website. Once the visitor goes into the site, there is a high chance that this will convert into sales especially if the hotel is in the location the traveler wants to go to. According to travel industry experts, the social media is the new television. Children, young adults, and even the older audience are familiar with the way the internet works. In fact, a significant portion of the population spends more time on the internet than watching television.

Now, the question that most hoteliers face is, how can they take advantage of viral marketing to boost profitability over the long term? The answer is both simple and complicated: building relationships with customers and prospects. This will enable the hotel to increase brand awareness through word of mouth.

It is true that paying for advertisements and other paid programs can still work. However, internet users have more choices than they do in television. They can’t be forced to think one way when there are so many choices available to them at the click of the mouse. What changes their mind and make them prefer one destination over the others are the opinions of their peers and the feedback they receive. If hotels are able to utilize viral marketing well, it will help them increase RevPAR and increase hotel sales overall.

How Yield Management Can Improve Hotel Revenue in 2009

Hotel yield management has always been an important concept for hotels especially because the demand for hotel inventory fluctuates according to the season. Through the years, hotels have been able to cope with the changing supply, demand, and profitability to be had from the market. But almost none of them have encountered the unique challenges present in 2009.

Many hotels are now fighting for their very survival. As the financial market sank in 2008, the reverberations of this trend are still being felt today. In this period of RevPAR stagnancy or decline, it is important for hotel revenue managers to look outside the box and create innovative solutions.

Creating a Revenue Management Strategy

It is important to go back to the essence of yield management. At its core, it means maximizing profits from a perishable source. So how is a hotel inventory perishable? Well, a year’s worth of inventory will lessens each day whether or not someone occupies it. Effective yield management helps create gains in revenue as against expenses.
Looking beyond the actual room rate to increase RevPAR into the value that the hotel can offer is a good yield management tactic. If the hotel revenue managers are attuned to the economy, they can cope with the situation better. This means they need to analyze market tendencies, research the hotel’s main market and submarkets, and track the performance of competing establishments.

Coming up with accurate figures will help hotels boost profitability especially during slow periods because it can potentially increase the hotel occupancy rate significantly. In addition, an effective revenue management strategy also necessitates the access to updated market area. For example, the vicinity of the airport, the number of surrounding offices, and the scenic location are all factors that might contribute to the increase or decrease of hotel sales.

Putting Yield Management to Work

The market is now wiser than ever before and this has affected how yield management is practiced in the hotel industry. In theory, these practices might be straightforward but in actuality, it requires you to be on top of your game.

If you previously offered hotel rate discounts for convention participants to lengthen the duration of their stay, hoteliers today need to know the tendencies of each segment in order to maximize it. Offering actual solutions instead of price cuts is the more effective way to increase RevPAR and ultimately hotel profits.

Market Demand: Should You Lower Hotel Rates?

Anyone involved in revenue management can reveal that the reveal that the hotel demand pattern nowadays is completely different than they were previously. Now, the question remains, will this trend continue or will it revert back to its previous pattern? This is a very important concern because it determines whether hotel revenue managers should “hang on” until the times get better or if they should think out-of-the-box and implement innovative measures that will ensure their survival in the future.

From all indications, the impact of business and leisure travel on hotel sales has been significant. Companies around the world are cost-cutting by reducing spending including corporate travel. Instead of cutting back on travel completely though, they are choosing shorter trips and less-expensive hotels. Meanwhile, leisure travelers have also changed their attitude. Many are opting for travel packages to save money. In addition, around 84 percent of all American travelers are trying to cut cost by staying fewer nights or taking more day trips.

It is apparent that the current trend has become the “new normal” today and in the future. This is because even if the economy picks up, old habits will be difficult to break. People who are used to spending less are most likely to set aside the same amount for their travels in the future. Also, as business and leisure travelers realize that there are a lot of deals (due to price cuts) out there, they will demand the same pricing level next time.

So is there a positive aspect in all this? Innovative hotel revenue managers will certainly answer yes. The current condition gives them a chance to increase RevPAR, improve electronic hotel sales, and boost profitability all at the same time. It is true that the knee-jerk reaction for most will be to lower hotel rates to maximize profits. Yet, the true essence of yield management doesn’t work that way.

Do not lower hotel rates too drastically. You may be thinking that “it is easy for you to say” but over the long-term, you will see that this is a good strategy in revenue management. The profitability of hotels lie on its perceived value compared to the competition. If your value proposition is low-rates, then you will not be able to increase hotel revenue as much as you can. Balancing hotel rate and its value is the task that good hoteliers should complete.