Using Viral Marketing Effectively to Increase Hotel Profit

Many hotel revenue managers have the misconception that effective viral marketing online requires a huge budget. But this is not necessarily the case as tourism authority for Hamilton Island, Queensland demonstrated. Basically, their campaign is simple: hire a blogger to talk about the island. The job, “Best Job in the World” was conceptualized. All the blogger needs to do is tour around Queensland, blog about his experiences, and get paid. The results of the campaign was astonishing, aside from the 7 million visitors recorded on the site, 34,000 people submitted their video application.

A 34-year old British guy named Ben Southall got the job. Tangible results of the viral marketing campaign are already being seen. Virgin Blue is not flying direct between Hamilton Island and Sydney. In addition, large Australian firms are also looking into the area for their events and conferences. There are some parallels between this tourism strategy and the hotel revenue management. And there are a few lessons that hotel revenue managers can use to increase RevPAR and boost profitability.

The most important aspect that should be recognized in this campaign is not the fact that they were marketing, but the fact that they were using social channels to achieve this level of success. Some tips to increase hotel profits using social media remembering that it’s not about the amount of budget you set aside – a big benefit of viral marketing is that it can create a big impact on a limited budget. In short, there’s no need to pay much to get the desired result. The main thing you need to remember is to have something worthwhile to share so people will talk about it.

Also, focus on content rather than traffic. The ultimate goal of most hotel revenue managers is to increase their site traffic, and hope that this will increase hotel sales. But to encourage people to share your products and services with their friends, content is more important.

A Closer Look at Hospitality Revenue Management and Internet Marketing

There is no double that hotel revenue management and internet marketing is fast coming together. At the Hospitality Sales and Marketing Association International (HSMAI) convention in Anaheim, California, the two topics were extensively discussed. People from both sides of the industry thought of ways to make the two disciplines complement each other to create demand in today’s turbulent economic times and beyond.

According to Eric Pearson, the senior VP of Brand Performance, Americas, Intercontinental Hotels Group, “revenue management and internet marketing professionals are the new rock stars of the hotel industry”. And indeed, it is easily apparent that the potential contribution they can give is significant.

The presentation he presented showed the types of benefits the hospitality industry can experience (ie. increase hotel sales, increase RevPAR, revenue optimization) if the two are used together. The strategy should be backed by concrete analysis and real time data to drive hotel profit growth even further.

Main Points of the Conference

In essence, the conference has several main points, one of which is the increased interdependence between hotel revenue management and internet marketing strategies. E-commerce, hotel pricing strategies, and revenue optimization techniques are all looked into. Right now, it was noted that forecasting the demand and knowing the buying behavior of the customer is the key to maximize hotel profits.

Meanwhile, on the breakout session “Social Media Strategies”, tips about what hoteliers can do to boost profitability were also discussed. Things like the best practices to measure ROI, identifying time and resource allocations, as well as employee policies were looked into. Attendants were advised to take advantage of the various measures available to them including marketing, sales, and other consumer information that’s readily available on social networks.

The lessons that were gleaned from the conference were very beneficial. If used wisely, it can contribute greatly to increase RevPAR and boost hotel profit.

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.

Rate Integrity at Times of Economic Crisis Part 1

Given today’s severe economic crisis, the concepts of rate parity and rate integrity feels like it came from another planet. Over the last few months though, hotel revenue management experts have been advising that dumping hotel rates is not the right strategy to create demand; this recommendation comes amid the worst recession in US history for several decades.

However, even an international brand like Starwood Hotels & Resorts is not immune to outside pressure. The company has cut its rates by as much as 50% to unload too much excess inventory. This cut affected its 600-something properties around the globe. It is important to note though, that cutting hotel rates must be the last option. Keeping a long-term mindset can benefit the hotel over the long run and increase hotel profits when the economy starts to recover. But here comes the question about hotel rate integrity:

How Will Rate Integrity Hold Up If Everyone Else Cuts Their Prices?

If 5-star hotels around your area starting lowering their rates to 3 to 4-star levels, what will happen to rate integrity? Everyone within the hospitality revenue management strategy will be pushed to do the same. In essence, rate integrity is the perceived consumer value. They know that they are buying an inventory that have a certain value and is set at the correct price.

Depending on the room amenities and season, they will pay a bit more or less; and they are willing to do so. Fencing and yielding are already accepted concepts but there is a strong acceptable psychological price range for consumers. If the value is set too low, they might start thinking that the hotel property has less-than-stellar amenities.

The question that many hotel revenue managers is itching to ask is, will their customers still pay $200 for their room if the hotel next door charges $100 or even below that rate? The truth is, the answer cannot be generalized. While many will instinctively say “no”, certain guests also have various factors to consider including their privacy, the service, and the number of people staying at the hotel. In general, hotel revenue management strategies that are quick to adapt to the changing environment are the ones that get most of the opportunities available in the marketplace.

Hotel Revenue Managers Need to Work Harder to Penetrate the Internet Marketplace

Interacting with your target consumers online is not the same as talking with them face-to-face. This is the reason why hotel revenue managers, and most companies involved in the hospitality industry must work even harder at enhancing end-to-end site experience for their users. Building a strong, long-term relationship with guests requires constant follow-ups, updates, and encouragement. According to research studies conducted by eDigital Research, online travel sites have to go beyond the “wow” aspect and into the real needs and wants of hotel guest to increase hotel profits.

The first eTravel Benchmark revealed that the online travel industry, as a whole, is actually competing with the cutting-edge technologies being used by companies in other industries. Consumers are now expecting consumer service, user-friendliness of the website, and good navigational structure. Failure to meet these requirements will mean that the potential guest might be disappointed in what the yield management strategy of the hotel.

Aside from hotel revenue managers, airlines, restaurants, and cruise websites also need to focus their attention to these findings. It will help them come up with effective hospitality revenue management strategy that will work over the long term. The research, in particular, revealed that most airlines usually have very poor customer service.

There is only one airline, British Airways, which was rated as one of the top 10. Meanwhile, British Airways and Virgin Atlantic did well for email customer support. While customer support problems are not hobbling the hotel industry at this stage, it is crucial to keep it that way. After all, it is actually easier to switch hotels due to the vast range of choices than to switch airlines.

As Derek Eccleston has said, “in a sector whose customers are particularly promiscuous – switching brands for a better deal, looking for recommendations and picking the purchase channel that most suits them at that particular time – failing to perform well across the board is more than a missed opportunity, it is commercial suicide.”

5 Effective Ways to Get More Friends, Followers, and Fans Online

So you’re interested in building substantial web presence on the internet, now the question is, what strategies will make it possible? There are actually so many ways to promote a website over the internet. Selecting the right strategy is a different matter.

Beyond search engine optimization (SEO) and pay-per-click (PPC) promotions, building a large following through social networking sites can encourage loyalty. Gaining customers in the hospitality industry doesn’t usually work when someone visits your site for one time; it is about gaining their trust and confidence. This is a good way to increase hotel sales and boost profitability.

Some of the strategies you can implement to increase RevPAR include:

Start with Individuals Who Already Know Your Company – try adding a Twitter or Facebook address on your company’s site and at the bottom of your email signature. Readers will be encouraged to sign up. And once they do, this is a chance for you to strengthen your relationship with them and improve hotel revenue.

Build a Social Hub – be sure to include a social hub webpage on your site. This can be the “About Us” section, just include options such as “Send to Friend”, follow, and become a fan options. This will enable them to be aware of new developments on the site as well as share your business to others.

Invite People – pepper your website with invitations for people to become your friend, follower, or fan. Once they accept your invite, they will receive notifications every time new developments are posted on your site.

Interlink Your Social Web – this is an incredibly helpful technique. If you already have thousands of “friends” in Facebook, place your Twitter links to your page as well. These will help you build a loyal fan base that is updated about your current promotions and hotel revenue management strategies.

Give People a Reason to Join – because social media has been abused by many users, it is inevitable for individuals to be wary of signing up or joining the social network of a company. Make sure you give them something to join whether it’s great content, cool offers, or discounts.

Try to implement the above-mentioned techniques and watch your hotel profits shoot up.

New Projections: US Room Rates Forecast Lowered by Smith Travel

The Smith Travel Research has released a finding the hotel revenue management industry has long been waiting for: its room rate forecast for the later part of 2009 and 2010. As the title implies, Smith Travel has significantly lowered its room rate forecast in the United States. This will definitely affect the hotels’ bottom line and their succeeding yield management strategies. As if that’s not enough bad news, the research agency also expects moderate declines persist through 2010.

Currently, it is projecting that the average daily rate will lower to 9.7 percent in 2009 and the revenue per available room will lower by 17.1 percent from last year. Just last April, the agency had projected RevPAR decline of 9.8 percent as well as a rate decline of 3.6 percent. Occupancy will also decline by 8.4 percent and will now amount to 55.4 percent, just slightly down from its earlier projection last April (56.5 percent).For 2010, the same declines in all three metrics are expected to continue. Smith Travel projects that the room rate will drop 3.4 percent, the occupancy by .3 percent and RevPAR by around 3.7 percent.

According to Mark, Lomanno, Smith Travel’s president the key to the hospitality industry’s recovery is rebound in group travel. Group business is an important segment that every hotel revenue manager should look into. It will have to return to 90 to 95 percent of its levels before the economic crisis. Reaching this figure will be very beneficial to hotel revenue management strategy because of transient demand. In addition, it will provide hoteliers with price leverage.

Overall, the hospitality industry is not going to recover anytime soon. And it will take a lot longer to reach the 2006-2007 levels. Even the demand at the first part of 2008 may be difficult to achieve. As Lomanno further added, “on an inflation-adjusted basis, it’s probably going to be longer than six years before the rates get back to 2007 levels.”

Online GDS Distribution vs. Traditional Booking Channels

The hotel distribution channels that are used today, specifically travel agents and contact centers, can be very expensive to maintain. And when you take the current economic situation into consideration, it becomes even more attractive. However, maintaining these hotel distribution channels is still important because certain customers will look for these services.

What hotel revenue managers can do is to supplement these channels to increase hotel sales and boost profitability. Using online hotel bookings can result to better distribution, lower operational costs, and higher improved efficiency. It has been estimated that the cost of sales through online and offline medium vary greatly. For instance, Hilton reported that they save an estimated $25 for the bookings they get online as compared to traditional hotel distribution channels.

Other hotel groups experienced the same phenomenon. Hyatt says it costs $3 as against the $9 they shell out in operating a call center. The 6 Continents as well as the Marriot Group reported $5 per booking if they use online GDS distribution systems. So what can you do to take advantage of travel portals and online distribution systems? Well, there are many techniques that can help you in this.

Link to Popular Travel Communities

Make sure that your hotel is included in popular listings of must-go-to hotels. Travelers trust the opinion and feedback they receive from reputable online communities. It is critical to ensure that your brand is established in these sites to increase hotel sales and reach profit optimization.

Aim to Rank Higher

Nowadays, it is very difficult to land at the top 10 results in the search engine results page if you target generic keywords. Since this is the case, make sure that the keywords you use are as specific as possible. If you are located in Florida Keys, then include this in the keyword. Optimize the name of the street if it is popular among travelers as well to boost profitability.

Effectiveness of Loyalty Programs in Increasing Hotel Sales

Because of the recession, American consumers are still at the phase when they are cautious about spending. They want to derive value from each dollar they shell out. Many hospitality revenue management companies operate under this concept. So they offer loyalty programs to encourage people to spend. But the question is, does this method really work?

Loyalty programs are nothing new in the hospitality revenue management industry. In the past, it has proven to be effective although it is certainly tricky to implement. In today’s business climate, using hotel loyalty programs to increase RevPAR and achieve profit optimization has only become trickier. Hotels.com, which commissioned the survey, points out that there are shortcomings that had been identified using this technique.

Some of the most obvious problems include its heavy restrictions, complicated fine print, and big redemption requirements. Majority of travelers would not be able to meet these requirements. In fact, only frequent business travelers, who are not looking for these deals anyway, benefit from it. Based on the survey conducted, travelers said that:

• 93 percent want to see improved terms on their travel memberships
• About half said that they were not able to use their benefits last year
• Around six out of 10 people want less restriction on how benefits can be used
• One third of those surveyed said that the bonus is not as great as was advertised
• More than a quarter dislike the fine print attached to their membership

If hotel revenue managers want to be more competitive and increase RevPAR, taking a second look at their loyalty programs may be worthwhile. It provides customers with a sense of value and “being special” at a reasonable cost to the hotel. In addition, if these clients really become “loyal”, then yield management can drastically be improved over the long term. This can increase hotel sales and boost profitability: the two things all revenue managers aim for.

Integrity of Hotel Reviews May Have Been Compromised

Can too much of a good thing be bad? It is, if these “good” things are actually based on lies and misinformation. Similar to almost all industries in the world, revenue managers are not immune to the temptation of tricking people in an effort to boost hotel profitability. For example, some have resorted to posting fake reviews on popular web portals to increase their web popularity. It isn’t so bad if they can live up to these promises. But the problem lies mostly in principle.

As if that’s not bad enough, some hotel revenue management staff has even resorted to bad-mouthing their competitor online. This unethical practice undermines the credibility of user-generated content available on the internet. People used to trust to feedback of their peers but with these kinds of developments. However, as more people find out about the unethical practices of certain firms, they might start to think twice before looking into hotel reviews online again. It is possible that they might simply revert back to their old networks for information.

There are many other reasons why faking reviews should not be done for the purpose of increasing RevPAR and boosting hotel sales. Popular portals such as TripAdvisor.com are now cracking down on unscrupulous hoteliers. In fact, the site has already posted a warning as well as a disclaimer telling users to be careful about the practices of certain establishments.

Tripadvisor.com is not alone in its quest to clean out fraudulent reviews. Beyond the hospitality revenue management industry, technology companies like Apple are also utilizing certain measures to preserve the credibility of its site. For example, the tech company had required customers to download or purchase its products first before they get a chance to review it on the site.

These developments should serve as a warning to yield management teams not to engage in misleading practices. Technology is fast catching up and soon, they will not only be penalized, their reputation will also be destroyed if they get caught.

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.

Avoid Hotel Price Cuts With These 5 Tips

At first, many hoteliers might have tried to focus on providing value to their loyal clients by giving excellent service, great amenities, and following-up with them. For many though, these efforts are not nearly enough.

Before giving hotel rate discounting a try though, it might be a good idea to look into relevant historical facts. Economic downturns and recessions are not a new phenomenon. Sure, many younger hotel revenue managers today might have focused more on keeping up with demand instead of stimulating it because their experience mainly occurred during the good times.

A look at the hotel price cuts from 2001-2002 reveal that this yield management strategy had short-term and long-term consequences. Instead of boosting profitability, it did just the opposite because it had damaged the entire hotel sector. When one hotel tries to increase occupancy by cutting their price, this is quickly copied by their competition. Once it happens, the trend is hard to stop and it might affect the organization for many years to come.

Fortunately, there are effective hotel revenue management alternatives that can increase RevPAR and increase hotel sales even during the bad times. Among these include:

1. Concentrate on Increasing Ancillary Hotel Profits – follow the example of airlines. A significant part of their revenue comes from fees and various charges. For example, United Airlines expects to derive $1.2 billion from ancillary revenue alone.
2. Consider Opaque Channels – these types of hotel distribution channels become more useful during an economic downturn. It will help sell excess hotel rooms without the lure of a discount.
3. Use Smart Discounting – drastic price cuts are not on the same league as smart discounting. Innovative and profitable packages can be created by the yield management team.
4. Study Customer Segments More Deeply – divide your customer base according to price sensitively. Afterwards, gauge how discounting will affect your hotel operations over the short and long term.
5. Think of Ways to Add Value – value-added factors are important to the customer. They need to feel that they are getting their money’s worth from your hotel. Provide value effectively and see achieve profit optimization.

Should hotel revenue management team go for hotel rate discounting to rev-up demand? While it goes against the better judgment of many yield managers, this option is becoming increasingly hard to resist. But with the tips above, there is no reason for you to resort to price cuts.

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.

Maintaining Rate Integrity to Increase Hotel Profitability

In the twenty years that revenue management was put into practice within the hotel industry, most of the philosophies and techniques that had been learned were from a strong economy. This presents a very challenging problem in today’s environment because hotel revenue managers are ill-equipped to deal with it. There is very little historical data that will show how yield management coped up during the tough times. Because of this, many hotel revenue management staff are still feeling their way and are committing trial-and-errors.

One notable mistake is that many companies engaged in the hospitality industry are dropping hotel rates in order to increase demand. This trend can be observed everywhere from the United States to Asia. Fortunately, there is still a significant number of hotel revenue management teams that has the current crisis in perspective. Even during the worst of times, many hoteliers strived to maintain rate integrity as not to compromise their future positions.

It should be noted that dropping prices is never an appropriate response. For one, it will take a lot of effort on the part of the hotel revenue management team to bring the price up again and increase hotel profitability. And for another, it will hurt the brand value so the hospitality establishment might not experience the full benefits of recovery once it happens.

Occupancy challenges can be solved with creativity, innovation, and appropriate yield management measures. It was widely agreed upon, in the Revenue Management Roundtable in Singapore, that strong emphasis should be given to the investment in tools, technology, and people. This is the best way to cope with the downturn. Going back to basics is important. If you get this right, then the hotel is operating on solid foundation. In no time, the establishment can experience more bookings, increased RevPAR, and profit optimization.

Would It Be A Good Idea to Use Twitter in the Hotel Industry?

During the past several months, Twitter has gained a lot of momentum and attracted everyone from techies to celebrities. Popular figures such as Oprah, Demi Moore, and successful internet marketers all use this tool to enhance their relationships with fans/subscribers. Sysomos Inc., a leading social media research institute, decided to conduct a study on how this social marketing giant became successful. Its data contains the trends about Twitter’s growth and how it is being used by millions around the world.

• 72.5 percent of Twitter users opened their accounts in the first five months of this year


• 85.3 percent of users update their accounts less than one time a day


• 21 percent never posted a single Tweet


• 5 percent of users account for 75 percent of the site’s activity


• 93.6 percent have less than 100 users following them


• 92.4 percent of users follow less than a hundred people


• New York has the most number of users


• 50 percent of all updates are posted using mobile, web-based, and other tools outside Twitter.com


• More women use Twitter than men

So what do all these figures have to do with hotel revenue management? It is crucial to note that Twitter experienced astronomical growth in a very short timeframe using one technique: viral marketing. Understanding the concept of viral marketing is important for the effective online and offline promotions of hotels. It is a great way to increase RevPAR and maximize hotel profits.

In today’s environment, it has become more challenging to attract a decent market share in the hotel industry. There are many important lessons that the Twitter example can give in yield management. First is not to underestimate word-of-mouth on the internet. And second, to build a core group of loyal clients or users that can sustain its operations.

Hotels can also use Twitter as a tool to promote their services on the internet. This will increase bookings and improve hotel profitability when done properly. Establishing a connection with the top users can be helpful in accomplishing this goal.

Knowing Your Customers Though Online Travel Communities

If you were asked how well you know your customers right now, what would you answer? Beyond demographics, it is important to understand what your customers are really like.

Many hospitality companies have composite profiles that give details about their customer’s job titles, frequency of travel, and purpose of visit. But while it is important to know these things, it is no longer enough. Relying on impersonal information makes it difficult for hotels to connect to their clients at the deeper level. In fact, some hotel revenue management staff even describes it as trying to converse with a cardboard. Experts at yield management know that customers are not likely to respond if the offer does not suit their needs.

It is critical to finally recognize that hotel guests are real people. They have genuine needs, issues, and motivations that drive their behavior. Companies in the hospitality revenue management industry must know them deeper in order to respond to their concerns. In addition, they are also very dynamic and their situation can change easily. For example, in this troubled economic times, some of them might have lost their jobs, lost money on investments, or are otherwise just cutting back in preparation for tougher times ahead.

In this kind of critical condition, better monitoring is not an option; it has become a necessity for hotels to survive and thrive. More comprehensive market research is required to boost profitability. But aside from relying on historical data, it might be a good idea to get connected to the consumers now. Joining online communities to observe and learn is highly recommended.

Online communities are a good place to pick the customer’s mind and increase RevPAR. Join a community that has enough members to get a wide range of perspectives. It will also give you an idea about what general sentiments are like. Better yet, you can start a discussion yourself so you can know their feedback and suggestions.

Information: Key to Successful Social Networking in the Hospitality Industry

In an increasingly interconnected world, social networking has become an integral part of hotel revenue management or any type of business organization in the service industry for that matter. Companies have struggled to discover how to take advantage of this opportunity. New research has shown though, that the to being successful on social networking is information acquisition. It will help boost hotel profitability.

This finding was recently published at the Information Technology & Tourism Journal. The reasons why people join social networking are because of the Social-Psychological and Hedonic benefits it provides. Their attitude towards online social communities such as VirtualTourist.com and Tripadvisor.com is heavily influenced by this.

Why Information Acquisition is Important

It is easy to assume that the reasons people join hotel social networking sites is because of the sense of belonging it provides. However, studies show that this reason only comes second to information acquisition. Consumers primarily search the internet for updated information, deals, and travel news. Meanwhile, hedonic benefits such as entertainment and amusement come third. Hotel channel management needs to focus on the three factors.

The survey, which these findings are based on, was divided into five categories including: benefits of online community activities, attitude towards the travel community, level of participation in these travel social networking sites, frequently used sources, and demographic profiling. Majority of the respondents were students and professionals in their 20’s and 30’s.

In essence, the research findings just proved what most hotel revenue managers knew all along. As according to the author, “tourism is one of the highest involvement industries” and because of this people “want to get as much knowledge as they can do reduce risk”. If you’re an hotelier, you can be sure that your company will benefit with increase RevPAR and hotel sales when you provide the necessary information.

In addition, providing relevant information that is up-to-date will help the travel community overall, attract web visitors, and increase your chances of converting these searchers into actual guests.

Hotel Industry Expectations for the Second Half of 2009

According to the PKF Hospitality Research, RevPAR which is an important indicator of the hotel industry’s health, will bottom out in the third quarter of 2009. After months of decline, it is expected that the industry will finally rebound. This news is bound to give hotel revenue managers around the world a sense of relief. The escalating trend of declining hotel revenue began in the third quarter of 2008 so it really does come full cycle if this trend reverses itself in a one-year timeframe.

The President of PKF Hospitality Research Mark Woodworth said that while their finding is welcome news, 2009 will still post the “weakest year on record for the domestic lodging industry”. In addition, revenue per available room for 2010 will still be disappointing even if it is not as bad as this year. Taking into consideration the employment level and the demand for lodging, it becomes clear that RevPAR can decline by 17.5% overall for 2009. In 2010, decline in RevPAR will not be as bad but it is still at 3.5%.

These factors point to the conclusion that effective yield management should still be practiced by the revenue management team. Also, the hotel revenue management strategies such as increasing online presence, using hotel software, and training the service staff should be continued and further strengthened to give hotels a competitive edge.

Mr. Woodworth further added that “If you are wondering when we’ll start to see actual growth in RevPAR, then you’ll have to wait until 2011” though the “operating environment is going to get a little less painful”. The decline for lodgings in the United States peaked during the first quarter of 2009 at 8 percent. According to the Hotel Horizons, demand will continue to regress but at a diminishing rate.

For the remainder of 2009, the projected quarterly decline is 4.7 percent on the average. Overall, hotel revenue will decrease by 16 percent this year because of the decline in RevPAR. Beyond the year 2009, there will be an average annual increase of 3.2 percent in the next four years according to the same study.

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.