Well, that’s where “hotel rate types” come into play. They act as the secret ingredient that can help you achieve this fine balance of setting the right price at the right time.

Think of rate types as unique pricing strategies tailored to different scenarios and guest segments. They’re like your toolkit for welcoming all sorts of guests, whether it’s during the bustling peak season or the quieter off-season.

If you’re new to the hotel business or a seasoned pro, understanding these rate types can make a huge difference in your hotel’s financial performance.

In this blog, we’ll break down the various hotel rate types, and how they can benefit your business and provide actionable strategies for you to maximize your revenue and occupancy.

So, let’s dive in!

What are hotel rate types? 

rate types are designed to cater to different guest preferences, needs, and booking behaviours. Each rate type comes with its own set of rules, restrictions, and benefits.

Here are some common hotel rate types:

• Standard Rates: These are the regular rates offered by hotels. They usually come with flexible booking and cancellation policies, allowing guests to make changes or cancel reservations without incurring significant penalties. 

• Non-Refundable Rates: Non-refundable rates are typically lower than standard rates but come with stricter cancellation policies. Guests who choose these rates commit to their reservations and do not receive refunds if they cancel or modify their bookings.

• Advance Purchase Rates: Hotels offer discounts to guests who book their rooms well in advance. These rates encourage early booking and help hotels secure reservations ahead of time.

• Last-Minute Rates: Usually, last-minute rates are discounts offered to guests who book rooms on short notice. They are designed to fill vacant rooms that might otherwise go unsold.

• Package Rates: Package rates bundle room reservations with additional amenities or services, such as breakfast, spa treatments, or tickets to local attractions. These packages provide added value for guests.

• Corporate Rates: Hotels often negotiate special rates with businesses for their employees who travel for work. These rates are typically available to corporate clients and their employees.

• Group Rates: Group rates are tailored for parties booking multiple rooms, such as wedding groups, tour groups, or conference attendees. They often come with specific terms and conditions, including a minimum number of rooms to qualify for the discount.

• Member or Loyalty Program Rates: Many hotel chains have loyalty programs that offer exclusive rates and perks to their members. These rates can include discounts, room upgrades, and late check-out.

Each rate type serves a specific purpose, catering to different guest segments and booking behaviours. Hoteliers can strategically use these rate types to optimize their revenue and occupancy levels, while guests choose the rate type that best suits their travel plans and budget.

Benefits of Using Various Hotel Rate Types

First, let’s delve into the numerous advantages of using various hotel rate types, shedding light on how they not only maximize revenue but also enhance the overall guest experience:

• Catering to Varied Guest Preferences:

Different travellers have varying needs and budgets, and by offering a range of rate types, you can cater to these diverse preferences. Standard rates may appeal to cost-conscious guests, while package deals can entice those seeking value-added experiences. Corporate rates, in turn, cater to business travellers. This diversity ensures that your hotel remains an attractive option for various guest segments, ultimately leading to increased occupancy.

• Boost Occupancy During Off-Peak Times:

Using different rate types can significantly impact your revenue. Through strategic pricing, you can optimize revenue during peak seasons by offering higher rates, and fill rooms during off-peak periods by providing special promotions.

• Enhance Guest Experience:

Package rates that club room reservations with amenities or services such as dining vouchers or spa treatments can enhance the overall guest experience. Guests often appreciate the convenience and value of having everything they need included in one package.

• Compete Effectively:

Having a range of rate types can set your hotel apart from the competition. In a highly competitive market, this flexibility allows you to be agile and responsive to changes in guest preferences and market dynamics. Being able to offer unique deals or negotiate corporate rates with local businesses can give you a significant edge over rivals in your area.

• Ensure Long-Term Viability: 

Diversifying rate types often leads to guest loyalty and repeat business. When guests find rate types that match their needs and preferences, they’re more likely to become loyal customers. This loyalty can translate into repeat bookings and referrals, reducing your reliance on costly marketing efforts and increasing the lifetime value of each guest.

How to Use Different Hotel Rate Types to Maximize Revenue and Occupancy? 

Maximizing revenue and occupancy in a hotel involves the strategic use of various rate types effectively. So, let’s break down how you can use different hotel rate types to earn more and fill up your hotel rooms. 

Start by figuring out the kinds of people who might want to stay at your hotel. Each group of people has different likes and dislikes, as well as how much they can spend. Make sure your prices match what these different groups of people want. Reduce rates during low-demand periods to attract budget-conscious travellers and raise rates during high-demand periods to maximize revenue.

Understand your property’s booking patterns, trends, and guest preferences. Based on that you can adjust your property’s rates accordingly. You can also leverage seasonal promotions and flash sales to generate buzz and boost occupancy during specific periods. 

Hoteliers can also encourage guest loyalty by offering exclusive rates and perks through membership or loyalty programs. Offering competitive group rates and accommodating large bookings can fill rooms during low-demand periods. Thus, different rate types can be adjusted accordingly to maximize your occupancy and drive revenue throughout the season.

Using Automated Tools & Software to Implement Various Rate Types

 A revenue management system (RMS) is a software application that can help you optimize your pricing strategies. RMSs can track demand, forecast occupancy, and set rates automatically. 

An automated revenue management system empowers hotels to make data-driven decisions, adjusting rates dynamically based on real-time factors such as demand, competitor pricing, and historical booking patterns. 

These systems optimize revenue and occupancy by automatically adjusting rates across various rate types. Moreover, reservation management platforms enable hotels to offer a wide range of rate options online, making it easier for guests to find and book the rates that best suit their needs.

A well-implemented revenue management system can be a game-changer for your hotel, automating your complex pricing decisions and ensuring that the right rates are offered to the right guests at the right time. 

“ eZee Mint is one such smart and user-friendly revenue management software that applies intelligent pricing strategies.”

The post Strategies for Maximizing Hotel Revenue through Rate Type Management appeared first on eZee Absolute.

To reach such heights in terms of profit or revenue generation one needs to have immense knowledge of the hospitality industry and its marketplace. (As knowledge alone creates all the difference.)

This is why every hotel owner puts a lot into serving its guests but only a few get an impressive revenue collection. 

Most of the time, this happens because of the fragile pricing strategies hoteliers set up without analyzing guests’ behavior and insights into the latest marketing techniques.

In one of our old blogs, we previously discussed various pricing strategies that hotels should be aware of. But in this article, I aim to expand upon that list and delve into some more unique pricing strategies to help you level up your revenue generation game.

So get ready and follow along if you want to attain excellence in the revenue department of your hotel.

Why Is It Important to Set Pricing Strategies?

The sole purpose of any pricing strategy is to optimize your revenue.

Let me be clear that setting prices on your rooms and services doesn’t count as a pricing strategy. It is how you mold and manipulate your prices according to the market scenario and your guests.

Let’s examine this with a scenario:  

All the hotels near your property are struggling through the shoulder season. To stay afloat and drive more bookings, they cut down their prices, whereas you kept them intact. Turns out, they came out well and you experienced a great loss.

Therefore, you cannot just put up the prices and let it be. It is a process that needs constant revision. You must have a great sense of the current market and ongoing trends in price modulation to do so.

 But I’ve got it all covered in the next section Let’s hop in, shall we?

Pricing Strategies to Optimize Your Hotel Revenue

Hotel revenue management is a tricky affair and there’s no single magic formula to optimize it. You require a blend of various strategies to ripe out the maximum benefits.

This is why I am mentioning some unique tactics for you to skyrocket your hotel revenue. 

1. Value-based pricing

The simplest pricing strategy is value-based. It is the cost that your service must get in return.

For example, a smoking room will have more price than a non-smoking room because it has an additional service that tops up its value. Same way, beach-facing rooms will have more value and thus more price.

So, what you are providing to your guests, how much that particular service costs you, or its value range across the market decides this type of pricing.

Value-based pricing is never negotiable. Because it drives you the minimum profit your rooms & services deserve.

2. Package pricing

Nowadays travelers lookout for good packages instead of arranging things separately. So it is important to build your packages and let your guests avail them at the right prices.

By including taxi/cab rides, complimentary meals, a local guide or tour, co-working spaces, a spa, laundry facilities, and much more in a package, you can make comparatively high revenue.

What you do is: keep a room booking, let's say at ₹8,457 for a week (high from its usual value), and a package with all the facilities at ₹9,849. Your guest will perceive that within a minor difference, they’re getting so many things.

Most of the time, they do not require all of these facilities but still tend to get overwhelmed by them and sign up willingly.

Even if they use them all, it is anyway beneficial for you. Because it helps in upselling your services.

3. Captive product pricing

Captive product pricing is to set a combined price for two or more services that are co-dependent.

For example, an ordinary room costs ₹5,000, and using the swimming pool has an additional charge of ₹800 which makes the total ₹5,800. However, if you choose a poolside room that costs ₹5,600 then there are no additional charges for using the pool.

This is how you can increase the sales of your poolside rooms. So every person who wishes to swim will ultimately buy your poolside room that costs high.

This pricing helps you increase the sales of your best rooms by adding a complementary thing to them.

4. Market-penetration pricing

When you introduce a new service or upgrade your hospitality, it is important to make it popular and known among your guests. This is the only way to make it win its place in the market.

To give this new service optimum exposure, you need a market-penetration pricing strategy according to which, you must keep it partially free at the start and increase the price with time.

If you have opened an in-house restaurant at your hotel, you can keep the first meal free for all your guests. This will market your restaurant effectively and its sales will increase fast.

5. Psychological pricing

A psychological pricing strategy is important for attracting your guests. It makes your price look good and affordable.

This price plays with your guests' psychology and convinces them that it is reasonable. The basic example is putting ₹999 for the swimming pool charges instead of ₹1000. This difference of one number somehow creates a lot of differences in the human brain.

Besides this, promoting offers and discounts is also a psychological game that excites your guests. They give in quickly if you showcase that a ₹9,899 package is available at only ₹7,599 if they book within a day. Note: This is how you make sales in your shoulder season.

Learn more about aligning your marketing strategies with your guest’s psychological responses below.

Psychological Principles for Better Hotel Marketing

6. Promotional Pricing

This is the average and the comparatively lowest price you use to promote your hotel. It helps attract your guests to your website. With this, they explore other things you offer and increase your chances of getting bookings.

So if the lowest room or package that is available at your hotel is ₹1,899 and the highest package is ₹10,899 then your promotional price must be the former one that is lowest.

It will amaze your guests that your packages are starting at such affordable prices and thus, they will visit your website. This will drive more traffic to your website and will increase your bookings and revenue altogether.

 Promotional pieces are mostly the one that highlights the least starting prices of your rooms.

Dynamic Pricing to Ace Your Strategic Game

All the strategies I discussed above are proven for optimizing your revenue.

But what is the real foundation for them?

Dynamic pricing!

The marketplace is ever-changing. What is selling out this week might not get any attention in the upcoming weeks. Therefore, you need to change every instant. (I am not exaggerating)

Recently when I was planning to book a homestay through an OTA platform, I was amazed at how quickly the price was fluctuating.

When I visited this XYZ property many times, its price went up within hours because they tracked that I am interested in it and will book eventually. After that, I started exploring other properties for a couple of days. Guess what! The rate of that XYZ property dropped again.

A dynamic pricing strategy analyzes every aspect of the marketplace and sets an ideal price for your services. It keeps fidgeting rooms’ prices across all your online profiles. This fluctuation in price ensures maximum profit at any given time.

But making all these calculations and analyzing the prices manually is NOT easy. You need a perfect revenue management system to do so. You can check out eZee Mint which streamlines the process of setting intelligent pricing strategies at the right time to optimize your revenue.

 

The post Secrets to Boost Your Hotel’s Revenue: Pricing Strategies You Need to Know appeared first on eZee Absolute.

While many hotels are making the best out of it to boost their bottom line, some are still thinking of it as a mythical unicorn.

I kid you not, most of the hotels refrain from opting for any sort of revenue management services.

Who is to blame for it?

The hotel revenue management myths that are swirling around are the real reasons hotels are so skeptical about it.

So, I decided to debunk some common myths about revenue management systems and managers and make your life easier. 

Let’s Bust Some Revenue Management Myths

Before going ahead to shoot down all the misconceptions, I have a little something to say.

“Do not shy away from revenue management. It helps you better manage resources, predict customer wants and needs, and come up with the most effective pricing strategies to boost your hotel’s revenue.”

Myth #1: Automation will eliminate revenue managers

With the rate at which automation is invading industry after industry, different viewpoints have emerged in the revenue management community. Many believe that revenue managers’ jobs would be at stake.

However, that’s just one of those hotel revenue management myths.

Although revenue management software is instrumental to many hotels, it is a tool that helps revenue managers do their job much more efficiently, eliminating manual tasks.

For example, a hotel utilises various channels to drive booking. But imagine how tedious it would be to adjust prices across all the distribution channels. This is where a revenue management system comes in; it does the job without having to individually log in to each of those channels.

Revenue managers are at the heart of this entire segment, without their analysis and decision-making capabilities, it is not going to be easy for hotels to reap the best benefits.

So, sit back and relax, revenue managers aren’t going out of the scene.

Myth #2: Revenue management is only for mathematics enthusiasts

When we talk about aspects like pricing, revenue, or budgeting, many think that it is the job of someone who has a strong grip on mathematics.

But in reality, it is not true again. Mathematics is a part of it and not the entire segment. If you’re a mathematician, perfect. If you’re not one, no problem at all, you’re still good to go.

Rather, hotels when hiring revenue managers, look for people who have an understanding of a hotel’s business indicators and possesses analytical thinking.

After all, it is all about predicting guests’ behaviour, optimising room availability, and selling rooms at the right price at the right time to the right guest, thereby maximizing revenue.

Myth #3: Changes in pricing must be handled by revenue managers themselves

Just like the ones who think that automation is going to wipe off revenue managers’ jobs, there is another set of people who have a misconception that price changes cannot be automated.

I really wonder who spreads all these myths of revenue management.

Let me clear this for you.

A revenue manager cannot spend all day logging into various channels and changing prices. That is the reason there are automated revenue management systems that do the job, allowing the revenue manager to focus on making important decisions.

Myth #4: Revenue management systems are always expensive

Another misconception that holds back hoteliers from incorporating a revenue management system is that ‘all these systems are expensive’.

Again, this is not true. Not all revenue management systems are expensive.

This myth has gained momentum because RM services are being adopted majorly by high-end accommodation providers. And this makes the budget players feel that they need a humongous amount of money to reap its benefits.

That’s not all. Initially, large hotel chains and properties were well aware of revenue management and they were quick to opt for it. But many budget hotels have refrained from learning about such strategies.

And I am not making this up at all, because I have had the first-hand experience.

In 2019, I was in Matheran. I booked a nice hotel. The property wasn’t a big one but it was beautiful and gave me a luxurious experience.

I was wondering how come they have not been able to scale. 

They had so much potential — the staff, service, rooms; everything about it was just so perfect.  But despite all of it, they were having a tough time increasing their profit.

A day before my check-out, I had a long conversation with the hotel owner. To be honest, I was surprised to know that he thought revenue management services are only for high-budget hotels as they are expensive.

Not just that. Someone even told him that it’s risky and he’d lose all his money.

So, you can imagine how many such hotels have half-cooked information like this.

Myth #5: Budgeting and demand forecasting aren’t important in revenue management

When it comes to hotel revenue management, budgeting and demand forecasting play a crucial role. And if someone has told you otherwise, you can just let that advice go; it is just one of the myths of revenue management.

While hotel budgeting helps in estimating revenue and expenses, demand forecasting allows revenue managers to predict future guest demand over a defined period.

Demand forecasting, Budgeting, and revenue management are all interlinked. For a smoother and profitable functioning of a hotel, they need to go hand in hand.

Meaning, when you have such information at hand, it gets easier to make informed decisions regarding a hotel.

Myth #6: Outsourcing revenue management services aren’t worth

Whoever has started this myth must have not checked the pros and cons of having revenue management in-house vs outsourcing.

Let me explain this to you with a scenario.

An in-house revenue manager, no doubt, will have a lot of knowledge and experience. But if you look closely, s/he spends most of their time working with only one property i.e. your hotel.

On the other hand, an outsourced revenue manager has more exposure. S/he works with various other hotels and gets a wide view of the industry.  

Meaning, they are skilled and have carefully developed techniques that help you improve your bottom line.  

Investing to outsource revenue management services is absolutely worth it. Just make sure the service provider has a proven track record of its work.

Myth #7: Overbooking is a curse and should NEVER be used

Overbooking can make or break a hotel; it is like a double edge sword.

However, calling it useless is one of the huge misconceptions about hotel revenue management.

If you aren’t aware of overbooking, it is a strategy used by revenue managers to acquire more reservations than the number of available rooms to achieve the highest possible occupancy rate.

What does a hotel want? 

100% occupancy rate and better revenue. 

If used cautiously, with proper planning, analysis, and calculation, it can significantly help you achieve the same.

Myth #8: Revenue management doesn’t help hotels already in loss

I am sure many of you have heard this — “You’re already in loss/not making enough revenue. Why would you want to invest in some revenue management service?”

If you have received such advice in the past and believe that revenue management services cannot help hotels in loss, then let me burst your bubble. It is a huge misconception.

The prime job of a revenue manager or a revenue management service provider is to bring you dollars.

Now, if you’re wondering how would you pay for such services? There are a lot of service providers who give you a trial period to test their offerings. You can always opt for them.

Not just that. Many service providers only take payment once they achieve their goal.

So, do look out for such service providers if you’re having a tough time paying upfront.

Myth #9: Hotels under construction shouldn’t consider revenue management

Your hotel is still under construction? No worries, you can still opt for revenue management.

Many hoteliers wait for their hotel to start operations and then go for services like revenue management. However, that shouldn’t be the case. 

A hotel needs to be prepared from day one. And this is exactly what revenue management helps you with.

While the property is still in construction, you can leverage it to learn about the market segment, sales strategies, carry out compset analysis, work on pricing research and processing, and forward planning of market demand cycles.

Do you see how prepared you’re going to be when you cut that ribbon?

Not to mention, if there are provisions, you can actually make changes to your hotel rooms as per what you have analysed. 

The post 9 Common Myths About Hotel Revenue Management. Let’s Debunk Them. appeared first on eZee Absolute.

There was a time when excel sheets were becoming all popular and every hotel was using it.

BUT, if you turn the pages of history, you would see that it didn’t take technology much time to replace it.

What’s next?

Hotels that could see this change coming were prepared and opted for all the latest technologies quickly. And the rest had to struggle and eventually switch.

This is how it works and is going to be working the same way for years to come. Meaning, that future-ready hotels are going to have a great advantage in this industry. 

Now, “Is your hotel prepared for the next wave of transformation?” is the question that needs to be addressed.

The Importance of Being Forward-Looking for Hotels

Hoteliering isn’t an easy job. You have to constantly keep a keen eye on what’s happening in the industry to deliver top-level services to your guests. 

Let me tell you about this with a small example about a hotelier cousin of mine who had a bad downfall.

(Changed the name to Shivani to keep safe her privacy)

Shivani was a hospitality enthusiast. Back in 2012, she was running a famous backpackers hostel called “The Den” near the Mawlynnong village in the East Khasi Hills district of the Meghalaya state in North East India.

The Den was the bee’s knees among backpackers, solo travelers, and bikers back in those days. But then in 2019, Shivani had to shut The Den because business was going super low and eventually hit the rock bottom.

When I started writing this blog, I had this section in mind already. So, I decided to have a colloquy with my cousin and gather a few points.

Here are a few points in Shivani’s own words about The Den’s downfall:

1. The very first thing that affected our business is that we neglected market analysis. I was a little rigid and always thought that things are going to be great throughout. However, I failed to notice that the preferences of travelers were changing every year.
2. The Den was a beautiful abode. BUT, it wasn’t tech first. You all may find it funny and silly, but we didn’t have a property management system or anything technological. We were on excel. And I regret it. Really!
   I have a piece of advice for all the hoteliers out there. Accept it or not, technology is crucial (the right set of technologies, to be precise). You just cannot scale without it.
3. Our hoteliering practices, especially mine, were old school. See, sometimes you feel that being old school is what makes you authentic. But it doesn’t work all the time.
   Travelers today aren’t the same as they were a decade ago. They want internet, comfortable rooms, complimentary breakfast, etc. Budget traveling is rare nowadays; people want facilities even if it costs them a few more bucks.
4. Another mistake was that we never had a strategy. We never strategized how to price our rooms, what amenities to include, etc. There were times when we offered way too much to our guests at a minimal price. Wish I could go back in time and tell those guests, “hey, you need to pay 2000 extra for that.”
5. We didn’t have a roadmap. We were just operating and living in our small happy world of serving guests. We never thought about how we would want The Den to look like or become a few years down the line. And it was a BIG mistake.

How to Future-Proof Your Hotel?

Future-proofing your hotel is basically about keeping abreast of all the happenings in the industry. And there are certain elements that you need to incorporate ASAP.

Let’s look at everything that can future-proof your accommodation business.

1. Streamline and automate operations

I cannot emphasize enough on this point. We are 2022 and if hotels are still around from one department to other, then there’s something really wrong.

This is a tall straightforward statement but true.

If you want to offer a great guest experience, you need automation. And that can happen when you leverage the power of technology.

There are various management systems that automate your hotel’s operations end-to-end.

For example, someone makes a booking at your hotel website, and in a manual scenario, you have to track that booking and update it on your system, excel sheet, or register. But if you have an automated system, the room inventory would get updated without leaving any space for error.  

Not to mention, the major benefit is your hotel staff is now left with more time that they can utilize to communicate with guests and offer great hospitality.

2. Move your hotel to the cloud

Now, I say move your hotel to the cloud, I don’t mean using a slingshot and landing on an actual cloud. Rather, I mean to leverage the power of cloud technology.

A cloud-based property management system is a great example of this. It runs on SaaS (Software as a Service) platform and offers an easy way to manage your operations.

To be more specific, all it requires is a browser and a favorable internet connection. Every function is executed and the information is stored in the cloud.  So, cloud hotel software does not need any IT personnel or department for maintenance.

Not to mention, with the cloud, you can manage your hotel operations from anywhere at any time.

Want to know more about the cloud? Here are three articles you might want to read:

• Why Should Hotels Move to Cloud PMS?
• Cloud vs On-Premise PMS for Hotels: Which is Preferable?
•  How Cloud Can Enhance Guest Journey at Your Hotel

3. Ace your hotel distribution game

When it comes to selling rooms, it goes beyond emails, travel agents, phone calls, walk-ins, and even booking from your website. You as a hotelier have to explore varieties of channels and see from where you can acquire reservations.

Simply put, you need to have a strong distribution strategy in place which revolves around a mix of channels through which you sell hotel rooms.

Now, the concept of hotel distribution is vast and requires you to understand various aspects of it. Be it about OTAs, direct bookings, pricing strategy, or maintaining rate parity, you must get your hands on everything. 

4. Create a pro-employee and pro-guest culture

For a hotel, irrespective of the shape, size, and type, to become future-proof, it is important to create a culture that is employee-centric and guest-first.

Why so, you ask? Because technology, strategies, and everything else works only when your people are happy.

Hotel staff who are valued as a whole person and not just an employee always delivers. Satisfied staff means satisfied guests, and this leads to profitability and scalability.

So, what does the culture look like at your hotel? Something similar to what is mentioned above?

If yes, you’re doing great.

If not, it’s never too late to care about your people.

5. ALWAYS stay true to your budgeting

Budgeting is a critical part of a hotel’s overall success.

But how is it related to making your property future-proof?

Well, the way I think of it is that no matter what you incorporate into your hotel, you need to have a budget for it. Anything that affects your budget is something that might hamper your accommodation business.

In simple words, what I mean by this is that you have to know how much money is coming in and going out of your business.

For example, you have analyzed and understood that your hotel would need to invest in a lot of technological elements. But do you have the budget to deploy all of them? If yes, great. If not, you might want to consult your finance personnel and check what you can afford right now, for what you should wait.

If you want to learn more about hotel budgeting, here’s a detailed piece of article.

6. Keep a finger on the pulse to check for trends

Whenever you decide to become forward-looking for your accommodation business, you must start checking on trends.

When I am saying trends, I don’t just mean travel trends, but technological and operational trends as well.

For example, is your hotel equipped with a marketing automation tool to send timely emails to your potential and existing guests? If no, then this is something you might want to incorporate.

Now, you can top this up with compset analysis, which is basically evaluating your competitors’ services and products in order to strategize your accommodation business’ growth.

Simply put, you get a clear picture of what you are up against, what you’re missing out on, and where you’re leading.

7. Timely analyze your hotel’s performance

Before you could make your hotel all great, you have to first understand how your business is faring.

What does the popularity of your property look like in the industry?

What is the occupancy rate of your property?

How much investment do you make every year — on marketing, operations, technology, etc.?

And is your hotel making enough revenue?

These are just some of the surface-level questions you need to find answers to. If you have them, then you’re pretty close to understanding your hotel performance.

All in all, analyzing the performance of your hotel or auditing helps you develop a much-needed trust in the market and ensures that your hotel business is free and fair from all types of frauds, losses, and everything in between.

8. Double down on revenue management

There’s this hotel that has the same pricing throughout the year. And on the other hand, there’s another that sets room pricing based on demand.

Which one is more likely to make a better profit? The former or the latter?

You know the answer.

Hospitality revenue management is a crucial element for any hotel to scale and stay competitive for years to come. It uses demand-based variable pricing that empowers your hotel to make better revenue throughout the year.

If you have not yet leveraged the power of revenue management, it is high time to do so.

We have been doubling down a lot on it from the very get-go. You check out our repository of revenue management to learn more.

9. Incorporate contactless solutions

There’s a huge misconception that contactless hospitality solutions came into the frame only because of Covid. It’s not true at all.

We at eZee have been offering contactless solutions way before the pandemic hit. But why would we do that? Because eZee could see that there was a huge segment of travelers that wanted hotels with contactless services.  

Basically, travelers wanted more power — they wanted to select their rooms, check-in without waiting in a queue, make payments through their phones and check out as easily as possible.

Now, the question is whether this is going to be there a few years down the line.

And the answer is an absolute yes because travelers’ preferences have changed through the years and people are going to be game for hotels with contactless solutions.

10. Leverage Open API

Open API (application programming interface) is a publicly available software intermediary that lets two applications connect for a specified task. You can also say that it is a middleman that helps two applications communicate and function in sync.

But why do hotels need to leverage open API?

Let me help you understand this with an example:

Hotel Rooftop Velar has recently deployed a hotel PMS. Impressed by the capabilities of the system, the hotel has decided to opt for a hotel booking engine integration. Now, this is where open API comes into the picture.  The hotel booking API that is used to integrate the booking engine with the PMS makes it possible for the hotel to update room inventory automatically every time it receives a reservation through the booking engine.

So, what happened here is the hotel made all its systems work in sync and what open API has done is it bypassed the tedious and lengthy process of integrating all the systems.

Want to know more in detail?

Here’s a blog for you: Everything About Open API in Hotel Industry.

11. Rely on DATA. Please do

The hospitality industry is data-rich and the key to maintaining a competitive advantage has come down to ‘how hotels gather, manage, and analyze this data.

But is data really that important? ABSOLUTELY YES!

Data gives you the ability to predict what the industry is going to witness in the years to come. It makes you and your hotel prepare for it to boost profitability.

Let’s take the example of future demand data.

Future demand data gives you insights into your source market to see how demand develops. Meaning, it enables you to predict how many guests will stay in each room during a given period.

When you have such kind of information at hand, you become better at strategic planning to future-proof your hotel, keeping your hotel business as competitive as possible.

The post The Ultimate Guide to Future-Proofing Your Hotel appeared first on eZee Absolute.

Yes, that’s what I am talking about (AGAIN) in this blog. But why am I emphasising (I would rather say re-emphasising) on it? 

It’s because hotels are still not taking this strategy seriously. They are either operating in denial or under the influence of some myths.

That shouldn’t be the case, at all.

Revenue management is a blessing in disguise. And with this blog, I am going to put the accent on the importance of hotel revenue management.

Revenue Management for Hotels is REAL

The best way I can explain the importance of revenue management in the hotel industry is by giving you a scenario.

Imagine a hotel without any sort of revenue management strategy. It has set prices for all its rooms that remains the same throughout the year; even during the times when the demand is high.

Is it likely to make any significant profit? I really don’t think so.

Now many of you (especially the ones who aren’t pro-revenue management) might say that hotels would still make good money and sustain without such strategies in place.

Yes, that’s true (to some extent). 

But when it comes to the broader picture, it is much more than just sustaining.

The hospitality industry is highly competitive and is ever-evolving. And to stay ahead of the curve, accommodation providers need to hit the jackpot. Meaning, they MUST boost their overall revenue so that they can scale.

This is how the scenario looks like with revenue management

For instance, a hotel is well aware of all the nuts and bolts of revenue management.

From customer segmentation, demand forecasting, inventory management, to applying dynamic pricing, the hotel never leaves a stone unturned.

When the demand is high in the region, the hotel owner knows what sort of pricing to keep, how to create packages, what should be the ideal cancellation policy and more.

As a result, the hotel has rarely seen any sort of downfall.

If this doesn’t convince you that revenue management for hotels is real, then I don’t know what would?

Why are Hotels Still Shying Away from it?

Demand-based variable pricing is at the core of hospitality revenue management. And this is where hotels get into the dilemma of whether to implement it.

Also known as dynamic pricing, this strategy is based on not just consumer demands, but also on competitor pricing, seasonality, current occupancy, and other factors.

Many hotel managers believe that this way of pricing hotel rooms is unfair and might even alienate guests by affecting their experience.

THIS IS NOT TRUE.

Hotel revenue management doesn’t decrease guest satisfaction. Rather, it is more about a win-win for both guests and hotels.

That’s not all. Various other myths are swirling around that are making hotels sceptical about it.

In one of our blogs, we have debunked some common myths about revenue management systems and managers. Do give it a read.

Read: Common Myths About Hotel Revenue Management

The Articles You MUST Read About Hotel Revenue Management 

No matter how much I emphasise revenue management, it is never enough. During all these years in the hospitality industry, I have witnessed first-hand how properties reaped the benefits of hotel revenue management.

Not just that. I have also researched and written about a lot of articles on this aspect in-depth.

And here are some of the articles on revenue management I want you to go through.

Do hotels need a revenue management system?

A revenue management system is used to optimize hotel room pricing and inventory. To do that, the software analyses various types of data such as internal data, market supply, and customer demand.

Now, hotels that solely rely on revenue managers think that they don’t need any sort of software.

However, that shouldn’t be the case.

A revenue management system is more like a companion to revenue managers. It simplifies their tasks and enables them to reach their higher potential. Thereby, boosting the hotel’s revenue.

Click the button below to learn about the advantages of having a revenue management system at your property. The points information in this article is legitimate.

The dos and don’ts of revenue management

Revenue management, no doubt, is one of the most prominent aspects of a hotel. However, it’s a tricky task to get it right. 

It is not just about survival; it is much more than that. Hoteliers need to consider going beyond the basics of this phenomenal revenue-boosting strategy.

So, how to do revenue management for hotels?  Is there a way to hit the jackpot? 

That’s exactly what the following blog discusses — all the strategies of revenue management to improve your overall bottom line.

Get it in-house or outsource it?

There’s a huge dilemma among hoteliers; they aren’t sure whether to go with an in-house team of revenue managers and systems or opt for outsourcing.

Both in-house and outsourced revenue management have their own set of pros and cons. Further, it depends on the hotel what suits them best.

However, as a hospitality blogger, I have done my research. I found that the hotel industry is dynamic; technologies, strategies, services, everything keeps evolving. And, revenue management is no exception!

For hotels to keep up with the industry and take advantage, they need to stay abreast with all the latest trends. And in that case, outsourced revenue management wins the race.

To learn why is it so, click the button below.

How to hire the right revenue management service provider?

For instance, you have decided to work with a revenue management service provider. But, how are you going to determine whether it’s worth your money and time?

Knowledge of all the parameters to assess service providers gives you an upper hand. However, it’s understandable that not every hotel owner would have the know-how of revenue management. If you’re also one of them then, we have got something for you.

In our article on picking the best revenue management service provider, we have covered almost every single element of this process. You can even use it as a step-by-step guide.

If you follow all the mentioned steps, and more, then Congratulations!!! You’re this close to hiring the right revenue management service provider for your hotel.

Hotel revenue management strategies for 2022

While I have listed all the prominent articles to show the importance of hotel revenue management, I have kept this for the last.

The hotel industry has witnessed all the peaks and valleys in the last two years. It has become certain for them that “the effective strategy of yesterday is no longer relevant today.” Meaning, it is time to hunt for the latest tactics.

Here are all hotel revenue management strategies that are going to benefit your property in 2022. Try them out and witness the impact for yourself.

Revenue Management is the Need of the Hour for Hotels

Last year was pretty good for the hotel industry. Restrictions were lifted, people were travelling, hotels were getting booked and whatnot. It seemed that things are getting back to normal, all over again.

But, we only see one side of the story. While many hotels were reaping the benefits, many were still struggling to revive.

I have been in constant touch with hoteliers from various countries and segments. And one of the common reasons was a broken strategy; a strategy where they failed to price their rooms the right way; a strategy that didn’t focus on guest segments and preferences.

Let me get this straight.

The covid-19 pandemic has changed the way people travel; the needs and wants of guests have transformed drastically in the last two years. Moreover, it is likely to remain the same for the coming years as well.

This is where revenue management comes into the picture.

With the help of data, revenue management practices enable hoteliers to find solutions to what may seem like complicated problems. And this is what differentiate profitable hotels from the ones that don’t leverage revenue management.  

Now, if you say,

“Harsh, I understand that my hotel isn’t making the profit it deserves. But that doesn’t mean I will raise the room prices. It might upset our guests.”

This is what most hoteliers think of when someone tells them about strategies to boost revenue. They feel it actually alienates their guests and drop their sales.

Again, that’s not legit.

The thing is, revenue management is not about raising prices at any time. Rather, it is based on the grounds that say if a hotel is recognised as quality, then it has all the rights to price its room higher.

Talking about the guest satisfaction aspect, people will definitely pay the price you set for your rooms if you deliver value. Period.

The post Hotel Revenue Management: No Luxury. It’s Need of the Hour! appeared first on eZee Absolute.

At present, revenue management systems are gaining a lot of traction. And why not? After all, there are a bunch of hotel revenue management software benefits.   

And in this article, I am going to talk about some of those aspects that make revenue management systems a great deal for hoteliers.

What is a Revenue Management System?

A hotel revenue management system is used to analyse various data such as internal data, market supply, and customer demand to optimize pricing and inventory. Simply put, it helps hoteliers in calculating the ideal rates for rooms and maximising the bottom line.

With time, revenue management systems have evolved tremendously. And amid all of it, artificial intelligence has made a major impact by automating most of the mundane tasks.

AI-powered revenue management systems now enable hoteliers to maximise revenue by selling rooms to the right guest, at the right time, at the right price and through the right distribution channel.

Benefits of Revenue Management Software

The revenue management segment in the hotel industry is quite vast. There are revenue managers, revenue management services, automated systems, and whatnot.

However, there are various misconceptions around. A significant number of hoteliers aren’t aware of the hotel revenue management software benefits.

For example, many hotels stick to revenue managers and never turn to an automated system. Which shouldn’t be the case.

A revenue management system should definitely be there in your hotel’s infrastructure. If you’re unsure, here are some of the top benefits of incorporating a revenue management tool.

1. Easily integrates with a property management system

One of the biggest benefits of using revenue management software is that it integrates with the property management systems (if not all, then at least almost all of them).

Now if you’re wondering how it is beneficial, let me explain.

Revenue management systems work on data. But, where this data is going to come from? You can either feed it manually (which I am sure nobody would like to do) or source it directly from your PMS.

This is when the real job of an RMS starts. And this brings me to the next point.

2. Let’s you analyse better and get an accurate matrix

A revenue management system gathers historical information on hotel rooms, rates, and revenue when integrated with a PMS.

Not just that, an RMS gathers all the required information when you get a new reservation.

Next up, the RMS analyses all the data and returns an accurate matrix of pricing recommendations based on the market and room type.

Furthermore, you also get a crystal clear view of all changes you need to make not only in terms of pricing but also target market and various other aspects.

No doubt, an RMS does all of it automatically; however, you can still choose to intervene and make changes to your hotel pricing. Just make sure, your analysis is apt and is in line with the hotel’s revenue forecasts.

3. Saves a lot of time

Automation is one of the prime hotel revenue management software benefits.

And without an inch of doubt, it saves time. End of story.

The amount of data that a hotel generates and is already there in the industry is immense. And for a human to analyse all of them and to make sense out of it, would take a LOT of time. Which doesn’t make any point.

Not just that, there are various other mundane tasks that actually don’t require any human involvement. But if you’re still engaged with them, then it’s pretty much a waste of time.

However, on the other hand, revenue management systems significantly cut down on the amount of time humans spend gathering data. Because of automation, everything is on hand ALWAYS.

4. Goes lighter on your wallet

Another benefit of adopting hotel revenue management software is that they are much more reasonable compared to hiring extra revenue managers (meaning, more manpower).

There are service providers that offer revenue management systems with amazing packages. And it is certainly worth it.

You can get all the tasks done on time without burning a hole in your pockets.

You can also refer to our hotel revenue management eBook for more clarity.

5. Provides revenue estimation

Automation, time and cost-saving, data gathering, etc. are just a few advantages of having a revenue management system. But did you know that it also provides hotels with revenue estimation?

Based on your pricing strategy, revenue management also helps you calculate the profit your hotel business is likely to make. Which in turn enables you to try out different strategies and estimate your profit margin.

6. Helps in market segmentation

Market segmentation in the hotel industry is grouping different types of guests and narrowing them down to better fulfil the needs and wants.

With a segmented market, hotels can tailor personalised marketing campaigns and thereby, attract more guests.

A hotel revenue management software also helps in this aspect. It collects a lot of guest data which is then used to segment and create guest personas.

7. Provides rate recommendations

Revenue management systems nowadays are equipped with technologies like artificial intelligence. Meaning, they use sophisticated algorithms to perform certain tasks.

Now, when a hotel revenue management software is fed with data such as past performance and current market data, the algorithms running in the background quickly and accurately recommend ideal room rates.

This is indeed one of the major advantages of revenue management systems.

If the same thing was to be done by a human, it would take a lot of time.

8. Does compset analysis

Most of the hoteliers think that every hotel next door is a competitor. However, that’s not the case.

It is important for hotels to know who their competitors are.

A hotel revenue management software helps hoteliers with just that. It not only lets you understand your competitors but also evaluate their services and products to strategize business growth.

Compset analysis is crucial in the hotel industry and with a robust system, the process of keeping an eye on your rivals gets easier.

9. Forecasts demand

Hotel demand forecasting is about predicting future demand over a defined period. It could be in terms of operation, finance or even revenue.  

With a revenue management system, you can manage all the aspects of revenue which is vital for hotels to stay profitable.

RMS already gets access to past and current data, therefore, it gets easier for the system to predict when consumer demand rises and falls. And this forecasting is supremely helpful when you are setting effective room rates to maximise your profit.

FAQs

The post Top 9 Benefits of Using Revenue Management Software at Your Hotel appeared first on eZee Absolute.

In the evening, while strolling down the street, I noticed something that only hospitality enthusiasts would do. Compared to the hotel I was staying at, the other hotels were a little crowded and it seemed that they were making a good profit.

That’s when my curious blogging soul asked me to cancel my flight and check into another hotel after this stay. But, why would I do that?

Because I AM RICH!! Just kidding. Though I hope I was.

I wanted to see what’s the difference between them. So, I did exactly that. And trust me on this, the differences are significant. Even the tiniest hotel management strategy was bringing in a good amount of guests and revenue.

In this blog, I am penning down all the things I witnessed in both the hotels and also, what other factors are involved. Hoteliers like you can take a cue from this and improve your business.

Understanding the Landscape of Same Category Hotels in Same Location

There are various types of hotels and it is pretty common in the industry that hotels of a certain category are often established in the same vicinity.

But why is it so? Why would someone try to enter an arena where there’s already so much competition?

The reason is, certain places attract a certain type of travellers and to satisfy their needs, hotels opt for a concept.

Let me explain.

Kaziranga in Assam, India is not only popular for the world-renowned greater one-horned rhinos, but it also attracts people to experience nature. If we talk about the trends, hotels and resorts in Kaziranga offer a bundle of activities — jeep safari, elephant safari, camping, trekking, riverside activities etc.

I am from Assam, and I have seen the hotel landscape in this national park region upfront. Take it from me, despite the increasing competition, many new hospitality businesses are opening up with the same offerings. Because why not? The number of people travelling to Kaziranga is also increasing.

Why Some Hotels Fail While Some Make Hit Good Profit

Let’s address the elephant in the room. Here in this section, I will try to put down all the factors affecting a hotel’s bottom line and what makes a hotel get a competitive edge over its competitor in the same category and location.  

The marketing game

When you’re running a hotel, marketing should be one of your first and foremost strategies. Hands down!

During my stay at both the hotels, I did my part of the research. Be it their Facebook page, Instagram page, pamphlets, billboards and everything in between, I checked out all of it; just to get a glimpse of how their marketing game is.

From that, what I understood was having a huge follower base doesn’t mean you’re a popular brand. And that’s exactly what the second hotel was into.

They had a great number of followers on all their social channels but had major flaws.

• They didn’t define a target audience for their hotel. Meaning, their followers were just engaging with their posts/content but not buying any stay.
• The content wasn’t in line with the hotel’s end goal. It was good enough to make people hit that like and follow button; but again, it wasn’t selling anything.
• They were not betting big on traditional marketing strategies either. (I really don’t know why people underestimate traditional marketing these days.)

Now, talking about the first hotel I stayed at, their marketing game was on point. And the reason I booked that hotel explains it.

The hotel was mostly targeting people who would prefer to stay near the airport. So, when I missed my flight and was confused about my next move, I saw these pamphlets of the hotel at a cafe. That’s when I booked.

Not to mention, on my way to the hotel, I could also see a billboard of the hotel.

Do you see the difference? It’s all about the right hotel management strategy if you want to compete with hotels in the same location and other competitors.

Revenue management and pricing

Another significant difference that made one hotel count good bucks and other hope for it was their pricing and revenue management strategy.

This I am saying because I did have a conversation with the managers of both the hotels.

Before checking out from the first hotel, I talked to the manager and asked him certain things about their pricing strategy. He said that their pricing aspect is being handled by a revenue management services company. They use intelligent pricing strategies after a good amount of analysis.

When asked whether he’s witnessed any change, he said and I quote:

“To be honest, I never thought that such a good rise in revenue was possible. Without an inch of doubt, the changes are great. I do accept that initially, it took a little time to take off. But once we hit our revenue goal, there’s been no looking back.”

Now, it’s not that the other hotel wasn’t using revenue management, but there was still amiss. The revenue manager was doing a good job, but then there were limitations. Maybe he had limited data to run analysis on or was running short on manpower.

(Also, I am assuming, the final call regarding pricing was always from the hotel manager. I could sense it. Basically, the in-house revenue expert wasn’t getting the right atmosphere to work on.)

Bottom line? Outsourced revenue management was working much better than the in-house one.

Hotel management strategies and technology

To run a successful hotel business, you need to have top class hotel management skills. I am not talking about the ones you learn from traditional hospitality courses. Rather, the ones you learn from experience and from out-of-the-box thinking.

Now, management strategies aren’t limited to managing hotel front desk operations. It should rather focus on each and every aspect of a hotel.

While both the properties were fabulous in managing their hotel operations, the first one had an upper hand.

I will tell you why.

Both the properties had amazing managers and a fantastic hotel management system. But the first property had contactless hospitality. And I kid you not, despite little to no human interaction, I had a fabulous experience staying there.

I was able to choose my room, check into it, order food, avail other services, and check out without having to visit the frontdesk. Almost everything was touchless.

The hotel could achieve this level of seamlessness because of the right technology. Also, the manager told me they were sure from the beginning that integrated solutions for hotels like a touchless system is going to be a game-changer.

“We know our target audience or the guest who would stay with us. They are mostly corporates, just like you and always prefer safety over anything else; meaning, a top-class contactless hotel experience. And this is exactly what we offer at our property.”

– said the manager of the first hotel.

Moreover, the second hotel was also showing interest in integrated solutions like contactless technology. I am sure, they are soon going to have it on board in their property.

Amenities and facilities

Both the hotels where I stayed had all the required facilities and amenities. Then why am I putting this here?  So that I could help you all understand its importance.

You can take my example again. The manager of the first hotel near the airport said that their target audience is mostly corporates. Meaning, the amenities they need to have should be in line with the guests’ preferences.

So, what do corporate guests prefer? Good internet connection, a comfortable room, POS services like spa, conference hall, workspace etc.  If your hotel has all of it and more, then you’re absolutely ready to host guests from the corporate world.

Further, you have to run some sort of compset analysis where you could determine what all amenities and facilities your competitor has got. It is supremely important to know this because this will help you enhance the guest experience at your property.

Credibility

Building credibility is one of the top strategies to improve a hotel’s bottom line.

However, credibility is not a service to buy or something that you can achieve in a day.  If you want to be trusted, your hotel needs to speak for itself. And how can you make that happen? By providing a great experience to every single guest and making them drop some good reviews.

Now, when I say experience, I mean personalised experience. Because personalisation is something that connects your hotel with the guests.

And true personalisation lies in understanding the journey of your customers. Once you know their needs you can offer the right services at the right time.

Furthermore, there are a few more things to keep in mind when you want to be credible — your hotel website, social media pages, OTA presence, booking process, so and so forth.  

The post Why Do Two Hotels in the Same Category and Location Have Different Bottom Lines? appeared first on eZee Absolute.

Those who have already incorporated revenue management for their hotels are reaping tremendous benefits. But the ones who didn’t and want to bet on it now seem to be in a dilemma.

Revenue management is great. But what should I go with — in-house or outsourced?

This is by a long chalk one of the biggest questions that hoteliers have when it comes to revenue management.

So, what’s the answer? What should hotels go with? This is exactly what I am going to discuss in this piece of article. I will try to provide you with crystal clear information and help you do away with the dilemma of in-house vs outsourced hotel revenue management.

What is Revenue Management in Hotels?

Revenue management in hotels is a way of understanding and analysing guest behaviour and booking patterns in order to price hotel rooms to boost revenue growth.

It involves tactics such as optimizing a hotel’s presence on OTAs, opening new booking streams and applying dynamic pricing strategies. All of it to sell the hotel’s inventory to the right guest, at the right price, through the right channel and at the right time.

P.S. – I am sure; you must have read this in my previous blogs as well. However, it’s a good practice to have a gentle glance at the concept before we move ahead.

What is In-House and Outsourced Hotel Revenue Management?

In-house revenue management is exactly what it sounds like. Hotels hire revenue managers to curate strategies to enhance the revenue of that sole property.

On the other hand, outsourced revenue managers are certified experts that work remotely for your hotel’s revenue growth.

Now, you must be wondering, “both do the same thing. I don’t see any significant difference.” But that’s not the case at all, and that’s the reason this blog has been written.

So, if you have been in a dilemma for quite some time now, this blog is for you.

In-House vs Outsourced Hotel Revenue Management

In-house and outsourced revenue management have one prime goal— of course, to boost revenue. But the approach, the load on your wallet, time and a lot of other things differ — they have their own set of pros and cons.

In this section, I will be shedding light on various such aspects of in-house vs outsourced hotel revenue management. And what makes them different to a great length.

Cost

Cost is one of the first and foremost things to keep in mind when you’re planning to incorporate revenue management at your hotel.

Meaning, you have to compare what would cost you more or whether you’ll be getting the desired ROI.

So, if you compare in-house hotel revenue managers with outsourced, the latter one has a bit more advantage. I’ll tell you why.

The average salary of an in-house revenue manager varies based on their expertise and experience in the field. 

Now, when you outsource a revenue manager or revenue management service, there is a fixed cost irrespective of their expertise and experience. Simply put, the revenue manager working for you could have more experience than an in-house expert or vice versa.

However, according to some resources, outsourcing is affordable and costs 75-80% less than hiring in-house revenue personnel.

Word to the wise: In-house revenue managers are little on the expensive side but that doesn’t mean it’s a red flag. They are good at what they do. It’s just that if you want to save some extra pennies and get results at the same time, then outsourcing should be your call.

Expertise and exposure

Talking about expertise, in-house revenue management experts work for a sole property (the one that hired them).

But on the other hand, a remote or outsourced hotel revenue manager works with multiple properties from various regions. Meaning, s/he has more exposure to working on various problems, which in turn helps them come up with effective strategies.

This is, indeed, a BIG advantage for such revenue management professionals which also benefits hotels.

Availability

I think availability matters a lot. And it sort of depends on the hotel’s requirements. 

So, if the revenue management department at your hotel only needs to work on a fixed timing then in-house could be your choice. Because in-house professionals work within a fixed shift in a property. It could be 9-5 or any other shift and they get paid for those working hours.

But if you’re a hyperactive hotelier who even tweaks pricing at odd hours or who needs assistant even after regular work hours, the outsourced revenue management services win the race here. Because most of the service providers give you 24*7 on chat, mail, and call availability. They are always there to assist you.

Therefore. If you happen to choose the best revenue management service, ensure that you do your research on the requirement as well as the service providers.

Data

The most prominent thing a revenue manager needs in order to make informed decisions about hotel pricing is DATA.

Both in-house and outsourced hotel revenue management professionals will have access to data. But, then again, there’s a catch.

When it comes to in-house experts, the amount of data they get to work with is limited. Not to mention, it also depends on the hotel and its strategies to gather data.

But when it comes to outsourced revenue managers then have access to a tremendous amount of data. Working with various properties allow them to gather different types of data that could be used for any sort of pricing strategy.

Also, this gives them a competitive edge in the industry. 

Efficiency

When we talk about efficiency, in-house experts can be efficient to an extent. The logic behind this is one person has a certain threshold limit. S/he cannot work more than that; also, they might not want to, considering they get paid for only 8 to 9 hours.

But when you opt for revenue management from a service provider, you are actually buying a service. You’re just paying for the service and the desired result, anything in between is their part.

Meaning, the service could use more than one revenue manager for your hotel.

Do you see the difference?

The service providers job is to deliver you the best results. And for that, it will make sure that things run efficiently.

This is certainly a major advantage over in-house revenue managers.

Strategy

A strong strategy is what hotels need to improve their bottom line. And to come up with one, you need a lot of insights.

But again, the strategy that in-house hotel revenue managers use is mostly different from the outsourced ones. 

To curate tactics, it requires insights. While in-house hotel revenue managers are limited to insight related to that sole property, outsourced revenue management services are a little ahead in this as they are in constant contact with OTA managers and different hotels with different problems. 

This helps them gain extra awareness of various scenarios.

For example, if you want a run promotion, you need to understand what sort of promotions are going to deliver greater results. OTAs are always on point when it comes to this, and when you work with them, you get to know the special promotions they are running. These promotions then are applied to your property to earn bookings.

Guest Experience

Even though in-house revenue managers have their set of advantages, outsourcing revenue management services are second to none when it comes to the guest experience.

Now you must be wondering how a remote expert can offer a better guest experience.

Well, this is how it works.

When you opt for a revenue management service, you as a hotelier allow yourself to have enough free time at the hotel. You don’t have to constantly be in touch with your revenue manager; rather streamline processes, save man-hours, and reduce cost.

You can now focus on maximizing staff productivity. And in turn, allow them to utilize their talents to improve the guest experience.

Simply put, you focus on your staff and provide a better experience to the guests, while the revenue manager works on boosting your revenue.

The post In-house vs Outsourced Hotel Revenue Management: Which is Best? appeared first on eZee Absolute.

Over the years, we have seen the impact of various technologies in hotels; however, there’s one tech that hasn’t been talked about much so far – hotel revenue management system (RMS). 

In this blog, I’ll give you various reasons to invest in a hotel revenue management software and challenges it can help you overcome.

What is a Revenue Management System?

As a hotelier, you might be aware that revenue management is an integral part of hotel operations. However, with time, this task has become complex due to numerous OTAs and the rising competition.

This is where the hotel revenue management software comes into picture. It’s an automated system that can forecast, update, and enhance your overall revenue, by considering various aspects. 

This kind of software is a MUST for every hotel.

Challenges That RMS Can Solve

Handling revenue in business is certainly easier said than done. It comes with its own set of hurdles that can be solved using hotel revenue management software. Here are some of them.

1. Challenge: Data Collection and Storage.

You might have heard that, ‘Data is the new oil’.

Having a huge amount of data that could benefit you in the long run is definitely an intangible asset. As for the hotels, they need to maintain yearly sales reports for demand forecasting and revenue projection. 

Collecting and storing such data is prone to discrepancies. Even if a single report is misplaced, it can create a blunder. 

Solution: Get a cloud-based RMS with unlimited storage

Hotel revenue management software are cloud-based solutions that provide unlimited storage capacity along with data security to prevent any sort of leaks. 

With the unlimited space, saving data becomes easy without worrying about its size. Moreover, cloud-based storage is safe as the data is encrypted, which makes it inaccessible to cybercriminals.

2. Challenge: Managing Multiple Platforms

It’s no secret that every hotel in some way or another is dependent on online platforms for bookings. These platforms include OTAs, hotel websites, and meta search engines.

However, most of the hoteliers struggle with managing rates, inventory, and offers on these platforms. Apart from these, maintaining rate parity is another hectic task.

Moreover, juggling between different dashboards is another challenge. 

Solution: Invest in RMS that supports easy integration

Well, using a revenue management system in hotels is the perfect solution to this problem. RMS these days can be easily integrated with various channel managers. 

Thus by using a hotel revenue management software, you can manage inventory as well as rates across all the online booking platforms.

3. Challenge: Annual Tariff Forecasts

Demand forecasting is crucial for hotels to make informed decisions.

However, it isn’t that easy. Hotels need to deal with piles of data and a lot of analysis. One slight error and it can cause a significant difference in forecasted figures. Doing this manually requires the use of formulas and a lot of calculations.

Moreover, a slight error in calculations can cause a tremendous difference in forecasted figures.

Solution: Opt for AI and ML powered RMS

Hotel revenue management software helps you with running forecasts by using a set of rules which can be changed with time. 

It’s kind of an algorithm which can be programmed while you deploy RMS at your property. Two kind of rules are used to achieve forecasts:

1. Static rule
2. Dynamic rule

While the former one is fixed, the latter one can be changed depending upon the location of the hotel, property size, and other criteria.

Since most of the RMS are powered by Artificial Intelligence (AI) and Machine Learning (ML), there are less chances of having an error.

4. Challenge: Market Analysis

Another major problem for many hoteliers is that a part of their time is consumed in market analysis (compset, market share, and ongoing offers across various online booking channels).

Solution: Go for a data-driven RMS

RMS is capable of conducting market analysis by leveraging data. Once you update your compset, booking channels, and hotel’s location, the system would automatically generate timely reports as per the defined algorithm.

Moreover, it’ll give you insights on your competitors and property’s performance across all the OTAs. And by using it, you can plan other strategies to improve your hotel’s performance on the online booking platforms.

5. Challenge: Monitoring and Updating Revenue Daily 

‘Daily sales recapitulation’ is one of the important reports in every hotel. It highlights hotels’ daily performances in the form of ADR (Average Daily Rate), RevPAR (Revenue Per Available Room), and ARR (Average Room Rate).

These figures are further used to update tariffs on a daily basis. Doing this manually requires dedicated timing. Moreover, if it’s a large property, this becomes way more difficult. 

Solution: Bring RMS into picture for 24*7 monitoring

At this point, RMS comes to your rescue with its unique feature to monitor your hotel’s revenue 24*7. 

Due to automation, it updates intelligent pricing on channel manager accordingly. Since you’ve already configured the details, you just need to sit back and relax.

6. Challenge: Managing Time and Money

Now that you are well versed with the benefits of the revenue management system and the problems it can solve, you might be wondering that this automation can cost a fortune.

But no, it’s exactly the opposite. Initially, when RMS was launched, it was specifically used by luxury properties having a plethora of services such as spa, gift shops, and multi-speciality restaurants.  

For budget hotels, investing in this kind of automation seemed like a futile step due to less inventory, low guest count, and seasonal operations. 

Solution: Get a customised RMS for your hotel

With time, things have changed. Hotel revenue management software these days are entirely customisable and tailored as per your requirements. 

Moreover, with an easy to use dashboard, it requires a couple of training sessions for the RMS providers to make hoteliers thorough with the working process.

After the setup is done, the hotel managers/owners just need to check the rates and inventory once or twice a day. This can help them in saving both time as well as money.

The post 6 Challenges Hotel Revenue Management Software Can Solve For You appeared first on eZee Absolute.

“It is easy Jacob. I applied different strategies than I taught you”, explained an ever-smiling Patrick.

“So you are saying all strategies you taught me before are wrong?”, asked an exasperated Jacob.

“No my friend, those strategies were very much useful; but in the pre-COVID era. In this difficult time, you need to upgrade your strategies to be able to go beyond survival. Let me share the secrets to successful revenue generation with you.”

When Jacob left the bar that evening, he knew all the hotel revenue management do’s and don’ts he needed to consider to improve his sales.

“How to go beyond survival?”, is the biggest challenge hoteliers are facing in the post-COVID era. As the number of active cases is declining globally, the governments are easing the lockdown restrictions. 

People have started moving out of their homes with masks and sanitisers. While several countries are now welcoming international tourists, inbound tourism is going to be a major revenue booster for the year 2021.

Since the times have changed, you too need to go beyond the basics of hotel revenue management and adapt to new strategies to generate profits.

In this blog, I am going to discuss all the nitty-gritty strategies of revenue management to help you improve your hotel’s bottom line.

Revenue Management Strategies to Follow 

Ever since various nations have started easing the lockdown related restrictions, hoteliers have been offering rooms at dirt-cheap rates to keep sufficient guest influx and survive. So far, it has worked fine as the travellers were essentially moving with no intent of a vacation. Now that vacationers are back, you can apply these tips for successful hotel revenue and marketing management to stay ahead of your competitors.

Cleanliness is Godliness

In 2021, a clean and sanitised environment is a direct contributor to your property’s revenue generation. A lot of hoteliers consider installing sanitisation booths as non-profiting investments. I cannot begin to tell you how wrong they are. The first thing people are looking for in 2021 is a clean and sanitized accommodation that gives a sense of safety to the booker.

Critical dates

Travellers are now planning their vacations as there is always a risk of not getting rooms on long weekends. People are seizing the opportunity and travelling to their favourite and easily accessible locations on long weekends. 

Start planning. Keep the list of your long weekends handy all the time. Monitor the demands on those days and update the rates and restrictions accordingly. 

Data analysis

“Data is the new oil.”

Clive Humby

It is no secret that data analysis is the most important aspect of revenue management in hotel industry. It helps the revenue manager design strategies for the future by observing the booking patterns. In today’s date and time, one of the most important metrics to monitor is the future booking trends. People are planning their holidays to avoid any inconvenience in the COVID era.

Dynamic pricing

Keep applying different prices on different days as per your demand. Do not keep a flat price for all days that your property is available online. When you keep prices in line with demand, there is a win-win situation for both you and the guest. You can make a surplus revenue on the days when the demand is high by upselling the rooms. A guest can be benefitted from the low prices on the days when the prices are less due to low demand.

Compset analysis

Competition analysis is the evaluation of your competitor’s services and products to strategize your business growth. It is important to choose the right competition to analyse and benchmark against. An ideal hotel compset consists of a minimum of 5 and a maximum of 10 properties that you are going to monitor closely. 

It is important to define a compset as dynamic pricing depends highly on the competition. You can use THIS guide to choose your competitors and perform an analysis.

Wide distribution network

It is time to go all out. Reach out to all your existing OTA partners. Check the offers and promotional programs that can benefit you and enrol on them. Look for new OTAs that have joined the bandwagon recently and partner with them. Reach out to the corporates if you can cater to their banqueting requirements. Wedding season is coming back; make the most of it. 

Mistakes to Avoid in Revenue Management

While the above steps will help you improve. I have listed several mistakes in hotel revenue management which you should avoid at any cost if you do not want to lose on revenue opportunities.

Wrong matrices

The analysis is important to create and apply rate strategies. But, if you are analysing wrong/unimportant matrices you will not be able to get accurate results. Focus on key matrices like occupancy, booking pace, ADR, revenue generated, targets etc.

Suboptimal forecasting

This means not forecasting regularly; or forecasting with inaccurate or inadequate data. Forecasting helps you formulate pricing strategies and necessary actions to correct any pricing mistakes. In the absence of a forecast, you won’t be able to determine if the selling price is at par with the market. Similarly, an inaccurate forecast will lead you to sell your inventory at a suboptimal rate.

Yes, in 2021 it can be a challenging task. But there are experts available that can take care of these aspects for you.

Over-analysis

Certain revenue managers forget that generating revenue is their core job. They get busy analysing every possible number that is generated by the system. Also, they want to cover all grounds before setting the pricing rules. However, they forget the most important one; the implementation of tactics.

Paralysis by analysis causes prevention of business optimisation. The system produces 100s of reports. Learn to use reports that are useful and ignore garbage value reports.

Outdated technology

If you still use time-consuming technology with limited functionality in 2021, you need to immediately upgrade. Use a hotel PMS that provides time-saving features like contactless check-in. Check if your booking engine is in line with Google’s free hotel booking link program that helps you generate direct bookings and save on OTA commissions.

Frequently changing technology

Data from the past helps you to understand the patterns of guest bookings. It also goes a long way in maintaining the guest database and thus, your relationship with them. Changing your PMS every season just to get new software at a better cost is one of the serious hotel revenue management mistakes. While you may feel happy about saving some money, in reality, you are at a big loss.

Changing software comes with a cost of customer information which might not get migrated to the new system. This means that if your regular guest turns up at the property and new front office staff is welcoming them, they will not extend the agreed rate to the client making them unhappy. Stick to using a robust technology that keeps your data safe and does not cost a hefty fee.

Misleading content

“I was totally angry at the hotel for providing me with complete information at the time of booking. I could not even pick a fight to get a free upgrade”. 

said no guest ever

I have been an advocate of updating the right information across online platforms ever since the evolution of these platforms. When a person makes bookings via a website or an app, the human to human interaction is zero. It is therefore essential to review and update current and correct information about your property periodically.

In case you have restricted the use of certain facilities like the gym or the spa due to any reason, be sure to mention it on your online profile. That facility might be the sole reason for a guest to book your place.

Updating correct content also helps you showcase value for the guests in terms of the offerings as they would know what they are paying for before making the booking.

Ignoring guest feedback

At times I come across hoteliers who focus more on competitor’s pricing and less on guest feedback. Their focus is getting a better price than compset regardless of the guest review score of their property. My analysis says that just a 2% improvement in reputation contributes to a 14% rise in revenue.

Retaining an existing guest is as important as acquiring new business. Hence, once should never ignore any feedback from the guest. A happy and satisfied guest will not only return, but they will also recommend you to others, working as your brand ambassadors. 

This is without a doubt of the important aspects of effective hotel revenue management strategy. 

Being rigid about rates

“It is raining in December. It must be monsoon because my books said so.”

Customer retention is always more important than pricing rules. Many a time, hoteliers are hell-bent on things like weekday pricing or weekend pricing and won’t budge despite having empty rooms. This leads to an unhappy guest, a loss of opportunity and potential loss of future business.

But when you listen to your guests, things turn out to be better. Concentrate on their complaints and suggestions and make positive changes around them. 

Fearing OTAs

Over the years, there has been a perceived negative image of OTAs. Now, I am not saying, everything said about the OTAs is incorrect. I am saying that you can work with them instead of fighting or fearing them. 

Globally, 70% of bookings come from online sources today. OTAs give you a platform to be visible to a higher number of people for 15% to 18% commission. Instead of blocking inventory online on high peak dates, speak to them and try to work on an alternative commission module.

The post How to Do Hotel Revenue Management the Right Way? appeared first on eZee Absolute.