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.

Not to mention, even I have been a lot more vocal about this sought-after hospitality phenomenon lately. However, there’s still more to cover.

Today, this blog is going to be all things hotel revenue management systems.

I am not just going to give you an overview, but also help you learn about the features that make it worth it, and how you, a hotelier can pick the right system from the right vendor.

The Current Scenario of Hotel Revenue Management in The Industry

Over the years the hospitality industry has witnessed multiple transformations — the rising need for competitive pricing strategies, penetration of mobile devices, changing traveler preferences, and more.

And all of it directly impacted the revenue management segment in the industry, taking it from nice-to-have to a must-have.

According to various reports, the revenue management market is expected to grow to USD 22.4 billion by 2024.

Furthermore, I have been in this industry for quite some time now and witnessed firsthand how the industry is becoming receptive to revenue management. Be it about outsourcing revenue managers or setting up in-house departments, hotels are putting in a significant amount of effort.

However, if we take a wider look, there are many properties that aren’t sure whether revenue management really makes a difference. 

Not just that. 

Many don’t even bother to focus on optimizing their revenue; either because they lack expertise and resources, or just find it overwhelming.

Prominent Features of a Hotel Revenue Management System

While the idea of revenue management could be a massive deal for hotels, revenue management software sorts everything out at ease.

It makes revenue management simple and delivers substantial results.

Wondering what exactly a revenue management system is?

A hotel revenue management software or system is a tool that automates the process of using data to determine the right price for hotel rooms and maximize the overall revenue of the hotel business.

Now, there are several hotel revenue management systems available in the market, but not all of them are worth all the tea in china. You as a hotelier must analyze every aspect of the system and then go for one.

To make it a little easier for you, the following are a few hotel revenue management system features that you need to look at while opting for one.  

1. Intuitive dashboard

The first and foremost thing to look for is how easy the system is to understand and operate. And that you can determine by looking at that dashboard.

An intuitive dashboard makes it as easy as ABC for the end-users to understand, use the system, and get a quick insight into their data, and drive revenue decisions for the properties.

Simply put, even those who possess minimal technical expertise can make the best out of the system while they are first learning to use the program.

As a cherry on top, also consider whether the dashboard allows various types of views such as list and calendar views. These types of dashboard orientation allow users to spot errors and crucial data points.

2. Multi-dimensional property analysis

The subhead sounds a little too sophisticated? Let me help you understand by breaking it down. (Modafinil Smart Drug)

One of the core aspects of revenue management is analysis — both of your property and competitors.

An ideal hotel revenue management system should be able to analyze your property’s performance on various parameters to help you identify the scope of improvements.

Furthermore, it should also be able to perform in-depth competitor analysis, comparing their rate plans, performance insights, pricing strategies, and more. Additionally, it helps you determine where your competitors are lacking and you’re ahead, and vice versa.

3. Intelligent pricing engine

If I was a revenue manager I would be able to determine what’s happening in the industry at present, how other hotels are pricing their rooms, what travelers are seeking, etc. Because I can see it first hand and make changes accordingly.

But for a machine or a system to do the same, it requires data points and the ability to make sense of that data.

This is where an intelligent pricing engine comes in.

When you’re in your research phase of finding the best revenue management software, make sure the system is able to optimize hotel pricing based on data from market behavior and its consumers.

Dynamic pricing (also known as surge pricing, demand pricing, or time-based pricing) is a great example of price intelligence. It is a strategy that accommodation businesses use to set flexible prices for their rooms based on current market demands.

In the simplest words, intelligent pricing is all about delivering what your guests expect whilst being profitable for you. 

4. Super detailed reporting

This is another vital feature you need to look out for while choosing the right revenue management system for your property.

When you invest in a system to gain meaningful revenue, you have to have a detailed view of what’s happening and reports are your friend here.

Be it about your property’s analysis, pickup report, ADR report, revenue forecast, or competitor analysis, the reports should deliver even the tiniest of the details.

If the system doesn’t offer that, then you might want to continue.

The Best Revenue Management System Out There

Which is the best hotel revenue management software for hotels? 

This is exactly what you’re thinking. Aren’t you? 

Well, there are various revenue management systems available for hotels in the market and each of them is great in its own way. 

However, being in the hospitality industry for so long, my money is on eZee Mint. 

eZee Mint is one of the smartest revenue management systems in the hotel industry at present that helps in optimizing revenue through dynamic pricing. 

The system is designed and developed by considering the vastness of revenue management. It works upon a series of criteria including weekly occupancy, seasonality, lead time, demands, and last-minute booking to calculate competitive rates for the available inventory.

Simply put, it not only offers pricing strategies but also helps you analyze your hotel’s entire revenue infrastructure and boosts the bottom line significantly.

The post Pick the Hotel Revenue Management System That Has These Features appeared first on eZee Absolute.

A hotel with the right set of revenue management strategies is in a much better place than the ones without.

But what makes revenue management so prominent?

Data, data, and data!

They said data is the new oil. Well said.

And today, in this blog, I am covering an interesting type of data that lately has become a fuel for revenue managers in improving their strategies.

Let’s look at what this data is and how it is transforming the hotel industry for the good.

What is Future Demand Data?

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

This future forecast can come from surveys, customer preferences, marketing research, or other sources.

Now, it might not seem that amazing yet just by thinking about how hotels can use future demand data.

But once you get to know more about it and learn about its use cases, you’ll understand how it is going to make a difference.

And this brings me to the next point. 

How is This Data Relevant to the Hotels?

Hotels need data to improve their services, any day. And future demand data can be an efficient fuel.

The goal of this type of data is to help hotel managers predict what guests will want from hotels in the future. And with the right set of data, they can develop goals and strategies that are tailored to meet those needs.

A hotel that leverages future demand data become better at strategic planning for years into the future, rather than just a few months out.

This is a big deal, especially in an industry that can be so reactive to what’s happening on the ground.

For example, recently there has been a shift towards more health-conscious and vegan guests who are looking for hotels with lower environmental impact, no animal cruelty, and less waste. 

So, hotel managers would benefit greatly from incorporating future demand data into their planning process to accommodate these changes while still providing top quality service to their guests.

The Bigger Deal

What makes future demand data more intriguing is how it turns revenue management into the most powerful weapon in the arsenal.

Revenue management is all about leveraging data and setting the right price for the rooms. Now, what if you could already predict your hotel’s demand (demand forecasting, for instance) and set prices accordingly? You’ll be leading the race.

And this brings us to the primary topic of the article.

How Future Demand Data Can Fuel a Hotel’s Revenue Management Efforts?

Future demand data is a goldmine for hotel businesses and their revenue management experts. After all, the benefits are so stunning.

1. Offer insights from the local market

Being a part of the hospitality industry for such a long time, I have seen hotels not betting big on the local market. Maybe they have their strategies in place, but I still believe that they must go out of their way to tap into the local market.

The opportunities and money are significant in this space. Moreover, it is one of those markets that can revive you when your business declines.

The covid pandemic must have proved this point already. 

Now, forward-looking demand data empowers your hotel with insights from the local market. And what are these insights?

You get to know what is trending and going to spike in your destination.

Maybe you have performed a compset analysis or an analysis specifically to look for future trends. And then, you found that workation is going to be the next big thing in your locality. Additionally, you also identified the price point people are willing to pay.

This is when revenue managers come into the picture and build a pricing strategy that is aligned with the preferences of your local market.

Brownie point for marketers: You can carry out geo-targeted ads and promotions for your local market to gain better traction and gather data.

2. Give a view of what your competitors are preparing for

Another ace up your sleeve is the information that you get about your competitors.

Be it revenue management or compset analysis; for a long time, future demand data wasn’t a crucial part. However, the scenario has changed in the last few years.

And why not? The right set of data, gathered from the right sources, enables you to understand what your competitors are preparing for.

But is this information useful?

For example, despite the boutique location and its high demand, one of your local competitors is turning actively towards reducing its pricing. 

But on the other hand, two more local competitors are betting a bit high on a new pricing strategy with a major change in the cancellation policy.

This part is crucial.

You have important insights from three of your local competitors now. But do you need to consider all three of them?

Absolutely, No!

Future demand data helps you with competitor information so that you can figure out what your competitors are doing right and where they are falling short.

This helps revenue managers identify white spaces where strategies can be built to maximise revenue.

3. Help you analyse your current strategies

Your hotel is operating with the best-in-class revenue management strategies in place. You also have pricing that attracts a lot of staycation enthusiasts.

But wait. What if the staycation trend fades in the coming months and some other trend takes over?

Is your hotel ready to deal with it?

Are your pricing strategies optimised enough to work in line with upcoming trends?

If the answer is a yes, then well and good. But if it’s a no, then you might need to leverage a different approach.

With the help of forward-looking data, you analyse your current tactics to determine whether they are hitting it out of the park. And later make changes accordingly if required.

4. Help you refine your revenue management tactics

Dynamic pricing is at the heart of revenue management. But it is not the only tactic.

When it comes to boosting a hotel’s overall revenue, experts use an arsenal of strategies. It could be around OTAs, direct bookings, overbooking, etc.

But what’s more important is to be sure of whatever the strategy is, it is worth all the tea in China.

When leveraging future demand data, you only get an idea of the future strategies but also how to refine your current strategies.

For example, they say overbooking is a necessary evil. But that doesn’t mean it has to be every hotel’s go-to strategy. And this is what crucial information helps you determine — whether overbooking is good for your hotel or something you can do away with.

All in All: Future Demand Data is the Need of the Hour

Humans are always looking for “what’s next?”. And this curiosity has led to gazillion business success stories.

Doesn’t matter to which industry you belong to, it is imperative to predict the future if you want to scale.

 And the same affair has occurred in the hospitality industry.

There was a time when data itself was overlooked for many years. But when hotels saw the efficacy of data in building business strategies, creating pricing models, etc. they started a rapid adoption.

Today, data has become commonplace in the world of hospitality.

A hotel without data is a bus without a driver.

Future demand data in recent years have gained tremendous traction. Hotels from all around the world are betting big on it.

The major reason is historical data, despite being crucial, is being overlooked by many hotels in the industry.

Firstly, it doesn’t offer the same that it used to in the past.

Secondly, the hospitality industry is ever-evolving; meaning, hotels need to know more about the current and the future market. And this is where forward-looking data is rocking the domain significantly.

The post How Can Future Demand Data Help in Hotel Revenue Management? appeared first on eZee Absolute.

What I am trying to say here is that there are a lot of underlying voids in a hotel’s operational aspect that goes unnoticed. And these are the ones that cause major damages.

One such void is a Broken Pricing Strategy.

No idea what is it?

Suppose you have implemented some sort of tactic in setting your room prices. But for one reason or the other, it isn’t driving any results.

You still believe that your strategies are fine and perfect. But your rooms are not getting sold, your revenue is going down, and whatnot.

And instead of fixing this, you’re focusing on other factors.

This is exactly what happens when hoteliers fail to notice pricing blunders.

So, before you come up with some “supreme” pricing strategy to win the war, first you need to find out why things aren’t working. Meaning, you must carry out an evaluation of your hotel pricing strategy.

And that’s exactly what I am going to help you with in this article.

Why Do Hotels Need a Pricing Strategy?

What’s important for a hotel to sustain and scale?

Good revenue!

And how can hotels ensure that their revenue is fine and dandy?

By selling more rooms at the right price!

However, not every hotel achieves this. Because either they don’t have the proper knowledge of setting room prices or they don’t simply care. Most of the time, it’s the former one.

If a hotel wants to make a better profit, all while ensuring guest satisfaction, they need to have a proper game plan in terms of pricing.

If I put it simply, a strong pricing strategy is a sure-shot indication towards an increase in ADR, RevPAR, overall revenue, and growth.

What if Your Strategies Aren’t Working Right?

Have you been making mistakes in your hotel pricing strategies? And you are now wondering what could be the worst-case scenario?

Let me tell you what worst can happen.

It will take a serious toll on your revenue.

Every room in a hotel has the potential to bring a good amount of money. All it takes is the right approach and utilising the best of the strategies.

For instance, there’s a concert happening in your locality. People from all around the country are flocking to witness the rock band performing. Furthermore, almost every hotel is getting sold out.

But you still have a few rooms left.

Now, how are you going to price them? Just like how you used to on a daily basis? Or would you increase the price based on demand?

I think you know the answer.

This is just an example to show you the potential of your rooms.

Now, if you think that this strategy is not doing justice to the guests, then you’re wrong. You can always up your experience based on the price you set.

Furthermore, you’re already aware of the expenses of running a hotel. It’s huge. Be business-minded and think of making a profit as well. After all, you have to sustain and scale your hotel business.

How to Identify if Your Pricing Strategies Are Broken?

There are various pricing strategies for hotels, but that doesn’t mean each of them would work. At times, some of the pricing methods turn out to be useless and impact the hotel’s revenue.

In this section, I am listing all those points that would help you determine whether your strategies are working or broken.

Read all of them and see if you have any of them in place in your hotel.

1. Not maintaining rate parity

Rate parity is the practice of maintaining consistent room rates across all the distribution channels of a hotel. Meaning, the price displayed is uniform across all the OTAs, irrespective of the commission a hotel pays to bring bookings. 

It is a prominent element of a hotel’s distribution and pricing strategy. It provides price transparency to potential guests and helps in developing brand trust.

Now, those who are against rate parity, saying it costs business; I want to tell them that there are ways to tackle it. And in one of our blogs, we have explained the A-Z of rate parity. Do give it a read because it is sure to change the way you look at rate parity.

2. Not performing market and compset analysis

Irrespective of the size and type, every hotel needs to know about the current happenings in the market and how its competitors are faring.

What I mean by this is that hotels must perform a compset analysis. That is, looking at hotels in your same area and price range, and evaluating their services against your own products.

A proper compset analysis helps you make informed decisions regarding your room prices and drive more bookings.

So, if you haven’t done any sort of competition analysis so far, then you’re certainly lagging. Because not keeping an eye on your competition is considered to be one of the major mistakes when it comes to hotel pricing strategies.

3. Setting prices that aren’t in line with various segments

One size might fit all but not one price!

The price for corporates, independent travellers, groups, etc. can never be the same. They will always differ from each other; be it in terms of volume, frequency of guests, cancellation ratio, or whatsoever.

Let me give you an example.

Hotel Royale charges $80 for a room to independent travellers. But when it receives group bookings, the price goes down a bit. Why is that the case? Because group travellers book more rooms and they often stay a bit longer.

Further, chances of upselling and cross-selling are also more for hotels.

That is why the rooms are usually sold at a lower price compared to regular bookings.  

I think you can now see where things were going wrong for so long at your hotel. Never mind, let’s check the other points and identify more broken pieces.

4. Focusing on profit and not guests’ experience

To be honest, this should go without saying. Overlooking guests’ experience is one of the mistakes in hotel pricing strategies.

But I know many hotels would not actually take it seriously, that is why I am re-emphasising it.

The first and foremost priority of a hotel is always guests. No matter what, a hotel should always take the extra mile in delivering a fantastic experience to its guests.

Now, talking about the pricing aspect, whatever you charge for a room should always feel low to a guest when they stay with you.

Meaning, your services should be so fantastic that the guests must feel they got a great deal.

I bet, when you start thinking of guest experience and not profit, any price you set, it would automatically become effective.

5. Not analysing and comparing past sales with current sales

Numerous hotels around the world don’t practice this, whatsoever. They feel it is irrelevant and requires a lot of their time.

This shouldn’t be the case, at all.

A hotel needs to analyse its performance of the last few years in terms of revenue.

When you do that, you get a clear picture of how the business has fared so far. If your sales aren’t spiking this year, then you can take a cue from past years’ strategy.

Furthermore, you as a hotelier also need to see if your revenue is meeting the forecasted sales target. If not, then learn why; what are the voids, what went wrong, etc.

6. You have no strategy in place for cancellation

You cannot let anyone take your business for granted. Period.

Cancellations are one of the major elements that impact a hotel’s bottom line in an unwanted manner. Which is why hotels need to consider having a robust cancellation policy in place when working on their pricing strategy.

A well-planned non-refundable cancellation policy can not only help you reduce the loss but also increase your revenue.

For example, you can significantly set low prices for longer stays but with a condition that there’s no refund in case of cancellation. Further, you can also have your own set of rules to maximise both guest satisfaction and your overall bottom line.

7. Not using any sort of upselling and cross-selling

A pricing strategy without upselling and cross-selling is incomplete. Period.

Didn’t get it?

Let me help you understand.

Upselling is about encouraging guests to spend more. And one of the best examples is to offer guests a room upgrade.

Talking about cross-selling, it is about additional purchases. You can offer your guests some additional services along with the room at a price.

Now, take a moment and think if you have these included in your pricing strategy. Yes? No?

8. Loyal guests need a different pricing

Loyalty needs respect. And this goes for loyal guests as well.

If a guest comes to your hotel, again and again, you must ensure that it remains the same. And one of the best ways to do that is by offering special prices to him/her.

When you do so, you drive a sense of appreciation and it results in attracting repeat reservations and earning revenue.

How Can Hotels Fix Broken Strategies?

Now that you have learned how to determine whether your pricing strategies are broken, it’s time to know how to fix them.

The best way to make things work at your hotel and increase revenue is by incorporating revenue management.

Yes, here we are again. Because it is worth it and there’s no denying it.

Be it deploying a revenue management system or opting for a revenue management service, you need to have it in your hotels.

Using hotel revenue management, you can analyse internal data, market supply, customer demand, and more to optimize pricing and inventory. It helps hoteliers in calculating the ideal rates for rooms and maximising the bottom line.

I have written various blogs that show how revenue management can transform your hotel and boost your sales.

I am linking all of them below.

• Revenue Management is the Need of the Hour
• Benefits of Using Revenue Management Software at Your Hotel
• In-house vs Outsourced Hotel Revenue Management
• Challenges Hotel Revenue Management Software Can Solve For You

Read all the blogs whenever you want and make the best decision for your hotel business. I am sure they are going to give you a whole new perspective when it comes to revenue management. 

The post Have You Ever Evaluated Your Hotel Pricing Strategy? 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.

To be honest, I never thought that the industry is so huge and there are so many aspects of it. But with time, my knowledge and experience grew and I feel it is now my responsibility to share all of it with you.

Today, in this blog, we are going to look at a very interesting topic.

Revenue management and marketing are undeniably two of the most important elements of a hotel. They can make and break a hotel.

But do you know that these two departments are closely connected?

I am not saying that revenue management wouldn’t work without marketing or vice versa. Rather, when you form an alliance with both, it works wonders.

Revenue Management in Hotels

Before we go on and talk about revenue management, let’s touch upon yield management.

It was in the late 1980s when Marriott adopted yield management. And soon, it witnessed good returns.

Seeing Marriott’s success, other hotels started experimenting with this pricing strategy too and it became a common practice.

However, with time, strategies evolved and it turned more comprehensive which is now known as revenue management.

Revenue management, today, is one of the critical aspects of a hotel. It undoubtedly acts as the backbone of a successful hotel business.

Hotels from all around the world are betting big on revenue managers and systems to optimize the revenue potential and gain greater returns.

What is the Role of Marketing in the Hotel Industry?

It’s another essential element of a hotel. However, marketing isn’t new for this industry; it has been around for a long time and has evolved significantly.

Let me take you back in time a little.

Remember, back in the past, hotels used to advertise on big roadside hoardings? The idea behind it was they would expect people passing through to look at it and come to their hotel. Not to mention, these advertisements were always placed within the distance to the hotel. And no doubt, it did work!   

Then you would also see hotel advertisements in newspapers, wall posters etc.

The marketing segment was different.

But now? Things have reached a whole new level. Hotels are putting massive bets on digital marketing. Be it Google, Facebook, Instagram, hotels are running ads on a variety of channels.

And why not? After all, it is important for hotels to be as appealing as possible if they want to drive bookings and improve revenue.

The Relationship Between Revenue Management and Marketing in Hotels

Now, let’s address the elephant in the room.

Can marketers and revenue managers work together?

The answer to this is ‘they can’ and ‘they must’.

Both revenue management and marketing departments in hotels have worked independently in the past. However, with the boom in digitisation, the requirements for both departments have increased.

Marketers and revenue managers are required to tap into various aspects to deliver exceptional results for hotels. And this can be achieved by combining the strengths of both departments.

But how can hotels do it?

A Collaborative Approach

When I say collaborative approach, I mean hotels need to understand both the departments in-depth. And lay down a blueprint of how they can work hand in hand.

Now, here comes the most interesting part of this entire scenario — what one has that the other one wants?

Confused?

Okay, let me explain this to you with an example.

Imagine you’re a content marketer who’s good at SEO and Facebook ads. However, lately, your ads aren’t getting much traction.

Similarly, there’s this other person who is an amazing writer and his blogs aren’t getting traction.  

Now, this is a perfect situation, where both the parties can form an ally and work together.

The writer can use the content marketer’s SEO knowledge to rank his blog on Google. While the content marketer can use the writer’s skills to curate attractive Ad content.

This is the same scenario for revenue management and marketing.

Collaborating revenue management and marketing can significantly improve a hotel’s bottom line. Hotels just need to maintain open and effective communications between revenue management and marketing.

How can marketers help revenue managers?

Hotel marketers require a lot of data to differentiate themselves from the competition and to carve out the best path forward for the hotel brand. And fortunately, the marketers do have hold of some prominent data points.

While there are various data points, let’s look at one point as an example.

I am sure you know how important ‘guest segmentation’ is in hotel marketing. It helps marketers in dividing a market into homogeneous segments and targeting each with a distinct message.

Now, if hotel marketers help revenue managers with guest segmentation, they’ll be able to create rates that will attract the right people to the hotel.

This is just one aspect and example. If you would want to learn more and want me to cover anything from this aspect dedicatedly, do let me know.

How can revenue managers help marketers?

Now, this also works the same way. There are various things that revenue managers have access to or work on. Marketers can use information like room pricing, compset analysis report, demand forecasting report, budget etc. to create a campaign that delivers much better results.

For instance, if marketers learn about profitable pricing, they can create custom campaigns with the pricing that drives the right set of people to book with the hotel.

The post Collaborating Revenue Management and Marketing Will Increase Your Hotel’s Revenue appeared first on eZee Absolute.