This is How You Can Increase Revenue for Small Hotels [Bonus Tip Inside]

Like any other business, hotels need to generate revenue in order to survive.

But with the ever-growing competition, how can small hotels keep up? How can small accommodation providers keep revenue flowing?

In this article, I will discuss some sales and marketing strategies to increase revenue for small hotels and stay afloat.

Wait, there’s also a bonus. I will also tell you about some revenue-generating ideas for small hotels that don’t include selling rooms.

Sounds good?

So without further ado, let’s find out how to increase revenue in small hotels and help them thrive!

How to Maximize Revenue for Small Hotels?

There are various ways of generating revenue in the hospitality industry.

However, as a good practice, hotels need to first analyze their current business strategies and determine the scope of implementation of new methods.

Following are some of the fail-safe tactics that accommodation businesses can use to improve the revenue flow. And also, as promised, there are some non-room revenue generation sources as well.

Check each of them out and see how you can make the best out of them.

1. Hotel sales strategies to increase occupancy and revenue

1.1 Pricing strategy

Pricing is at the core of a hotel’s overall revenue strategy. If you get this right, you’ll get most things right. 

Here are some of the tactics you might want to try at your hotel:

• Price a little higher than your competitor but offer more extras and add-ons.
• Offer discounts if you often go low on occupancy. However, you might then want to try to generate revenue from other services.
• Try pricing your room based on the cost of running your hotel rather than external factors such as competition.
• Change your pricing depending on demand during specific times of the year.

Note: Before implementing any pricing strategy, run a thorough analysis of your hotel’s current state. And based on the outcome, decide what works the best for you.

1.2 Group sales strategy

Group bookings play an important role to increase revenue for small hotels apart from individual bookings. However, despite the ability to bring in a huge amount of income, group bookings are being overlooked by hotels the majority of the time. That shouldn’t be the case.

Hotels, especially the small ones, should invest a good amount of time figuring out strategies on how to get more group bookings.

The strategies might differ a bit compared to chain hotels, but most of the concept remains the same.

At eZee, we have a dedicated blog on ways to increase group bookings at your hotel, do give it a read if you want to learn the nitty-gritty.

1.3 Destination marketing

Destination marketing is most probably one of the fail-safe methods for small hotels to attract travelers and boost revenue.

For example, Mahabalipuram in Chennai is filled with small hotels and resorts. One thing that is common among all the properties is that they all market the location. And this practice of destination marketing has not only made Mahabalipuram a great attraction for tourists worldwide but has also helped all the hotels generate decent revenue.  

Now, it might seem intriguing and you might want to start right away. But you need to have a strategic approach to this. Try learning about the location in detail, determine the type of tourists who would like to visit there, and look at various other factors.

Once you’re off to good analysis, you can run marketing campaigns for the destination and link your hotel to it.

1.4 Direct booking

Another way to attract more travelers to your small hotel is by offering incentives for direct bookings.

But again, having a hotel website with a booking form isn’t enough to acquire reservations. You need to optimize your website and take care of a few more things.

For example, you can offer incentives to your guests for booking directly with you. How about free lunch for two if booked directly on the hotel website?

Now, there are various other ways to boost your hotels’ direct bookings. You can read the blog mentioned below to learn more.

1.5 Partnerships with local businesses

This is most probably one of the most underrated tactics to generate revenue for your hotel. And I can see it fading from many locations because big hotels think that this conventional tactic isn’t good enough for them.

However, that doesn’t mean it has lost its magic.

Wondering how this works? Let me explain with an example.

Hotel Bell is a small property in the city of Guwahati, Assam. And being a small property it doesn’t have a significant budget for marketing. However, the owner of Hotel Bell is a smart individual. He has partnered with multiple cabs and auto rickshaws that drop and pick up people from the airport, railway station and bus stops.

Now, every time someone takes a cab, the driver always suggests Hotel Bell for them to stay and take them there. In return, what the hotel does is, whenever a guest asks for a drop or pick up, it sends one of its partner cabs.

If this isn’t a win-win, I don’t know what is.

1.6 Leveraging property management software

The importance of a property management system is equal for all hotels, irrespective of their shape and size.

And why not?

Technology has changed the entire hospitality ecosystem and hotels need to stay abreast with the latest hotel tech.

And in the process of adopting tech, a hotel PMS tops the priority list because it is the epicenter of everything related to hotel technology.

A hotel PMS streamlines and automates all the day-to-day operations at your hotel, making it more efficient and increasing guest satisfaction.

So, if you haven’t turned to a hotel PMS yet, it is time. Further, if your current system isn’t delivering any results, then it is time to change it.

We also have a complete guide for hotels to select the right hotel software, do give it a read.

2. Bonus Tips: Non-room ideas to increase revenue for small hotels

When it comes to generating revenue for small hotels, there are various ways for small hotel businesses to leverage. And some of the ideas to bring revenue are non-room sources such as incorporating various services or utilizing extra hotel spaces.

Note: I will just give you an idea of each source as there are multiple of them.

• Banquet hall: Do you have extra rooms that are a little large? Will you be able to serve dozens of people a meal in a timely fashion? If so, you can rent them out for hosting large social and business events.
• Host small events: Now, if you don’t want to rent out a banquet hall, you can simply host and scale events such as stand-up comedy, open mic, and karaoke. You can host these events dedicatedly and sell tickets or you can keep it as a special during a gala dinner.
• Co-working space: People working remotely are increasing rapidly. While some choose to work right from their couch at home, some want to go to a co-working place. Now, how about you turn some of your hotel spaces into a co-working office? Sounds like a plan?
  Read this blog to learn how to go about it: How can hotels adapt co-working culture?
• Restaurant: Food and beverage is a great way to increase revenue for small hotels. You can either start your in-house restaurant where you can let guests dine or you can also open it up for the general public. One more thing you can do is let someone else run a restaurant in your hotel and you can take monthly rent. Cloud kitchen is also a good idea if you have the know-how of this business model.
• Boutique shop: A boutique is a specialized type of retail store that fits a niche market with specialized products. Having a boutique with a more in-demand niche in a hotel is a great source of generating some extra bucks.
• Private label: Speaking of shops, you can even start your private label. Pick a niche and products and sell them with your private label. This is also a great way of brand publicity.
• Health and wellness: Spa, saloon, gym, etc. could also help you generate revenue. How about setting an hourly price for the gym? Keep it reasonable enough and people will visit.
• Pet-friendly services: If it is a pet-friendly hotel, you can establish multiple services. One of the best examples is dog walking. Let your guests hire a dog walker for a price. Or charge hourly for letting dogs in the play area. Not to mention, you can also sell pet food.
• Ride rental: Got some extra cycles on the property? If so, rent them out. People are going to love cycling around the city. You can do that for bikes and scooters as well.