Hotel revenue management for the busy accommodation provider
Understanding hotel revenue trends
For the past five years, accommodation providers in New Zealand have been enjoying a steady rise in international visitor numbers. In fact, over just five years, these numbers have gone up almost 40 percent. A recent statement from Tourism Industry Aotearoa chief executive, Chris Roberts has warned, however, than this growth is set to flatline. For hotel business owners, it’s not necessarily cause for worry.
With awareness of some of today’s current travel and hotel revenue trends, smart operators will be able to mitigate a lot of the hit to their bottom line. Having an understanding of the desires and expectations of Millennial and Gen Z travellers, creating a more personal experience, optimising on opportunities for revenue making and focusing on what sets your business apart from platforms such as AirBnb will help you ride the downturn.
Change is a constant in an industry like tourism and hospitality. That can bring with it feelings of unease or stress. But what we know is that successful accommodation providers are the ones who don’t sit back and let market trends override their business strategy, but rather leverage them to their advantage
"We designed Preno specifically for accommodation providers like you. It combines our experience of running a successful hotel business, input from other independent hoteliers, and industry-leading technology."
Amelia Gain Preno[fa icon="quote-right"]
Increasing revenue for your hotel
Every accommodation business wants to increase its revenue, this can be particularly tough in the hospitality industry. We’re sharing our top tips on how you can easily increase revenue for your hotel, motel or villa.
Technology is changing how accommodation providers connect with their customers and while rapidly redefining customer experiences and expectations.
Like many other industries, technology is reshaping hospitality, and hotels must adapt to accommodate these changes. The good news is that evolving technology benefits both accommodation providers and customers.
Behind the scenes, tech makes running accommodation more efficient. With a cloud-based PMS solution like Preno, accommodation providers can streamline their operations, grow and manage their revenue. Using simple, yet powerful technology enables accommodation providers with smarter data-based decision making.
Managing your hotel’s revenue is one of the most important things to get right. Applying the right pricing strategy can ensure your accommodation's revenue is streamlined and easy to manage.
Put good hotel pricing strategies in place
Capitalising on good times, and better mitigating through the slow times also comes down to having good hotel pricing strategies in place. With this in mind, it’s best to be flexible, so you’re ready to adapt your pricing to align with market influences, seasonal fluxes and industry changes. Because of this, hotel price forecasting is an important strategy to get your head around.
Hotel price forecasting means evaluating demand for accommodation, and pricing your room rates accordingly. The idea is that when there is greater demand on your rooms, you charge a higher rate for each room. With this approach, you’ll also predict when times might be a little tighter. You’re also in a better position to budget and stick to a manageable financial plan throughout the year to help you manage through quieter periods when there is less demand for accommodation (and when you you need to drop your rates).
As well as hotel room pricing based on forecasting, we recommend keeping these key hotel pricing strategies in mind:
- Hotel room pricing based on room type segmentation
- Dynamic or time-based hotel room pricing
- Hotel room pricing based on customer group segmentation
Understanding hotel price forecasting
Forecasting is an important strategy to get your head around in order to set your prices based on anticipated demand. Not only that, but with an accurate forecast of expected room revenue, you’re in a better position to prepare and stick to a manageable budget throughout the year.
Essentially it means evaluating demand for accommodation, and pricing your room rates accordingly. The concept is that when you have a clear idea of when your business will be experiencing higher demand for occupancy, you’ll be able to charge higher rates for each room. This allows you to maximise revenue during peak seasons and therefore better manage the downturns.
We have more ideas on pricing strategies for hotel rooms as well as tips for increasing your hotel revenue on our blog! If you’d like to find out more about how Preno hotel management software can help, check out the features here.
Implement smart software to help you manage your revenue
To make effective use of these options, your business needs a good hotel revenue management system that allows you to easily and accurately keep track of data. Then you’re in a position to make decisions based on real insights about who your customers are, what’s influencing their travel choices, what their expectations are and how they’re spending their money in your hotel. When you understand these factors, you can create more effective strategies around getting the greatest dollar value from each guest.
Of course in a tech-saturated landscape, it can also be overwhelming trying to understand which software solution is right for your hotel. Some may be too complex for your business, others are better suited for businesses with very disparate departments, while there will be some that provide the perfect integrated solution for you to get a very clear picture of your business operations.
With the right revenue tools in place, you have a goldmine of data, that you can capitalise on, at your fingertips. This information not only gives you clarity over your business, but puts you in a better position to predict and weather volatility. For your customers, it also means a much more sophisticated and streamlined experience - one that feels far more personal to them.
Hotel market segmentation
A good hotel management system will also help give you a clearer picture of market segmentation. This involves differentiating between different types of travellers who stay at your hotel, then grouping those with similar needs or buying behaviours. Why is market segmentation critical for your hotel business? Because with a clearer idea of who your audience is, you can then create sales and pricing strategies that target a particular segment. With this approach, you’re also better positioned to cash in on opportunities at the right time.
Some ways to segment your customer base include:
- Length of stay
- Days of the week the guests stay
- Booking lead time
- Cancellation requirements
- Food and beverage requirements
- Amenities requirements
The more information you’re able to get to build a guest profile, the better - this is where your hotel management software make it easier so you can record, store and recall customer data. A good customer experience begins and ends with smart systems.
In a changing, dynamic world with ever-evolving customer expectations, inefficient operating and pricing strategies is a risk that your hotel business can’t afford to take. Getting clear on who your customers are, where the opportunities lie for your business, and how to price not only your rooms but also your additional offerings is critical in order to extract the greatest dollar spend from each guest.
At Preno, we help accommodation providers to not only streamline their expense processes but also provide them with insightful reporting that gives you transparency across your business and allows you to make more informed decisions.