Boost your hotel revenue

Apart from selling rooms, hotels wish to maximize their revenue. But with many markets becoming more competitive, boosting revenue is easier said than done. Increasing room rates to broaden margins might be great during high season, but during the low season, high rates drive customers away. Instead of simply adjusting room rates up and down, there are many other ways for hotels to generate more revenue and create a better guest experience at the same time.

Quick ways to drive more revenue in only a week: Upselling, Using your local network and Involving employees

Ways to drive more revenue over a quarter: Improve guest satisfaction and online reviews, Leverage low-demand days and Host unique events and activities

Ways to generate more revenue in the next twelve months: Get familiar with Google Hotels, Harness the power of hospitality tech, Analyse your distribution and optimize it.

To come up with the coolest ideas on how to implement some (or all) of these ideas, get your team together for some brainstorming. You’d be surprised by the original concepts they’ll come up with and how much more ownership your team will take if they feel like they’re playing an active part in creating and implementing new revenue-generating strategies.

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Loyalty Programmes

Loyalty programme guests are also more likely to perceive the company’s products and services as providing good value and so they are less sensitive to the company’s price premium. They are further likely to act as brand ambassadors by recommending the company through word of mouth, either through personal recommendations or via online review sites. Such recommendations, the researchers comment, are highly valued by hotel companies as they are known to be highly effective.

Nevertheless, loyalty programmes also bring challenges. They are, for instance, expensive to set up and maintain, and the profits they generate are hard to separate from those of other marketing efforts. It is also challenging for marketers to create and manage profitable loyalty programmes because there are high costs associated with adding value to customers’ experiences, especially given their widely differing needs and interests. Overinvestment is thus an ongoing concern.

Loyalty programmes also open up the possibility of “service encounter failures”, which can sour the relationship between a hotel company and its customers and thus damage its reputation. Another potentially negative effect is that “bystander customers” sometimes perceive “unfairness in comparison to target customers”, which could put them off the brand.

It is found that hotels’ spending on loyalty programmes was associated with better performance, as measured by the average daily room rate, revenue per room and occupancy rate. Spending on loyalty programmes also pays off in terms of hotels’ overall gross operating profit. This is particularly interesting because it implies that loyal customers do not just increase room occupancy, but their spending on “food and beverage at the hotel, spas or other amenities” also contributes to better overall financial performance.

Even when factors such as the amount spent on e-commerce, advertising, marketing strategies and the size of the hotel and scale of the hotel chain are taken into account, spending on loyalty programmes still has the most positive effect on hotels’ operational and financial performance. In other words, loyalty programmes bring in the greatest returns compared with investments in other forms of advertising and marketing, regardless of the type of hotel.

Hence Managers are justified in placing more emphasis on loyalty programmes because they bring the greatest returns.

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The Gig Economy

The gig economy is booming, and that’s good news for hotels. The gig economy is defined as a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

In less than a decade, the contractor workforce is expected to become the workforce majority. While the contractor workforce may not be a fit for all business models, hoteliers are undoubtedly benefiting. Timely solutions for staffing needs, seamless integration and measurable results are what hoteliers need and want.

Today’s contractor workforce represents diverse professional backgrounds and experiences allowing for that seamless integration that every hotel leader is seeking. Unfilled positions result in lost revenue. Hotels have goals, and ownership expects those goals to be met – no excuses.

Most contractors have 10+ years’ experience in the hospitality industry, and more than 64% users agree that contractors offer varied experience and unique perspective required for taskforce.

From the perspective of the freelancers/contractors, Lifestyle is key. Both freelancers/contractors and full-time professionals prioritize achieving the lifestyle that they want; however, freelancers/contractors are more likely to get it. More than half of all freelancers/contractors say no amount of money would convince them to take a traditional job.

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Google: #1 Hotel Review Site

Online reputation management has traditionally concentrated on TripAdvisor reviews. Hotels and restaurants in particular know how important online reviews have become ever since sites such as TripAdvisor came into the spotlight almost two decades ago.
Google with its “of course, we can do it better” mantra has beefed up its own review platform, which is fully integrated into its existing search and maps empire. They always play to win. All of Google’s recent upgrades have served to make them a better information center for the end user. TripAdvisor with its hyper-narrow focus might be the biggest review website in the world today, but it is getting pushed to the sidelines by a bigger and smarter competitor.

Review Distribution by Site – Source: Revinate

As expected, Google indeed did overtake Booking.com in the #1 position, as both sites are now dominating the field, with TripAdvisor coming in as distant third. While 74% of reviews were posted on four sites in 2017, a greater percentage is now concentrated in only the top 3 – Google, Booking and TripAdvisor.

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Human vs. Machine

Research by CWT, the B2B4E travel management platform, shows that travelers prefer to manage transactions digitally, via an app or browser. Seventy-eight percent of business travelers prefer to book their hotels digitally rather than have human interactions. However, travelers are more receptive speaking to a person face-to-face when checking into their hotel (46%) and checking out (51%). Overall, Asia Pacific travelers are more likely to choose technology over personal contact with 84% preferring to book hotels digitally, versus 77% of those from the Americas, and 70% of Europeans.

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