Hotel room pricing has been the subject of much debate for a while now. Accommodation providers are finding it increasingly difficult to arrive at the right rates for the right markets. OTA contracts make things even more complicated for hoteliers who are forced to freeze prices for certain sites.
With some OTAs even redistributing rooms through external parties who then undercut the property’s rate, hotels are left with a revenue management mess that could threaten their credibility with guests.
But there are deeper problems haunting this sector of hotel management. Although legacy systems are widely being replaced by cloud-based systems around the world, there are still a number of properties that rely on outdated software. The lack of integration and real-time pricing for OTAs, hotel websites and other distribution platforms inhibits these properties from maximizing their revenue.
There are a number of ways hotels can begin focusing more on improving revenue management without spending a lot on investments – here are five of the key ones:
Display Clear Call-to-actions
This might sound obvious but it’s surprising how easy it is to miss the ‘Book Now’ button on a number of independent hotel websites. After investing so much time and effort into building your website’s traffic, the last thing you’d want is to point any potential guests to your OTA partners. A large, brightly-colored call-to-action in a prominent section of the site ensures that guests remember exactly where they need to go when it’s time to make the booking.
Adopt Simple Pricing
Guests have different priorities when booking travel accommodation but figuring out the seven pricing plans is not one of them. Too many options can confuse the guest – that’s something you never want when a customer’s at the checkout counter. It’s always best to keep things simple when it comes to package selection. You can always list the additional features as add-ons, allowing you to upsell while making it simpler for guests to choose what they want.
Embrace Last-minute Bookings
Last-minute reservations make up a significant proportion of all bookings made on OTAs and this number is on the rise. With so many guests taking to their mobile apps as a last resort to find rooms, ensuring that your hotel is on platforms like HotelTonight can help you push your inventory on a high-demand market that’s getting bigger every year. In fact, planning out a different revenue management strategy for this market would be ideal in order to attract more bookings in a shorter period.
Protect Your Room Rates
While hotels may be contractually obliged to offer a best available rate to OTAs, make sure that the property’s website also offers the same rate. If an OTA is eating up a significant chunk of the market in a region where you’ve already established yourself, it makes more sense to cut ties with the agency for that geography.
Take Advantage of Loyalty Programs
Loyalty programs are a great way for hotels to develop relationships with guests, increasing the likelihood of them returning. The majority of travelers are price-conscious and enabling them to earn concessions gives them the opportunity to save at your property. An added advantage is that most of these guests will book directly on the hotel’s website the next time they make a reservation. Be wary of online agencies that strip hotels of their authority to offer such programs to guests.
Revenue management was once viewed as a supplemental part of a hotel’s operations but with markets expanding and competition intensifying, it has now become a priority in order to stay relevant in today’s constantly evolving industry.