Top Tips for Optimising Revenue25th January 2019
It goes without saying that rooms usually take responsibility for the majority of revenue made by hotels, however that doesn’t mean other departments don’t contribute. In this latest blog, our hotel asset consultants share how to optimise revenue across your business.
Look Further Than Rooms
Many statistics indicate that rooms make up 70% of revenue for hoteliers, however in some instances non-room revenue contributions can mean that a hotel operates on a 50/50 level of revenue. This is in part thanks to hotels engaging locals, hosting events and providing excellent and authentic dining experiences – some even offer additional services like spa, golf and leisure activities. Due to this, there has been a great shift towards lifestyle accommodation and that means incorporating more than just a room.
To maximise revenue across F&B and rooms you need to cater for both locals and guests. If you have not already got dedicated dining spaces, then adapting underutilised spaces to offer complementary or small-scale F&B operations will see an increase in revenue. Should you not wish to focus on food and beverage, underutilised spaces can be used for massage, spa or other added value services such as gift shops.
Packages and Positioning
Guests want to feel like they have received the best deal possible – this is where book direct incentives can help with profit, but many hotels also create packages.
Some of them for a limited period and some other during specific months. Consider working with local businesses to create packages that will showcase local sights, activities and experiences – doing so will not only strengthen local partnerships, it will also enable you to sell beyond one-night stay in the property. Don’t be afraid to be creative, and if your pricing is correct (effective and regularly monitored revenue management comes into play) then packages can add significant revenue. Offers can damage your brand if not used effectively, but packages should add value.
It’s never too late to look at the positioning of your property. If you want to boost revenue, then the hotel’s positioning within its market place needs to be on point.
This is not just about your price positioning against competitors but also your overall offering, competitive advantage and reputation.
Effective Revenue Management
Revenue management today is far more complex than ever before. To be effective, a revenue specialist needs to have sufficient market knowledge, experience, relevant market data and advanced revenue tools to make informed decisions.
As a result Revenue Management can help properties see increased occupancy rates and average revenue earnings per room. Hoteliers need to ensure that they are receiving the best possible price for hotel rooms based on the information analysed. M&T are able to gather and analyse such data to help you make the best decisions. This practice goes far beyond determining a good price – you want to be maintaining the best TRevPar to ensure competitiveness and optimum profit.
Our hospitality advisory company is here to help. Michels & Taylor have significant experience in the management of hotel assets and have a team ready to help advise on how to optimise your revenue that extends beyond the tips mentioned above. Thanks to a catalogue of advanced commercial tools plus a Europe-wide data bank, we are able to utilise analytics to support our clients with world-class analysis and revenue management reporting.
To discuss your needs with an experienced hotel asset consultant, contact a member of the team today.