A disciplined approach to revenue management, backed by the appropriate technology, is essential for hotels looking to optimise their revenue and returns. Today’s consumer has more purchasing intelligence, putting greater pressure on hoteliers to make accurate forecasts relative to booking demand, room pricing, and promotions.
With the rise of OTAs and other online distribution channels, a hotelier’s price and value perception is on public display across more digital touch points and platforms than ever before: hotels need to ensure that their market positioning and strategy is in alignment with public perception. To this end, revenue managers and management teams need to work hand-in-hand with sales and marketing to ensure that they are effectively meeting real-time consumer demand.
With that in mind, here is a list of 6 marketing tactics to help you maximise your hotel’s revenue growth.
1. Involve marketing with pricing and customer acquisition strategy.
Due to different booking behaviour and price sensitivities across online channels, revenue managers must involve marketing in order to reach customers with the right balance of price and promotion. By providing a granular understanding of the demand generation forecast, revenue management can work with marketing to strategise more effective promotional plans to reach consumers with the right mix of offerings across different channels.
2. More on-going collaboration with sales and marketing.
As technology continues to shape consumer behaviour, hotel operators must embrace a more holistic approach that combines the best of traditional marketing, online and mobile strategies, as well as revenue management. To stay competitive, hotels must include sales and marketing in their daily, weekly, and monthly revenue meetings and ensure marketing initiatives are focused on attracting guests from key target markets. According to hotelexecutive.com, “Hotels that have already integrated the work of their marketing and revenue management departments have benefited from revenue increases of more than 6%.”
3. Use marketing to drive targeted campaigns across all distribution channels.
Hotels can increase their share of bookings by timing promotions to combat peak and low-peak periods and using a mix of OTAs, meta-search engines, and mobile channels. With mobile travel bookings increasing by 20% in the first half of 2014 and accounting for the majority of online travel growth, a robust mobile marketing strategy is critical. Understanding consumer behaviour and price sensitivity across channels is key to maximising profits and revenue: in particular mobile channels are often last minute booking channels for travellers, allowing hotels to maintain greater price parity.
4. Invest your advertising budget in more targeted advertising campaigns.
Inspire more bookings to be conducted online and acquire more direct business via your website or booking engine. In particular, hotels can drive more direct bookings with social media: targeting consumers with frequent updates, special offers, and links to book directly at their branded websites. According to a US-based study, 21% of travellers have used Facebook to research hotel information and 13.8% used the popular networking site to book a room. By offering targeted and personalised promotions, offers, and travel experiences across specific channels, hotels can increase their share of direct bookings.
5. Measure customer responsiveness to promotions.
Strike a balance between volume growth and profitability. By using trend reports through your channel manager, direct reporting from channels, in-house reporting, you will gain the intelligence to maximise revenue, reduce costs, and streamline your processes. Because different channels (OTA, branded website, mobile) attract different segments, the key is to understand the interaction between your promotional activities and a channel’s demographics. The booking patterns and responsiveness across consumers will not necessarily be the same.
6. Integrate your technology solutions.
Give your teams the time and space to focus on longer-term strategic objectives and tactical campaign opportunities. Revenue management systems (RMS) combined with best-of-breed channel managers can help manage your rates automatically across different channels in real-time – 24 hours a day, 7 days a week, further improving a hotel business’ efficiency and speed.
Look for solutions that allow you to manage your rates and inventory across all relevant channels and work with your existing third-party applications. Such technology gives hotels an accurate understanding of their supply and enables informed, optimised pricing decisions – whether made by a revenue manager or an RMS. By integrating your technology solutions you can automate routine tasks, freeing up time and energy for other marketing tasks. The end result? Better results to both the hotel’s bottom and top line revenue.
These are just a few ways to increase your hotel’s revenue growth through better revenue management. By developing more effective ways of working together and sharing key data, hotel revenue managers and marketing teams can find common ground and meet their marketing and profit objectives.