Revenue Management
Revenue Management: Supporting Your Pricing Strategy
The core component of any revenue management strategy is dynamic pricing. But revenue management is about optimising revenue, not just changing your rates. And this involves supporting your pricing strategy with other activities.
Whether you change your rates daily, or once a year, you can manage your revenue with more confidence and achieve better results by considering other areas that affect the quantity and quality of your bookings.
Supporting Pricing Strategy with Improved Channel Distribution
The best way to attract more guests and higher rates is to be seen by more people. Adding additional distribution channels is a fast and easy way for small properties to achieve this and support their pricing strategy. And once set up, they require very little extra effort to maintain. Even a dozen extra bookings a year may justify an additional channel for a small property. Examples include additional OTAs, direct booking engine for website, GDS.
Being Flexible with Rates and Availability
Being flexible with your rates and availability allows you to adapt to variations in demand throughout the year. Rigid pricing however causes missed bookings and lower revenue. But flexibility isn’t all about price alone. For example you might increase the minimum stay during the busy period to lower costs and boost profit, but accept shorter bookings in the low season to fill rooms.
Supporting Pricing Strategy by Improving Guest Experience
Positive experiences increase the likelihood of a positive review. And positive reviews lead to more and higher-value bookings. It’s all about giving people what they EXPECT, not what they want. Make sure images and descriptions across all distribution channels are accurate. Factor guest expectations into your pricing strategy. Look for small, low cost ways to surprise guests and exceed their expectations.
Supporting Pricing Strategy through Actionable Data
Having access to actionable data helps you to benchmark your property against similar and competing properties in the market. This in turn helps you make better decisions when it comes time to make changes to pricing and availability. STR benchmarking is a great place to start, and can be integrated with GuestPoint for just $5/month. More info on the STR website.
Assess and Maintain Your Online Presence
The online world in which your property is shown to potential guests is constantly changing. To support your pricing strategy, it’s a good idea to regularly assess your booking process for each channel. Just go online and pretend you are a guest looking to book a room. Identify and remove potential roadblocks such as dead links on your website. Make sure images are displayed correctly and are of high quality on all channels. Improve and update your descriptions and policies.
Booking Automation
Part of maintaining your online presence is removing potential roadblocks to booking. Roadblocks, such as having to wait for an email or callback, create a high risk of that guest being lost to competitors with an easier way to book. It’s for this reason it is usually a good idea to provide at least one avenue to book directly online. Make sure you have a wide variety of online channels so your guests can book their way. Make sure each channel contains adequate information and assurances (like clear cancellation policies) to remove potential uncertainty. Provide regulars with a promo code they can use on your website’s booking engine to always get the best rate when they book direct.
These are just a few ways you can optimise revenue and support your pricing strategy, dynamic or otherwise. By incorporating those that fit your unique situation and goals, you ensure you are attracting the best guests for the best price. Be sure to also read our blog on Hotel Price Compliance.
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