Hotel Revenue Management
The importance of an innovative mindset in growing RevPar
Whether you are an independent B&B, a boutique hotel, a nationwide chain or have an international presence, there is little doubt that the hospitality industry is challenging right now. A report by PwC Hospitality Directions pegs the supply growth of hotels to reach 1.9% – almost, but not quite – reaching the peak of 2.0% recorded in 2009. Add more accommodation available, which translates to more competition, with a global trend for declining demand, and the environment is tricky for hoteliers.
In 2017, analysts Ernst and Young forecasted that RevPAR growth would decline to its lowest level in seven years. This might add up to fewer travellers and more accommodation options for them to choose from, but there is not cause to panic. Yes, navigating this challenging landscape and emerging victorious calls for strong hotel revenue management and an innovative mindset. However, that same mindset can see hotels soaring ahead of their less responsive, pioneering rivals.
Being innovative means your hotel revenue management team needs to know exactly what it is guests wants. What convinces them to make a booking? What do they look for? What turns them off? Using this insight to fuel decision making and chart your course is critical to growing RevPAR.
So, what areas should your hotel be innovating in?
A TripBarometer survey of travellers in 2016 found that price of accommodation was the deciding factor for 93% of guests, however ratings and accommodation scores on review sites was a close second, with 88% of travellers saying it was a deciding factor. Online reviews and posts on TripAdvisor was the third most important factor at 86% and proximity to key attractions scoring 82%. Accommodation amenities clocked up 76%.
The takeaway from this report is that those perks that you may have used to entice guests to make a booking such as included Wi-Fi or flat screen TVs in room are no longer viewed as being exceptional. In fact, guests expect them. This means to grow your RevPar, you need to identify other ways to up the convenience factor and delight guests during their stay with you. This in turn leads to positive reviews online, which will bring in more guests and help to boost hotel revenue.
Use your hotel revenue management data to innovate
Your hotel data is a treasure trove of opportunities just waiting to be leveraged, if you understand and analyse it correctly. Use your hotel revenue management software to understand trends and interests and then use this knowledge to offer something tailored to your guests. You may use this to adjust in-room offerings or overhaul your rewards program to offer perks that truly delight guests – the key is to let it inform your guest experiences to ensure your rewards and offering is distinct from the competition.
Invest in technology
With previous tech such as Wi-Fi now expected as standard rather than appreciated, investing in new technologies can give you the edge over rivals. Installing in room voice assistants such as Siri or Alexa for example could be an easy way to get ahead. Augmented reality or apps that offer keyless access are also emerging in forward-thinking hotels.