to Survive & Thrive in Changed Hotel Industry,
Urges Maverick Hotel Trainer Aspire Marketing
the Revenue Management Revolution
“Many hotels have allowed the Internet to take control of their hotel pricing strategies and it must be the other way around for them to succeed,” stresses Cavallari. “Hotels are dumping inventory and eroding their pricing integrity,” she declares.
Currently, pricing has become so random that hotels’ customers find a variety of prices for the same room in various locations from the hotel’s website to internet travel sites, such as travelocity.com, or expedia.com. When pricing is random vs. strategic, hotels end up displacing revenues instead of driving them.
Ways to Increase Revenues ASAP
To maximize revenues, hotels should consider offering their best price
through their own reservations office and website. Instead of relying
on internet wholesalers or travel portals, Cavallari recommends that hotels
should, “participate in every sales channel you can, but be strategic and
use smart revenue management approaches to ensure that you are not displacing
revenues or increasing your cost of sales.”
Aspire’s research has found that customers don’t shop like they used to. More than ever before, customers are using the Internet to shop. If they call the hotel directly, they are calling for one of two reasons: to see if the hotel is offering a better price than what they have found online, or to get an understanding of the hotel.
Most hotels need to consider a different approach to how they are pricing, insists Cavallari. “In the past, customers could find the best prices everywhere other than the hotel itself. That has to change,” she explains. “It’s crucial that the customer know they won’t be offered a better price elsewhere. Pricing must have integrity, support the hotel’s positioning, and reflect demand and market realities.”
In addition, pricing must be strategic. For example, traditionally, hotels sold their rooms by offering the highest priced room first. In today’s marketplace, hotels must set pricing daily and offer their best available price (their lowest price) first to the customer. Simultaneously, hotels must also sell “the experience” with every call to ensure that the customer knows what makes this property unique from other hotels. Once they convert the reservation, then hotels should up-sell to maximize revenues.
Says Cavallari, “You must have a strong reservation sales selling process and team in place. It doesn’t matter if you have one person selling or 10, conversion is king. Understand that customers are buying an experience and want to receive value for the price they pay. If you just sell a hotel room then you are putting yourself in a rate-only competition.”
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