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Rev Up your RevPAR In 4 Different Ways

By Jean Francois Mourier, October 2009
There are few things more important to hoteliers right now than finding ways to increase bookings.  This is evident everywhere, from large chains advertising across-the-board rate discounts to boutique properties launching aggressive advertising campaigns designed to put heads in beds.  Hotelsí occupancy and RevPAR, always key metrics for the industry, are in desperate need of revitalization.  
Lucky for you, weíve compiled a short list of four highly effective tactics that can help hotels increase both RevPAR and occupancy through the fastest-growing (and most important) sales channel currently available to them Ėthe online channel.
Re-evaluate your Compset

The time-honored Smith Travel Research compset, once the only way to define a hotelís competitors in a geographic area, has become outdated.  Online Travel Agencies (OTAs) have changed the way consumers shop for hotels, so it stands to reason that the definitions of a propertyís competitors should change as well. Smart travelers will compare price and star ratings to obtain a quick assessment of what they can get for their money within their location, regardless of location. Hoteliers should do the same.  By being objective and realistic, looking outside the traditional or STR-dictated compset, widening the vicinity or sub-region of the hotel, comparing guest reviews, and generally expanding the amount of hotels considered competitors, a hotelier can get a more realistic sense of what their compset actually is. Soliciting an outside objective opinion of what the hotelís compset seems to be, as well as ranging ½ star up and down in quality rating, can help complete this exercise.
Hands Off!

Manually manipulating hotels rates and yield is, by definition, limited.  The world of electronic sales moves too quickly for sales teams and revenue managers to optimally match rates to supply and demand fluctuations.  Human operators lack the capability to yield at night or during weekends when it matters most.  One of the worst things a hotel  can do in an era of transparent pricing is to keep rates the same, so hotels need to take the appropriate steps to yield rates in a way that doesnít leave money on the table. The booking window is shrinking even more as consumers turn to mobile bookings, so automation becomes the ultimate yield-empowering tool.  Automated revenue management systems can integrate distribution simultaneously with rate decisions so a hotel doesnít have to compromise on rates and occupancy.
The Power of Page Position

Just as with search engine optimization (SEO), the order in which a hotel appears on the pages of an OTA is critical to bookings.  Whether a hotel is listed at the top of the first page, or in the middle, or at the top of page 2 can mean the difference between successful occupancies and disappointing vacancies. Today, travelers use OTAs as hotel search engines- using it the way that they would use Google to see what hotel options exist in a particular destination- so a hotelís position on these sites corresponds directly with occupancy and sales. Hoteliers must anticipate their competitorsí rapid rate changes to ensure the property does not fall off page 3 or 4, which, to online consumers, might as well mean that the property doesnít exist.  To gain maximum market share, hoteliers should calculate optimal pricing positioning by star rating, guest reviews and location.  A multiple-page positioning approach can benefit a hotelís prospects for OTA-driven bookings.
Monitor & Control Inventory

Hotels routinely allocate rooms to their OTA channels, but what happens if that allocation falls short of demand?  What if those rooms run out on nights or weekends, when the revenue management staff is off the clock?  A good hotel will take a page from big box retailers and keep their inventory out on the shelves (or available to the public through OTAs) instead of in the back storage room.  

Hoteliers should allocate resources in their budgets for real-time dynamic rate optimization with automatic room inventory control. These powerful tools will ensure proper room inventories on all electronic channels day and night giving the hotel a proactive attitude versus a reactive stance. Continuously monitoring the pace of bookings and having automated GDS and OTA allocation updates can help maximize online bookings.
Get Online!

While these strategies cannot always guarantee profitability for hotels, they can certainly help increase bookings on that most important of sales channels: online.  It is through successful electronic sales that many hotels can reach positive RevPAR and high occupancy rates.

These four strategies will most certainly rev up your RevPar, and represent a solid starting point for a comprehensive revenue management strategy that will take your property through the end of this recession and into a more profitable and long-term recovery.

Jean Francois Mourier is CEO & Founder of REVPAR GURU, a company that has developed an alternative type of revenue management and real-time pricing solution (combined with automated online distribution) to help hotels maximize occupancy and increase their profits. 

Jean Francois Mourier

Also See: Six Reasons Your Revenue Management System Isnít Working / Jean Francois Mourier / July 2009

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