Five Tips For Transforming Hotel Revenues Post-Crisis
As the global crisis has affected the hotel industry's growth performance, forward-thinking hoteliers are shifting past the revenue management crisis and positioning their hotel business to rise ahead when the worst is over. What should your hotel be doing now to managed revenue growth while setting the foundation for the post-crisis revenue increase?
Scott Frothingham, the Pioneer of remote hotel revenue management and Founder and CEO of RevOptimum – a Hotel Revenue Growth Company offers five strategies to get your hotel moving towards the power of revenue improvement:
1. Move from Crisis Mode to Performance Mode
The first action you may take to avoid continuing in crisis mode is evaluating your current business plan. Review the revenue streams that affect your property the most and find an effective solution to flip the switch back on. As revenue growth and industry moves are fundamental elements of your assessment, identify beyond the factors of trouble and think of innovative solutions.
For instance: "If the room revenue performance did not reach by the determined date, what are other revenues strategies that could have corrected the growth path?" Followed by applying the identified new strategies to the current process for better performance results. Evaluate the outcomes and repeat if the cycle worked. Next, add a continuous check for innovation, fresh ideas, and creative approaches to your hotel plan. This will help you reach revenue performance targets, staying competitive in the hotel industry.
2. Change Your Outdated Revenue Strategies for Post-Crisis Needs
The economic impact of crises is significant to the unfavorable hotel industry performance. As events change business results, we need to learn to adapt to the new revenue management approaches and apply them for improved revenues. It is crucial to force ourselves out of the rigid revenue management method and obsolete revenue procedures before the crisis. A simple way of understanding this is to ask yourself, "Are my rooms unsold due to my unchangeable perceptions regarding room rate strategy, hotel image, limited promotions, and competitor set? Is my revenue static because I cannot throw away my inflexible methods?"
What do you want to achieve holding onto these methods? To project a particular image of your hotel? To limit or extend occupancy based on guest profile? To increase your revenue opportunity? Or to probe your mindset resistance against all crises? It is crucial that you move on, to allow new strategies to revenue recovery rather than control. To change a hotel business, revenue growth is to change the dynamics of your operation. Embrace crisis in choosing a new approach to your hotel system, revitalize your hotel growth, and have an opportunity to thrive and lead the market neatly.
3. Build Powerful Small Tactics for Instant Revenue Wins
The trend of most hotel owners - especially for independents - is to put all their focus and efforts into the same fixed strategies with an intransigent approach towards new ideas to create additional revenues. This builds a high risk of revenue immovability and, therefore, profit loss. It is important to recognize that the strategies that worked for your hotel in previous years and that you insist on holding on to for your hotel today are not helpful or profitable under crisis mode. For an immediate revenue turnaround, hoteliers should focus on reaching a series of immediate wins to activate hotel revenue growth.
There are numerous signs of intransigent strategies that you should identify as a hotelier and swift promptly for improved results. For example, when you focus merely on getting direct organic traffic versus online distribution, avoiding promotions and value add opportunities, pricing your hotel rooms non competitively, and unwillingness to work with the OTA's to expose your inventory, are some signs that you are obstructing your own revenue growth.
The best solution to avoid this trend is to move your ideas into resourceful strategies. For instance, implement room type distribution at discounted rates, optimize room type differential pricing, remove overpricing of your suite products, uncover new distribution opportunities, make use of your repeat customer database, enhance your social media strategies and use OTAs as part of your search engine optimization.
These are few strategies that can drive traffic to your hotel website, improve sales performance, and boost your revenues. An example of how well a change of strategy may work is when "It took me almost a year to persuade a hotel owner to market his oceanfront units on all distribution channels – and when that happened, his hotel experienced an immediate revenue growth!" said Frothingham. The payout of commission on distribution channels is indeed high; the hotel profits from such a strategy that is considerably higher and boosts instant revenues without marketing spend.
Using powerful small tactics improves the hotel's bottom line and generates direct sales, strengthens relationships amongst OTAs, builds improvement of GDS (Global Distribution System), and delivers customer awareness that converts into additional sales.
4. Transform your Hotel Revenue Management Team
As a hotel owner, you are likely to find employees who are always supportive of your outdated revenue management strategies. They will go with your hotel operation's flow to show that their purpose is aligned to yours. But this practice is not productive and creates underachieving performances. If you resist change, your team will resist change. And the strategies that get ignored are the ones that could be producing revenues for your hotel business.
A great solution to avoid creating underachieving hotel teams due to your negligent approach towards change, is to search for outsourced solutions with deep revenue management expertise and revenue-crisis knowledge. A contracted, expert team can identify your strategy blunders and the highest revenue growth errors impacting your hotel without being afraid of discouraging your opinions. But contributing to the vital transformation of your revenue management operations by creating:
- Additional Hotel Market Expansion
- Sales and Yield Strategy Redesign
- Customer Market Post-Crisis Practices
- Hotel Product Evaluation and Promotion
- Competitive Revenue Growth
Once you implement a shift like this in your hotel organization, your team will rise to new standards and learn the importance of instant revenue wins, the value of implementing fresh revenue actions that are aligned to current conditions, and become an effective hotel revenue management team with powerful and fast go-to-market solutions.
5. Expect More From Your Outsourced Revenue Growth Experts
The ultimate benefit that an outsourced revenue team brings to your hotel business is their capacity to identify the flaws as an outsider but perform solutions as an insider without distractions and obstacles. This allows your remote revenue team to identify the weaknesses and risks in your current revenue management plan, strengthen it with new techniques to increase your revenues, or build a brilliant new revenue management plan without experiencing direct resistance from the hotel team. Initially, these new strategies may not be well perceived by the executive team, but they will eventually connect with the group when the costs go down and revenues expand.
It is easier for your remote revenue management team to stay on top of your revenue growth solutions, during a crisis, than expecting your hotel team to do so. Because, while the outsourced team has only one mission to accomplish, and that is to recover your revenues – your hotel team must cover many burdens of the business operation, especially under crisis conditions.
When you outsource a revenue-recovery team, you obtain support to:
- Fill the revenue management coverage or gaps as you conduct a search to fill the position.
- Retain a knowledgeable revenue management team versus one revenue manager.
- Support your current hotel operations to succeed at the revenue-recovery plan.
- Put the right systems, processes, and methods in place to achieve revenue improvement success.
- Build a revenue management system that drives continuous successful results.
A specialized remote revenue management team can move your hotel revenue growth in just a few months because of their field expertise and hands-on approach with crisis recovery, revenue planning and execution, yield assessment, and revenue strategy. Bringing a remote revenue-recovery knowledge to your hotel is a smart move to renew your hotel revenue at any stage of business performance.
Outsource revenue recovery strategists in the hotel revenue management field to ensure a safe and successful relaunch of your hotel's economic growth.
30 years empowering the hotel industry’ revenue growth, RevOptimum is dedicated to advancing hoteliers and hotel organizations achievement by:
- Pioneering remote hotel revenue management solutions and revenue platforms.
- Creating innovative and cost-effective revenue-growth tools and productive strategic plans.
- Committing to positively impact hospitality groups and communities worldwide.
- Empowering every hotelier and every hotel business to achieve higher revenues and make it sustainable and permanent.
Interested in learning more about outsourcing hotel revenue growth experts? Contact us at RevOptimum - the pioneer of remote hotel revenue management.
About the Authors
Scott Frothingham is the Founder and CEO of RevOptimum, which focuses on Hotel Revenue Management and Revenue Growth distressed Hotel Businesses. Scott is a pioneer of hotel revenue management and has increased more than $2Billion USD in hotel revenue.
Mia Frothingham is a Harvard undergraduate. Business Strategy Expert and Revenue Increase Master. Mia serves as the CMO for RevOptimum – Hotel Revenue Management and Revenue Growth Company.
About the Author
Scott Frothingham is the Founder and CEO of RevOptimum, which focuses on Hotel Revenue Management and Revenue Growth distressed Hotel Businesses. Scott is a pioneer of hotel revenue managment and has increased more than $2Billion USD in hotel revenue.