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Tips to increase hotel revenue during low occupancy

Prabhash Bhatnagar
Prabhash Bhatnagar

how to increase hotel revenue

Every hotel owner dreams of full hotel occupancy. It’s a given, no matter how big or small the hotel. However, as real as this dream is, it is equally true that high hotel occupancy is a function of several factors and managing all these factors can be a challenge.

This fluctuation in high hotel occupancy also impacts the hotel revenue. A hotel’s room revenue may see highs during the peak seasons as well as extreme lows during off seasons. In an attempt to encourage full hotel occupancy, or even just to boost hotel occupancy, hoteliers often end up reducing room rates. This, however, is not a sustainable solution as it can guarantee neither full hotel occupancy nor increased revenue.

Seasonality is a common challenge in the hotel industry, regardless of which audience you cater to. Every accommodation solution witnesses high seasons and low seasons, in any given year. There are multiple ways to increase hotel revenue during low occupancy and from these we’ve handpicked some that can be easily implemented.

If you are looking for hotel revenue generating ideas when occupancy level is low, this article is for you. In this blog, we’ll discuss different ways that can add value to your business and help achieve full hotel occupancy as well.

How to increase hotel revenue when occupancy is low?

Before we proceed, you need to understand your room occupancy rate.

a) Note down your total number of rooms

b) Then note down how many are occupied

c) Divide the number of booked rooms with your total number of rooms

Your hotel’s revenue dictated by occupancy rate is also dependent on your hotel type, the location as well as the guest experience provided at your property.

5 tips to increase hotel room revenue during a low occupancy period:

Consider the following strategies to increase hotel revenue and get high hotel occupancy:

You can turn a low occupancy period into your favour by analysing details that give you many answers to use different hotel room sales techniques.

1) Evaluate the peak and off seasons

Why is this important for a hotel’s revenue? A lot rides on your hotel type, location and what it has to offer. Is your hotel in close proximity of a popular beach? You would need to evaluate your peak periods – whether the peak periods are at weekends or during the summer season. In this case, you might see a drop in room occupancy during the monsoons. Understanding this data will help you proceed further and find ways to boost hotel occupancy and realize your full hotel occupancy dream, as we’ll see further in this blog.

2) Dig into your guest data

Use your cloud-based Property Management System (PMS) to understand your guest history. Does your hotel attract more family bookings, corporate crowd, or backpackers? You must know your customer’s behavior to make data-driven and informed decisions for your hotel business. Using your guest data history, you can identify trends as well as define marketing strategies to increase revenue. Understanding the details in the patterns only simplifies the process of building a robust revenue model.

3) Create exclusive packages and deals

Now that you have the information on your peak and off seasons, use the data to create exclusive packages. The research will allow you to talk about the benefits instead of focusing on the features. You can add a spa coupon for a “Couple Package” or add local destinations to explore for an all-inclusive package for families. You can also offer an additional night as complementary during your off-season months.

Partner with local events managers to promote music concerts, exhibitions, etc. and target the right audience accordingly. Keep a close watch on what’s happening in the city and how it will appeal to your guests.

Regular visitors to your hotel can be upgraded to a suite to score those additional brownie points and win guests over! Instead of heavy discounts that may not add up to your hotel revenue, offer add-ons to tempt the guest into making the final booking.

It’s your data here which will guide you to create packages and upsell your services, even during those low booking phases, to the right target group.

4) Market it right

Now that your basics are in place, you need to market your offers on the right platforms. Your hotel branding, websites, social media platforms and more need to be in sync with your marketing goals. Use emotions to connect with audiences on social media. The art of storytelling via images and videos will keep online users engaged. For e.g.: add a video that targets the monsoon period and what it has to offer for the offbeat traveler.

Speed up your website and add the right CTAs (call-to-actions) on your landing pages, add a booking engine, and ensure relevancy in your emailers is maintained. This should translate into more bookings. Compelling copy that attracts attention and holds interest is a must to deliver your message across to get more bookings. Distribute your rooms effectively on various online travel agency (OTA) platforms.

Quick tip – A cloud-based hotel Property Management System integrated with a channel manager will be extremely useful for you. This will help you to distribute rooms evenly, and update rates and packages quickly.

5) An eye on the competition

A drop in the demand of rooms can also happen when you cannot price your room rate appropriately. So, how do you decide your room rentals? Should it be reduced for a particular season? Well, it’s necessary to keep a close watch on your competition. Price differentiation sometimes becomes unavoidable. To understand this better, study the hotels that have a similar offerings as yours. Understand how they price themselves and know when their room sells as a higher rate or for slashed rates. While studying each property is a daunting task, the use of a hotel property management system that is integrated with a BI tool will help you keep an eye on competitors, get real-time data on dynamic pricing and make informed decisions.

A Property Management System integrated with a revenue management system empowers you to make decisions in real-time across various channels. Use technology to develop an effective pricing strategy using a methodical approach for different seasons. The automated revenue management system decides the price and lets you manage operations and room distribution easily. Sell the right product to the right customer at the right time for the right price and via the right channel!

These were some effective hotel revenue generating ideas you can use to increase room selling during low occupancy periods. If you’ve found this post helpful, don’t forget to like, share and comment.

 how to increase hotel revenue