As revenue consultants, we have experience from lots of hotels. Many of them have already grasped the reality of demand-driven daily pricing based on multiple factors.
However, where room pricing management has become more flexible, availability management has not. In spite of the fluid nature of demand where segmentation has lost a lot of its past emphasis, hotels still insist on treating their inventory as a compartmentalised box with little room to play.
Thus, no sooner than a base room type is sold out on the PMS level, it gets closed on all online channels. State-of-the-art tools like PMS-Channel Manager integration or common inventory pool within a channel manager for all online channels make this process ever faster and efficient.
Yet when this happens for a given date, it means the hotel is not available on online channels anymore, or only offer other, more expensive room types, say, deluxe rooms.
As no OTAs can combine multiple room types within a hotel for longer stays and only lists hotels in search results when they offer continuous availability for the whole length of requested stay, this mostly means that even if you sell out and close out your base room type for just one single day over a period of two weeks, you hotel will not be in the search results of a customer looking for, say, a 10-night stay going through this one single closed-out date.
Additionally, do not bet too much on this customer booking your superior room category, for two reasons. First, the Deluxe rooms are more expensive, i.e. less competitive and, second, superior room categories tend to be more scarce than the base room category, so they most likely won’t be available for the whole 10-night stay either.
Which in turn means this high-value booking will go to your competitor.
This can be taken care of easily. Just keep your base room category open at all times and never close. Be more flexible and work with your rates instead. If you sell out your base room category, just make it all more expensive and do not close.
It does not matter if you sell your deluxe room for 175 EUR (as per your normal rates) or your standard room for 275 EUR (in case of yielding). If this indeed happens, you will be happy to upgrade the standard room reservation into the deluxe room if you happen to have no standard rooms at your hands at the moment.
In addition, more importantly, you will not miss on the highest-value long-stay bookings. Moreover, there is also a bonus. Try to search for a 10-night stay on any busy online market and see how many results you get. Very few. Which is all making it much more likely for these valuable bookings to end up in your hotel.
Moreover, if you factor-in cancellation rate in your calculations, you will get a very interesting game where you stand to much profit.
The demand in the global online marketplace has become fluid, so make your inventory management a perfect fit.
Mr. Petr Salda
Petr is the General Manager at Grand Hotel Zvon. He is a seasoned professional with extensive experience in Hospitality Industry.