While a lot of hotels strive to achieve a fine balance on what strategy to apply in their business strategy, Push Occupancy or Strive for higher rates; it is extremely critical to identify high-demand periods in advance as those are the dates when hotels MUST push rates as well as occupancies.
All markets experience seasonal fluctuations in their business patterns and this seasonality clubbed with perishability aspect makes revenue management in hotels a crucial exercise, and thus not identifying and then maximizing on high demand date in future is suicidal for hotels. While hotels continue to push for “Heads in Beds”, it is that extra dollar in RevPAR which they really want as that is what helps in the bottom-line.
There are many ways to maximize but it’s generally a combination of many techniques that can get the work done. Some of the easiest techniques are:
a) Plan your room allocation and ensure that there is an opportunity for hotels in terms of room availability to yield and thus it is essential to have rooms of higher category to be yielded by transient demand on such dates.
b) Having made this point it’s crucial that inventory management discourages upgrades by overbooking.
c) Close out Discounts and ensure that you have increased prices of all room/rate type combination.
d) Ensure that there are no blockages in distribution pipeline and the high priced room/rate combinations are available for sale. At the same time there are enough levers in place to flow the demand in low demand dates as well.
e) Identify your business mix and try to keep low priced business at minimum possible. Generally, group business or Corporate RFP business comes with Last Room Availability, which is at a low price, is identified and try to shift demand, if possible, to lower demand dates to ensure each segment is catered as well as revenue opportunities are maximised.
It is extremely important to ensure that high demand dates are yielded and thus using technology to give alerts of high demand, competitor price change, market supply, etc., is the need of the hour. A Rate Shopper which can highlight price change in competitor pricing to indicate their availability is highly desirable. Scientifically calculated Price Recommendation too are thus extremely useful for a Revenue Manager as a Guide for their Transient Pricing which is the only market segment where they can maximise.