Years of meticulous planning on marketing, quality service, and an efficient revenue management strategy must have brought the likes of Hilton, Marriott, and Hyatt from independent hotel start-ups to world’s leading hotel chains. However, the popularity and influence of hotel chains make it harder for today’s independent hotels to compete. A phocuswright study revealed that until 2015, hotel chains have been growing thrice as fast as independents!

The obvious challenge is that independent hotels have fewer resources, less brand recognition and a limited budget to invest in high-end technology. Many independent hotels also lack a dedicated revenue management staff, which is why the need for an effective revenue and hotel management strategy becomes a pressing one. Can revenue management address independent hoteliers’ most common challenges?

Let us look at some plausible ways.

Prioritize GOPPAR over Occupancy:

In the era of competitive pricing, it is the Gross Operating Profit per Available Room (GOPPAR) that wins maximum Average Daily Revenue (ADR), not occupancy. A hotel with 78% occupancy with higher room rates may drive in more revenue than another hotel that settled for low-rate business just to achieve 100% occupancy. The practice of price-lowering for increased occupancy, therefore, does not serve the purpose and must be avoided.

Optimize Distribution Systems

Optimizing distribution systems can be quite a challenge, but it is important. Asking the following questions will help you address the key concerns regarding optimization of distribution channel management and decide accordingly.

  • Which combination of distribution systems gets the maximum revenue?
  • Which one offers a good cost-benefit ratio?
  • Which system gives the maximum long-term benefit?
  • How can the systems be integrated to avoid errors in computing inventory and bookings?

Select the ideal combination of distribution systems to avoid frequent U-turns in distribution decisions that usually lead to wastage of time and resources.

Build Long-Term Guest Relationships

While the benefits of pricing your rooms higher than those of your competitors have been discussed, you must justify the same by giving your guests quality service. It is the single most important element that builds long-term customer relationships, which are much more critical for independent hotels than for large chains.

Leverage Dynamic Pricing, but Cautiously!

Although dynamic pricing may benefit a hotel due the opportunistic price-tweaking involved therein, it should not be overdone. Caution must be practiced with dynamic pricing operations in a highly competitive market. Demand forecasts should be made with a thorough study of aspects such as arrivals, reservations, conversions, cancellations, group bookings, no shows, seasonality and customer loyalty.

Pricing intelligence software tools are much needed, to compare prices, track inventory, to give hotels the market information they need and to aid their pricing decisions and distribution. If a revenue manager makes a learned decision to use pricing as a competitive weapon, dynamic pricing can become one of the most effective tools in the combat for price-sensitive customers. Hence, keeping a steady and competitive price is beneficial.

Focus on Non-Room Revenue

Who said rooms are the only focal point for all revenue activity? Bars, pools, gaming halls and spas contribute much too. Hotels offering such elite services can strategically price them in accordance with customer segmentation and demand forecasts to drive in more revenue than otherwise.

Leverage big data for to analyse guest habits

Use data collected through various platforms and different stages of a guest life cycle.for analysis of demand patterns, guest preferences, feed for changes in market price, occupancy, etc. This will save both time and resources – the two critical elements independent hotels always run short of.

Boost Your Direct Bookings

December 2015 Phocuswright Study covering a large number of hotels in Europe and U.S. revealed that direct bookings from the hotel’s website would make for more than 26% of online sales, including mobile phone bookings. This will only increase now as hoteliers begin to understand the potential of an own website with an efficient online booking tool to substantially increase revenues.

Is this enough?

Not really.

Independent hotels lack resources and time to invest in dedicated staff to manage several critical revenue management tasks, one of which is Marketing. An inability to shell out commissions for OTA listings limits their market reach. This, in turn, translates into a lack of sufficient reviews to help customers’ decision making on online hotel bookings. You clearly need something more. And, so we thought: How about automating some critical tasks to get the much-needed operational efficiency?

A competent Channel Manager is necessary for efficient distribution of your inventory.

How Marketing Automation Rescues you from the Typical Independent-Hotelier’s Challenges

Independent hoteliers must make the switch to automation of certain marketing tasks, which would otherwise consume much time and resources to tap the enormous revenue-making benefits that technology brings along.

Although obtaining a customized automation software is an investment, the long-term operational benefits coming from the same are unmatched.

  1. Automate Review Analysis: 36 % of travelers booked hotels relying on online reviews, a 2014 Google study That is how beneficial online reviews can prove to be. An automation program lets you read reviews from several third-party OTAs so you can analyse and address them accordingly.
  2. Automate emails: Obtain email ids of your guests on check-ins, or even when they book your online. You can then send emails about your hotel’s latest offers and schemes and even request them to write reviews on your OTA listings or your own hotel website.
  3. Automate communication through templates: You can build a stock of response templates for your customers so you can pick and put the appropriate responses to customer queries wherever needed. This dramatically speeds up a simple yet tedious task and facilitates online reputation management for hotels. What’s more? It does not even require an expensive piece of software!

The same can also be followed in inter-departmental communication to keep various interlinked operations of your hotel running smoothly.

  1. Automate Campaign Performance Analysis: It is only through a thorough analysis of performances of your marketing campaigns that you will know which ones to maximize and which ones to eliminate. The data giving you information about the campaign that brought you maximum guests, their demographics, the time of the year, etc. can be automatically obtained and periodically analysed by the software so you can focus more on the marketing strategy than on manual reporting.
  2. Automate Guest Preference Analysis: Your automation program can give you all the information about the contact details of guests, the type of guests that opted for a particular booking plan, the number of guests who used your non-room services like spa and gaming to help you strategize accordingly.
  3. Automate Analysis of Performance of Distribution Channels: Proper Channel Manager is one area in which strategic cost cutting can substantially increase revenue. As discussed earlier, choosing the best combination of distribution channels helps increase
  4. RevPar, and the process of making this key decision can simply be automated based on data about the amount of revenue generated through different channels.

Being an independent hotelier, however challenging in the competitive market, offers invaluable opportunities to stay ahead in the market. Bigger chains have strict rules and procedures, the absence of which offers room for creativity for independent hotels.

Since many guests seek an authentic experience, independent hotels can carve out their niche in that segment as well. Couple it with an automated marketing operation and an effective revenue management strategy, and the benefits will delight you!