At RoomPriceGenie, we speak to a lot of hoteliers. Although they all know that revenue is important (that’s why they are talking to us), often the whole subject is very confusing. So we thought we’d break it down a little and make the world of revenue management software a little more bitesized.
A quick disclaimer before we start: we haven’t tried every software option on the market. Check out Capterra as a great recourse for software comparison or have a look at our blog post The 10 Best Revenue Management Software Providers and Which On is Right For Your Hotel. These will give you a better idea on how to pick the right system for your hotel.
For now, this is just a list of software we believe can help owners/managers of small and independent hotels. We’re not sponsored, we don’t get any money for these recommendations (except where we recommend ourselves, obviously), we’re just trying to be help you and your hotel get on your way to bigger revenue.
First things first; what is revenue management? Fundamentally it is about making the most of your biggest asset – your hotel. It’s about taking measures that increase your income and, in turn, profit. It’s about selling the right room, at the right price, to the right person, at the right time.
Sounds easier said than done right? Fortunately, there are a lot of easy tricks that can get you a long way. Divided into four sections (Pricing, Upselling, Monitoring and Widgets), this post will help you win big on a small budget.
The most important thing you can do for revenue management is get your prices right. You should charge more when it is busy and less when things are quiet. Similarly, you should charge more when you are running out of rooms and less when you have a lot of empty ones. Demand should dictate the way you price, don’t miss out on maximising revenue by flat-rate pricing. Know where you can make a little extra and when you have to cut back. The difference that this can make to your business is huge.
For small hotels this has always been hard, complex and numerical work. Not any more. Now RoomPriceGenie can do it all for you – in the simplest possible way. We can automatically update your prices a few times a day, based on local demand, and make sure you are always charging the right amount.
We genuinely can’t stress enough how much this will change your business for the better, as it has our current clients. Need more convincing? Have a look at a recent case study in which our customers saw an average revenue increase of 22% compared to the same time last year.
We are currently offering a 14 day free trial period with no set-up fees. Why not get in touch now and speak to our team about how you could be making more money for your hotel.
Alright, the hard sell of our product is over. Now onto some other useful tools. Starting with upselling…
When someone travels, they have a budget and a hotel is part of that. But they also have a lot more money to spend. As a hotel you want to try to capture as much of that spending with you as possible. This is where upselling comes in. Sending clients emails with extra offers before they arrive is a great way of doing this.
Supposing you have two room types – a double and a superior double. What happens when the doubles get full? You can only offer your superior doubles and these cost more, meaning that you may lose clients. You can upgrade people but you may well have to do it for free.
What if you sell the upgrades at a discount? You move people out of the more popular rooms and you get paid to do it. This is the idea of UpsellGuru, which allows your guests to bid on upgrades on their chosen dates of stay. You can set minimum and maximum bid limits, as well as approve or deny any bids coming in. The process is automatic once you’ve set your criteria so you don’t have to do much additional work at all. They charge a percentage of income, so once again it costs nothing up-front to try it.
So why not try to make the most of your rooms with the technological help available?
Measuring and keeping an eye on your performance is a key way to know how you are doing and make changes early if necessary. You can track your progress, as well as find out if software you are running (like RoomPriceGenie) is working. Knowing the ways in which your performance is fluctuating and understanding what is causing it, will allow you to make earlier, better-informed decisions about the way you run your hotel.
All of the world’s most successful businesses measure their performance and adjust their behaviour accordingly. Your hotel should be no different.
One word of warning – monitoring too much is not recommended. The constant disappointment of no new bookings tends to outweigh the fleeting joy of someone making a reservation. Checking numbers once a week is probably about right for a small hotel.
Okay, so this one isn’t software per say, but it does let you know if the software you are using is working and is crucial when it comes to revenue management.
Direct bookings are one of the most important things your website should encourage. When your customers book direct you are saving a huge amount on Online Travel Agent (OTA) commission and therefore directing more revenue back into your own business.Often people will go to an OTA website and, after choosing the hotel, go to the hotel’s homepage. The booking process must be as easy as possible and the offer at least as good as that on the OTA. The last thing you want is people leaving your website and choosing to book via an OTA.
There are various widgets that can help your website to drive direct bookings. One option, is a rate widget that can show any visitor to your website all the other room rates offered on various OTAs. This allows you to show that you are giving them the best price (given that you are – if you’re not, you should be) as well as allows you to monitor when an OTA is undercutting you. With peach of mind that they are in fact getting the best rate, direct bookings tend to increase.
There are various versions of this software such as TripTease but we recommend you shop around to find the best fit for your website.
Revenue management doesn’t have to be all numbers and headaches. With a few helpful tools you can manage your revenue flow and start maximising profit in no time.
If you have any questions don’t hesitate to contact us through the contact form. For more tips you can download our free book here. And don’t forget to sign up for a demo (and free trial) if you are in any way curious about how easy it is to improve your performance.
Best of luck.