Some years ago, I was checking-in to one of the leading four-star hotels in central Oslo. The room was comfortable but a new television was mounted on the wall over the writing desk, making it impossible to sit there and work. I went down to reception and they moved me into a new room without any discussion – problem solved and I was a happier guest.
About a year later I was checking in to the same hotel. Recalling my previous stay and knowing that I needed to work in the evening, I asked if there would be an accessible desk in my room. The front desk representative did not have any information regarding the writing desks in the different rooms. She went on to assure me that if the room wasn’t to my satisfaction I could come down and request a different room.
I’m not criticising the guest-facing staff member in this scenario. She was most kind and helpful – to the extent of her knowledge. But let’s consider how much more empowered she would have been to meet my needs if armed with better knowledge about her product.
Pitfalls of overlooking the basics
Much of the discussion and buzz in the hospitality industry stresses “look at the market” and “follow what the competitors are doing” to the degree that many hotel executives seem to lose sight of the product they are selling – hotel rooms.
A critical starting point is to thoroughly examine the set-up of your property management system to ensure that your room types and room description accurately reflect the distinctions between each room type. You want to make sure you’re highlighting the distinguishing features, like in my example – the size of the workspace. In my experience, many hotels put too little effort in this part of building out the set-up of their hotel in the property management system.
Understanding Revenue Management requires knowing your product and identifying differentiators that are of interest to different kinds of guest. Room features which could be a disadvantage for a business traveller could be an advantage when sold to a leisure traveller. When conducting this exercise, don’t overlook any specialised room features that most people are attracted to and willing to pay for:
Atmosphere – a fireplace is always attractive, even if it’s not working.
View – guests are willing to pay more just to look at water.
Access – a balcony, even a small one, is a feature that dependably commands a higher rate.
If the front-desk employee in my example above could access accurate and detailed room descriptions, she could have professionally answered my question and gained the opportunity to capture incremental revenue at the same time. “For a special rate of ten additional euros per night, I can upgrade you to one of our executive rooms. They are more spacious and have a larger working desk”. I was a prime candidate for this type of up-sell since I had specified exactly what I wanted.
Another key consideration in implementing your revenue management strategy is to examine the financial configuration of your hotel system and understanding the effect this will have on reporting and analysing your data in the months and years to come. You should regard this configuration as the foundation for measuring the success of your revenue strategy.
One of the first questions that comes up when I’m discussing a system upgrade with a client often is, “can we bring over our current set-up and all reservations”? I advise that the existing set-up is the one thing you should never implement in a new solution. It’s like buying a new car and installing the old engine. The existing set-up is often the result of principles that were used in a different context. For example, was the guest mix the same as it is currently? Were the distribution preferences the same? Typically, the answer to these questions is no.
It’s also important to consider the ideal business mix for your property. That’s not to say you should solely focus on the guest mix you want – but genuinely give some critical thought to the type of guests that are best suited to your hotel experience, and then build the right buckets for what you want to measure. As an industry colleague of mine, Hanna Lak, a Revenue Management Consultant in Finland, so cleverly put it: “You get what you measure”. This is a very true statement when it comes to revenue management.
Leveraging social media, “story selling” and in-person service to drive incremental revenue
In our current era of social media “story selling”, a specific story and name associated with specific rooms can also be used to create a rate differentiation to your advantage. For example, here in Stockholm we have at least two hotels using Greta Garbo in their storytelling and naming suites and restaurants after her. You can easily create a story for your hotel by considering noteworthy locations, events, or personas that are unique to your geography.
Let’s not overlook the importance of following-up on guest reviews in social media. These direct communication channels allow you to understand what the guests love in the hotel, as well as where expectations were not met. You may be surprised to learn that it’s not always what you may assume. Many hotels are making great strides in this area, but for many others, social media is something to engage in during downtime. The hotels who are most effectively leveraging the social channels make it a priority. And today’s engaged consumer expects to see this interaction when researching their stay, and when making recommendations to friends and colleagues.
In conclusion, one of the most valuable assets a hotel can leverage for successful revenue management is a well-staffed hotel. Personal check-in service offers unmatched opportunities to deliver the little extras to the guest’s experience and to your bottom line, either through incremental revenue on reservations or perhaps a better review at Trip Advisor. While check-in kiosks and apps have their advantages, nothing yet replicates an attentive check-in staff.
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