What is hotel revenue?

Hotel revenue is the income your business earns from selling rooms or other products and services to guests. While revenue is mostly generated from selling your rooms, you can also collect revenue from your amenities such as a bar, restaurant, gym, or spa. You can also sell local products or run classes to give your revenue a boost.

This blog will give you all the best ideas on how to increase revenue at your hotel.

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Strategies to increase hotel revenue

There are a lot of strategies that can be used to increase hotel revenue – but it’s important to be focused and committed to the plans you make.

Some strategies you could apply include:

  • Optimising revenue management and price your rooms to your advantage
  • Endeavouring to boost your occupancy rates
  • Focusing on enticing guests to make additional purchases on their booking
  • Creating a number of ancillary revenue streams
  • Enhancing your reputation and recognition
  • Cutting down on costs to save money
  • Incentivising guests to lengthen their stay

And more! So let’s look at some of the best ways you can make the above strategies work…

15 best ways to increase hotel revenue

1. Drive direct bookings

Direct bookings mean you don’t have to pay commission fees to an online travel agent, saving you up to 20% on each booking. Of course, you must maintain rate parity (the same rate on your website as on the OTA) but try making booking direct a more attractive method by offering guests value-added services. 

For example, they could get a free bottle of wine when they book directly via your website. You can use a tactic known as the Billboard Effect to link your website to your OTA profiles, convincing guests to check you out.

2. Connect additional channels

If you find on some days or weeks your occupancy is lower than you’d like, and not enough revenue is coming in as a result, you may not be reaching a big enough audience. If you connect to five or more OTAs, you dramatically increase your ability to sell all your rooms at all times. 

Booking.com, Expedia, and Airbnb will cover most bases but there are others that cater to particular types of channels – such as luxury travel provider Mr and Mrs Smith.

The best part is that if you use a channel manager, connecting extra channels doesn’t take any extra time or effort.

3. Price your rooms accurately and competitively

It’s important to keep an eye on competitors or similar properties to see what they are charging and how successful they are. You may find you are pricing your rooms lower than what guests are willing to pay. 

It’s also important to be dynamic with your pricing – don’t set and forget. At different times of the week, month, or year, you’ll have opportunities to earn more than your ‘standard’ rate delivers.

4. Target the right market

If you know that your property is more popular with older travellers, or couples, or families, make it a focal point on your website and in the various ways you market your hotel. It also pays to be honest, since guests who get what they expected and are satisfied are more likely to leave positive reviews. Which brings us to the next tip…

5. Encourage reviews and respond to feedback

The more positive reviews your property has the more likely it is to be booked and it also helps you secure loyal customers who will come back in the future. It’s also important to respond to reviews, positive and negative, so guests can see you are genuine and take their experience seriously.

6. Use extended stays

Guests who are looking to stay for longer than 7 to 14 days would be considered extended stay guests, and their needs are different from those of traditional leisure travellers. Extended stay guests may require extra services, such as laundry services and high-end housekeeping services. In addition, they may also be looking for small hotels that offer premier amenities, such as common rooms, fitness centres and outdoor living spaces.

You can market specific products and amenities to extended stay guests to motivate them to book with you.

7. Be a good host

Customer needs are constantly changing and to keep your service five star you will need to keep up with industry trends.   After all, this is an industry that relies on word of mouth and social media recommendations so you need to keep on top of expectations to ensure you keep your reviewers raving!

First impressions mean everything so don’t be afraid to surprise guests with small gifts on arrival, baked goods are always a favourite.

8. Optimise your online presence

Anywhere your property can be found is a chance to win guests over and convince them to book with you. You should treat every online listing with as much authenticity as your own website. This includes your profiles on OTAs, TripAdvisor, Google, and your social media pages. Make sure your details are accurate and up-to-date.

9. Up-sell at every opportunity

Persuade your hotel guests to spend a little more through by adding carefully thought-out extras such as a romantic package or champagne breakfast. You could also consider asking a guest during check-in if they would like to get a better room for a slightly higher rate. This is simply about letting your guests know what options are available to them. If it’s out of sight, it’s out of mind!

Use your front desk or other designated areas to take advantage of point-of-sale opportunities such as car rental or tickets to events and tours. Adding this extra value to guests not only brings in revenue but also provides a better traveller experience.

10. Audit your hotel

Wherever you can save money is the same as making money. Assess things like how much you’re spending on energy, supplies, or water to see if you make changes. Sometimes all it takes is switching the type of light globe you use in your rooms and hallways to save money.

11. Sell perks or ancillaries

Instead of closing the door on special requests, put aside some options that you can charge extra money for. A good example is early check-in or late check-out.

Ancillaries such as the soap in your bathrooms or the actual bathrobes can be a way to make money off your in-house supplies – especially if you buy them in bulk.

12. Communicate pre-arrival

Keep in touch with your guests pre-stay via email to build their anticipation and ensure you can find ways to personalise their service when they arrive. It’s also an opportunity to offer them a room upgrade, for an extra fee. They may be enticed once they see what’s on offer.

13. Use promotions

Promotions are a great way to boost business in slow periods or take advantage of events and special occasions. For example, you could offer promotions based on the season, in celebration of a national holiday, or based around a big sporting or cultural event.

14. Increase the popularity of your food and beverage offers

Offer deals including set menus for breakfast or dinner. You can also upsell food and beverage offers or create them as part of a package. Take note of what items are most popular and replace the items that aren’t selling with exciting limited time alternatives to drum up interest.

15. Partner with other local businesses

Local businesses can always find ways to mutually benefit each other. Maybe there’s a local exercise instructor or artist that wants a space to run classes. Or a local theatre that needs to reach a larger audience. Selling tickets and taking a cut can put a little more cash in your pocket.

How to increase hotel revenue using technology

Hotel technology makes it much easier for modern accommodation providers to increase revenue effectively.

Technology solutions are able to:

  • Automate manual processes to save time and effort
  • Create a central hub for property management, instead of multiple systems or spreadsheets
  • Collect large amounts of data; make it accessible, and make it easy to analyse
  • Make it easier to communicate with guests and understand their needs
  • Allow hoteliers to get paid quickly and easily

Technology is the solution that brings your property online and gives you more control of your hotel business – through connection, automation, and efficiency.

For example, you can use revenue management technology to track market conditions in real-time. This includes visibility on how your rate is displayed on every channel (including your own website), competitor rates, and changes in demand.

With this information readily available at speed, you can make instant decisions about how to optimise your room pricing for maximum revenue.

By Dean Elphick

Dean is the Senior Content Marketing Specialist of Little Hotelier, the all-in-one software solution purpose-built to make the lives of small accommodation providers easier. Dean has made writing and creating content his passion for the entirety of his professional life, which includes more than six years at Little Hotelier. Through content, Dean aims to provide education, inspiration, assistance, and, ultimately, value for small accommodation businesses looking to improve the way they run their operations (and live their life).