Horizon Hospitality Associates, Inc’s Post

U.S. hotel industry profitability trends in 2023 provide a yardstick for predicting revenue metrics this year. Total industry revenues and profits were well beyond 2019 as pricing power outweighed the impact of weakening demand. Read on. #hotelindustry #hospitality

RevPAR growth in the U.S. has normalized, but hotel loyalty programs are boosting occupancy and revenues. While loyalty costs have risen, the increased guest loyalty is expected to offset these expenses. Read more here ⤵ #HotelIndustry #LoyaltyPrograms #RevPAR

This article talks a lot about critical hospitality metrics — ADR, RevPAR, Occupancy. But beyond these numbers, are you keeping an eye on your revenue capture? 👀 Simply put, revenue capture is the portion of a guest's payment that remains with the hotel. This figure can be a game-changer for your bottom line. 💵 I've observed numerous hotels that may not top the STR report yet excel in maximizing revenue contributions to their bottom line — and isn't that the essence of running a successful business? 📈 Interested in exploring how slight adjustments in revenue capture can significantly enhance your asset values? Let's connect and discuss how to make your numbers work harder for you. 🤝 #Hospitality #Hotels #HotelData

3 ways to achieve high occupancy rates Maintaining a good occupancy rate is a great way to ensure you’re meeting your financial goals, so here are three ways to go about it: 1. Alter your pricing strategy In the hotel industry, pricing is everything. If you want to rent out real estate, you need to make it an attractive proposition for the customer. Sure, complimentary breakfasts and apps for easy booking can help secure reservations, but to see an improvement in your overall occupancy rate you need to first consider your pricing model. Dynamic pricing - This type of pricing strategy involves adjusting room prices according to local market conditions and competitor hotels in your area. For example, if there’s a local event bringing a lot of people in town, you could charge higher rates knowing that you’ll still fill your rooms. Value-added pricing - With value-added pricing, you hike up your rates due to additional services you offer that your competitors don’t. For example, your hotel room rate is P2,750 because you offer free breakfast, toiletries, and other extras that the P1,650 hotel room listed by your competitor doesn’t. Price per segment pricing - To incentivize guests to book with your hotel, you can offer lower rates for specified stay durations or the number of rooms booked. 2. Adjust your stay restrictions The average length of stay in your hotel can affect your overall occupancy rate. If you have available space in your accommodation, one way to fill it would be to employ stay restrictions. For example, if you anticipate a lot of guests will stay at your hotel during a holiday weekend, you can impose a three-night stay minimum for that time period. This will ensure that you give priority to guests who want to stay through Sunday night instead of those who only planned to book a 1-2 night stay. 3. Avoid overselling Overselling, or overbooking, is a tactic commonly used by large hotel chains in the hospitality industry to boost occupancy. The tactic is based on the presumption that there will be cancellations or no-shows. However, it can be a risky move, since you could end up in a situation where you have disgruntled would-be guests on your doorstep with no room to sleep in. For overselling to work, you have to be sure to have an overbooking strategy in place.

#revenuemanagement 💡 🔷 How Does Hotel Overbooking Impact Your Revenue? #Overbooking is a common practice in the hotel industry, strategically employed to secure maximum occupancy and guarantee the sell-out of rooms. While this approach holds undeniable benefits for hoteliers, there are also downsides to it, such as dissatisfied guests in case you get double bookings or missed revenue #opportunities from free room upgrades Overbooking isn’t as counterintuitive as it sounds. Taking a proactive approach to smart revenue management means considering multiple factors that could impact your hotel’s revenue. Below, you will find four primary reasons why hotels find it necessary to overlook: ◼ Prevent Lost Revenue from Cancellations Overbooking is often implemented to mitigate the risk of lost revenue resulting from #cancellations. By intentionally booking more rooms than the hotel physically possesses, hotels aim to strike a balance between maximizing occupancy and accommodating potential cancellations. ◼ Ensure Competitive Pricing Another rationale behind overbooking is to maintain #competitivepricing within the hospitality industry. Overbooking lets you create a buffer to account for potential cancellations and fluctuations in demand. This way, you avoid inflating room rates to cover potential revenue losses from cancellations and no-shows, keeping your room prices attractive to potential guests. ◼ Achieve 100% Occupancy With an overbooking strategy in place, it’s, in fact, possible to boast 100% #occupancy . Overbooking allows you to compensate for potential vacant rooms, ensuring that every room is utilised. While it involves managing the risk of accommodating more guests than the actual room count, the objective is to maximize revenue and operational efficiency by minimizing instances of unoccupied rooms and achieving full occupancy whenever possible. ◼ Meet Revenue Targets As a hotel, you have revenue targets to meet, and overbooking can help you achieve these goals. By selling more rooms than available and accurately managing cancellations, hotels can come closer to their revenue objectives. The overbooking strategy helps you ensure that your hotel is better positioned to reach or exceed its #revenuetargets by minimizing the impact of unforeseen vacancies. 🔷 What Are the Downsides of Overbooking? While overbookings are instrumental for ensuring high occupancy and getting you closer to reaching your #financialgoals , this practice isn’t perfect. Here’s what you need to be on the lookout for when implementing it:  ◾ Loss of revenue  ◾ Operational Challenges  ◾ Guest Disruption  ◾ Loss of Customer Loyalty 🔷 How to Manage Overbookings Effectively and Turn Them Into Revenue Opportunities ◆ Use Data to Forecast Cancellations and No-Shows ◆ Train Your Staff to Upsell ◆ Make Sure Your Front Desk Team Knows How to Deal with Overbookings ( Late arrival, Departure time for the next day, and the possibility of doubling up ) #profitmaximization

Are you properly utilizing your hotel competitor set to make strategic business decisions? Let's dive into why a deep understanding of your hotel competitor set is crucial for the continued success of your property. Your property's compset identifies who your competitors are, and what they offer. By discovering and analyzing this data, you can understand how consumers compare hotel operations and choose where to stay based on this information. At the end of the day, consumers are looking for the best value and guest experience for their money and will analyze all of a property's offerings to make that decision. By understanding your hotel compset, you can properly position and market yourself based on the competitive edge you have over those in your market. We dive deeper into the key factors that you should consider when building your compset, how to use your compset effectively, and other benefits the compset can provide your business in a recent post. Check out our full analysis at the link below. https://bit.ly/3JXTztU #hoteltech #hoteltechnology #hotelier #groupsales #hotelstrategy #hotelgroup #hotelindustry #hospitality

#How #Is #Hotel #Revenue #Calculated? To calculate your hotel revenue, you need to measure certain KPIs (Key Performance Indicators). Here are the most important KPI formulas used in hotel industry for effective revenue management. most important rev management formulas ADR (Average Daily Rate) ADR is a KPI that shows your hotel’s average revenue per occupied room per day. As it doesn’t include empty rooms, you can use it to compare hotel performance and revenue to previous periods, thus forecasting seasonal trends better. ADR Formula ADR = Room Revenue / Number of Sold Rooms Example: If you’ve generated $10,000 room revenue with 20 rooms booked in a day, your ADR would be $500. Total Room Revenue Total room revenue is a KPI that shows how much revenue your hotel generates for all occupied rooms in a certain measured period. It’s a necessary performance metric for calculating your RevPAR and GOPPAR. Total Room Revenue Formula Total Room Revenue = Number of Sold Rooms * ADR Example: If you have sold 45 rooms at an ADR of $400, your total room revenue would be $18,000. If your hotel has 30 available rooms, your RevPAR would then be $600. RevPAR (Revenue per Available Room) RevPAR takes all your rooms into consideration to help you determine the performance of your ADR and occupancy rate. You can use it to see how well your hotel is performing during a certain period (day, week, month, or year), which makes it one of the key metrics for measuring profitability. RevPAR Formula RevPAR = Total Room Revenue / Number of Available Rooms or RevPAR = ADR * Occupancy Rate Example: If your hotel has an ADR of $500 and an occupancy rate of 60%, your RevPAR would be $30,000. RevPAR vs. ADR ADR doesn’t take empty rooms into consideration, while RevPAR does. ADR shows how much revenue your every booked room is generating on average, while RevPAR shows your revenue for all rooms. That’s why RevPAR is a more important KPI to measure. A high RevPAR means a high occupancy rate, or a high ADR (or both), which means better hotel performance and profitability. GOPPAR (Gross Operating Profit per Available Room) GOPPAR represents the revenue that’s left after handling various expenses, such as monthly bills, salaries, insurance, and taxes. As it excludes operational costs, it’s a better KPI than RevPAR. You can use it to gain insights into your overall revenue and performance, as well as identify the most revenue-generating parts of your property. GOPPAR Formula GOPPAR = Gross Operating Profit (GOP) / Number of Available Rooms Gross Operating Profit = Total Room Revenue - Gross Operating Expenses Example: If your total room revenue is $50,000 and your gross operating expenses are $15,000, you would need to divide the GOP of $35,000 with 20 available rooms, for instance. Your GOPPAR would be $1,750. share with all & follower for more information

Here's six easy tips to generate more revenue for your hotel. Upselling popular amenities like early check-in/late check-out and managing inventory with segmentation are just a few of the ways you can fine-tune your revenue management strategy. Check out this blog for tips on strengthening your revenue management system and how IDeaS Revenue Solutions could help. #RevenueManagement #HotelManagement #Hospitality

#revenuemanagement #pricingstrategy 💡 🔹 What are the most effective types of hotel pricing strategies? There is no one-size-fits-all hotel revenue management strategy that will work for every property. Instead, you can utilize a combination of different strategies depending on your local market’s trends, yield #goals, historical data, and targeted demographic. ◼ Open pricing Open pricing is an ideal option for hotels operating independently. Essentially, open pricing involves setting rates for #distribution channels, room types, and dates that are independent of each other. This luxury of choice allows hotels to forecast more accurately. ◼ Value-added pricing With this pricing strategy, you can set a higher rate than your competitor’s pricing because you’ll be offering additional services in the basic package (i.e., organic soaps/shampoos or other #package inclusions). The extra perks can be services or items.   ◼ Discount pricing This approach is used to boost occupancy during off-seasons by dropping base rates. Although you will be dropping your base rates with discount codes for the lean season, hotel revenue can be made up through #upselling or cross-selling. ◼ Price per segment pricing This strategy involves offering the same product at different prices depending on the different types of #customers. With price-per-segment pricing, your rates can be lower if the guest commits to either booking a certain number of rooms or a specific length of stay. ◼ Length of stay pricing This strategy consists of adjusting your pricing based on the length of the stay. You can implement a rule where guests who stay a minimum number of days will receive a discount. A promotion like this helps you increase occupancy rates on slow nights and increase occupancy during periods with low #demand. ◼ Positional pricing This is a strategy where your price is based on your brand’s strength, position in the market, and reputation. Positional pricing makes it essential to assess and choose your brand’s #market position wisely. ◼ Dynamic pricing A dynamic pricing strategy will rely on market demand and fluctuations to set the optimal price. It’s often used to charge a higher #price during high demand. Generally, a hotel room rate is increased when demand exceeds supply to capitalize on ADR and lowered when demand is weak to increase occupancy. ◼ Penetration pricing One of the hotel industry pricing strategies used during the initial offering period. These initial lower prices allow you to penetrate the market and attract customers away from your #competitors. 🔹 Considerations when developing your hotel’s pricing strategy The first step to creating successful pricing strategies in the hotel industry is to understand the market and meet its demands. You also need to be aware of your guest segments and their needs and expectations. ◾ Property Location ◾ Target Market ◾ Level of competition ◾ Property Size ◾ Services offered ◾ Upsell opportunities

Boost your hotel's success through strategic pricing ✨ Hotel room rates are pivotal decisions that impact final income. In today's competitive landscape, wise pricing choices are essential for increased occupancy and revenue. Diversify pricing options to give guests flexibility in choosing the ideal room. Explore our latest article for insights into pricing strategies, their significance, and how Rentlio can optimize your rate strategy. Read more on our blog 🔗 #rentlio #hospitality #hoteltech #rentliopro