3 Revenue Generating Ideas for Hotels in 2020
HotStats recently released its fourth-quarter research results and the news isn’t positive for the hotel industry. Hotels in the United States began Q4 with a 2.8 percent decline in gross operating profit per available room versus the same month last year. GOPPAR had been trending positive until October.
David Eisen, Director of Hotel Intelligence, Americas at HotStats says, “It’s too bad the momentum of the last two months couldn’t continue into October, especially as we move into the holiday season.”
Unfortunately, December is historically one of the slower months of the year in regard to demand, which translates into lower revenue and profit. Eisen says, “It’s coming into focus that for full-year 2019, profit growth could be flat to down, which should put hoteliers on alert.”
With hotels ‘on alert,’ many are beginning to plan for hungrier times. Here are three tips to increase revenue in 2020.
Make your emails work harder
When your marketing team is asked to produce more results with less budget, the best channel to use is email because you already have everything you need to succeed. Your CRM contains a treasure trove of opportunity just waiting to be set free. By segmenting your database and being thoughtful about your messages and offers, you can drive tremendous ROI. Here are some examples:
- If you’re not sending automated pre-arrival emails with upsell offers, you’re missing a huge opportunity. According to our data, pre-arrival emails get a global open rate of 60.53% and a CTR of 30.26%. As a result, they are the perfect vehicle to entice a guest, excited about an upcoming stay, to upgrade to a nicer room or purchase an amenity or service. Hotels using Revinate Marketing generate an average of $2500 a month in amenity upsells and room upgrades alone.
- Make sure that you’re sending your emails at the right time. Understanding trends around the booking window will help you optimize your promotions and drive more revenue. For example, with an average booking window of less than a week, it doesn’t make sense to promote holiday or seasonal specials too far in advance. (Good news for the procrastinators of the team!)
- Focus on loyal guests. It’s easier to sell to someone that knows and loves your brand than to bring a new customer through the door. Segment your audience by past visits and give the best, most heartfelt offers to guests who have spent a lot of time with you. Offer free upgrades plus a drink with the GM or a complimentary spa service to loyal guests who book during a particular time. Being treated like a VIP is a big incentive for many people.
- Encourage OTA guests to book direct with direct booking incentives. The amount of money that hotels give up to OTAs is staggering. Recapture some of that revenue by capturing contact information from every OTA guest that comes on-site and encouraging them to book direct next time. All you have to do is segment your database by past OTA guests and create a compelling message and offer to ensure these guests come to you directly the next time they visit.
Outplay your competitors on review sites
Online reputation continues to be a powerful booking driver for guests. Hotels that want to drive bookings need to continually receive new, positive reviews to outrank competitors. Revinate has a way to make it easy to pump up the review volume by turning your solicited post-stay feedback into reviews on TripAdvisor, Google or HolidayCheck in the DACH region. This syndication feature is so powerful that it’s common for Revinate Feedback customers to see a 409% increase in review volume.
Focus on employee happiness
It’s not a coincidence that some of the most profitable hotel brands, like Marriott, Hilton and Four Seasons regularly appear on the Fortune 100 Best Companies to Work For® list. Companies that focus on company culture are proven to have better business results.
According to researchers at Great Place to Work, “while the S&P 500 suffered a 35.5% decline in stock performance from 2007-2009, companies whose key employee groups had very positive experiences posted a remarkable 14.4% gain. And, those gains continued well past the recession as other competitors tried to catch up.”
The key employee groups mentioned include women, people of color, front-line workers, hourly male workers and long-tenured employees. These groups, common within hospitality companies, act as bellwethers for the organization for a number of reasons. Why?
Historically marginalized groups are often first to feel the effects of a business running into trouble—whether those impacts are wage cuts or the threat of layoffs. The employees play vital roles in a business in good times and bad. They often serve customers directly and are plugged into the reality of how the business is doing. And they are a source of good ideas that many companies overlook—whether those are ideas for cutting costs or generating revenue in new ways.
Hotels need to create positive experiences for these employees by encouraging inclusivity, innovation, fairness and integrity. An inclusive culture in critical areas enabled many organizations to soar over the recession chasm while others fell victim to the change in the economy.
To learn more about Revinate Feedback or Revinate Marketing, or to get more tips to drive your 2020 revenue, reach out to learn more.