Hotel Revenue Trends: What’s Impacting Your Bottom Line?

In the past five years, New Zealand’s hoteliers and accommodation providers have enjoyed a robust increase in international visitor numbers—up almost 40%. Recently, however, Chris Roberts, the chief executive of Tourism Industry Aotearoa, cautioned that the days of double-digit growth are “well and truly over.” While this may sound alarming, there’s no need for panic just yet.

Despite a dip in visitor numbers, those who do arrive are still willing to spend, contributing over $40 billion annually to the economy. While international events and political changes can influence hotel revenue, several emerging trends can help you navigate these challenges and maintain your bottom line.

To keep your profit margins healthy, consider these five hospitality trends that could influence a successful hotel revenue management strategy for your business as you weather potential downturns:

1. The Rise of Next-Gen Travellers

Millennials have overtaken Boomers in population numbers, and by 2024, they are projected to account for nearly half of all business travel spending. While they tend to be more frugal with shopping, their eagerness for unique experiences means they are more likely to allocate their holiday budgets toward activities rather than material goods.

Tip: Integrate off-the-beaten-path or value-added activities into your hotel offerings. Opportunities for meaningful interactions with locals or visits to less commercialised attractions will appeal to their desire for purposeful travel. Consider partnerships with local businesses to offer these experiences, enhancing the value of their stay while boosting your revenue.

2. Connectivity is Key

Millennials and Gen Z are at the forefront of a growing demand for connectivity. Today’s travellers expect seamless access to the internet and digital services, no matter where they are in the world. This trend is transforming how they research, book, and pay for travel.

Tip: Ensure your hotel has a user-friendly online booking system that facilitates easy access to information. Investing in conveniences like mobile check-in and digital assistants (chatbots) can significantly enhance the customer experience. Chatbots can handle routine inquiries, freeing up your staff to focus on personalised, face-to-face interactions that elevate guest satisfaction.

3. A More Personal Touch

With the increased use of technology comes access to a wealth of data, which savvy hoteliers can leverage to enhance guest experiences. Today’s travellers expect a higher level of personalisation, and technology platforms provide the tools necessary to deliver it.

Tip: Use predictive personalisation to tailor experiences based on guests’ preferences and behaviours. By understanding your guests better, you can anticipate their needs and offer customised incentives, which fosters memorable experiences that lead to great recommendations and repeat business. This approach not only enhances guest satisfaction but also positively impacts your hotel revenue.

4. Total Revenue Optimisation

For many accommodation providers, revenue management extends beyond merely filling rooms. It’s essential to consider all profit centres in your business, including food and beverage services, ancillary revenue sources, and function spaces for conferences.

Tip: Implement a revenue management system (RMS) that supports dynamic pricing models. This allows you to maximise opportunities during peak times while optimising pricing for group bookings and other services. By identifying and promoting these diverse revenue streams, you can significantly enhance the lifetime value of your guests and mitigate the impact of seasonal fluctuations.

5. Embracing the Sharing Economy

The sharing economy has undeniably influenced traditional accommodation providers in New Zealand. Instead of viewing platforms like Airbnb as competitors, consider how they can inspire innovative approaches within your business.

Tip: Focus on highlighting the unique benefits your hotel offers that platforms cannot replicate. Emphasise aspects such as personalised service, local experiences, and community engagement. Create inviting social spaces, relaxed dining options, and co-working areas that encourage guest interaction, fostering a sense of belonging that can differentiate your property from shared accommodation options.

Adapting to Change

Successful accommodation providers are those who actively respond to changing market dynamics rather than passively allowing them to dictate revenue strategies. The hospitality industry is ever-evolving, and embracing change can open new avenues for growth and innovation.

Tip: Invest in revenue management solutions that provide insightful reporting and data analysis. By gaining a comprehensive understanding of your hotel’s performance and market trends, you can make informed decisions that drive profitability.

Conclusion

As you navigate the complexities of the current hospitality landscape, remember that your approach to revenue management will play a crucial role in sustaining your business. By understanding the trends impacting your bottom line and implementing the right strategies, you can continue to provide exceptional guest experiences while optimising your hotel revenue.

If you’d like to learn more about how Preno can assist you in making sense of your data and enhancing your revenue management strategy, get in touch for your free demo.