Revenue management is an important aspect of running any accommodation. It can be hard to know where to start, which is why we’re talking to Jody Sharratt at Rooms Online. We asked her why accommodation owners should care about revenue management, and what accommodation owners can do to improve their revenue management.
Why is revenue management important for accommodation owners?
Rooms Online (ROL): Accommodation operators have a finite revenue earning potential, and once a room is sold, or the property is full for the night, they’ve reached the maximum for that day.
Simply increasing rates because it’s traditionally a high season, or lowering them because it’s a low season isn’t necessarily going to ensure you’re maximising the potential revenue. Accommodation providers need to look at what’s happening in town, look at forward bookings, think about what traditionally happens at the particular time of year and make a strategic plan.
1. Consider booking trends and use historical data to make sound decisions
2. Invest time to plan ahead and continually monitor your room inventory
3. Leverage your most successful booking channels
What are some common mistakes you see with accommodation owners and their revenue management?
ROL: Accommodation providers tend to stick to what they’ve always done when it comes to rate setting, and this is generally whatever the previous owners of the property have done, or what competitors are doing. Often they’ll only look a few weeks ahead, but they should be looking months into the future and planning, things happen quickly and you want the best rate at the right time, every time.
They often worry too much about what their competitors are up to – which leads to price wars.
In peak demand, properties often think that if they’re full and the ‘No Vacancy’ sign is up that they’re doing well. Our questioning in this scenario is;
Is the goal to fill to 100% occupancy, or get the best possible overall room revenue and ultimately make more money?
Have they maximised the opportunity and achieved the best possible average daily rate, or did they perhaps fill too easily.
Tell us a bit about Rooms Online:
ROL: With 12 years’ hotel reservations/revenue management experience, Jody came up with the idea for Rooms Online during her 5 years working for an OTA. She realised small accommodation operators were often new to the industry and they often felt ‘alone’. They had no neutral adviser they could turn to for advice on pricing, promotions, or communications. They also had very little time to do everything.
Thanks Rooms Online for the insight into revenue management. If your accommodation needs help with your revenue management, the team at Rooms Online are the experts!