Hotel marketing coach Neil Salerno offers sales and marketing experts five tips to filling rooms — and none of them involve lowering rates.
1. Add value
First, it's an old story, but stop thinking that lowering your rates will sell more rooms and increase room revenue. It may sell a few more rooms, but it rarely sells enough rooms to offset revenue lost due to lowered rates. It’s simple economics; lower rates have not ever, nor, will ever, create room demand. Travellers do not buy rate; they buy value. Don't reduce rates, add value.
Adding value is the key to increasing room sales. Creating and promoting special packages is a good way to accomplish this. Packaging allows you to mask actual room rates with features which add benefits to staying at your hotel. Don't forget to promote packages on your website.
The tell-tale sign of a 'hotel-in-trouble' is to see increases in occupancy and decreases in room revenue. Any hotelier, who understands and employs the tactics of revenue management, monitors and adjusts rates in reaction to fluctuations in current and future occupancy demand. Every hotel experiences fluctuations in demand all year long. Knowing when to adjusts rates up or down is a function of understanding demand.
For many hotel owners and managers, reducing rates is the lazy-man's form of marketing.It’s generally the first thought when sales are low; after-all, it takes very little thought and certainly very little research and/or effort. And it also ignores the fact that people don’t buy rate, they buy value. Simply lowering rates for everyone ignores the fact that most people are not seeking hotel rooms based upon rate alone. If that were true, the hotel with the lowest rates would be full all the time.
| Advertisement |
In a vacuum, rates mean little, but no hotel should operate in a vacuum. Low rates, when compared to your competition set, can also devalue your hotel. “You get what you pay for” is still alive and well; when a product is not known, its price will define its quality.
When sales demand is low, look to value-added marketing and position your hotel properly within your marketplace. If your hotel deserves to be in the number one position because of its location, facilities and amenities, make sure it is positioned that way.
2. Do your homework – stop working in a bubble
For a modest amount of money, you can start receiving market share reports from Smith Travel Research (STR). They are not available everywhere, but, if they‘re available in your area, they will provide a tremendous amount of insight into your local market status. It is far better than guessing or “counting cars” in your competition’s parking lot; that brings me back to the seventies, it didn’t work then either.
STR reports will provide you with accurate information comparing your occupancy, ADR, and RevPar with your stated competition. The fairness and accuracy of STR reports will assist you to place your hotel in its proper position among your competitors.
Search our database of more than 2,700 industry companies
