Look beyond filling beds to measure success
It’s important to focus on revenue results, not just occupancy.
Regardless of whether winter is your peak or quiet season, it’s important to be thinking ahead and how to measure the success of your strategy. Previously, many operators have used occupancy figures as their measurement of success.
Having your ‘No Vacancy’ sign up is not always worth celebrating and as a savvy operator will know, using the revenue results will give a true reflection of how well the business is actually performing.
If your strategy during quiet months has typically been to discount rates to get occupancy, we encourage you to reconsider if this is a sustainable and innovative way to do business?
Read the below outcomes from three similar properties and see the results achieved by using different strategies in the same market;
Let’s take a look at how these hotels achieved different results in the same market.
Hotel A was very occupancy focused and dropped room rates in order to get occupancy. Revenue results show that Hotel A sells inventory too easily at a lower rate than what could otherwise be achieved.
Hotel B was too rate focused and not in tune with demand. The rate is too high for the market booking lead time and the property has priced themselves out of the market. The revenue and occupancy results have both suffered.
Hotel C is the dream result and shows effective yield management. By shifting the measurement of success from occupancy to forward-planning and revenue, this property not only increased the average daily rate, but has also increased revenue and lowered costs.
