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Melissa Kalan's top commercial strategies for accommodation properties in a competitive market

Accommodation properties operate in a highly competitive industry, and it’s essential for these businesses to maximise their revenue and profitability to thrive and improve asset value.

To achieve this goal, they need to adopt effective strategies that can help them increase their top-line revenue while managing costs. In this article, we’ll discuss some commercial strategies that properties should focus on to maximise their revenue and profitability.

  1. Pricing Strategy: The first and most important strategy for maximising revenue is the pricing strategy. Accommodation properties should regularly evaluate their pricing structure and adjust it based on demand and seasonality. Implementing dynamic pricing strategies can help properties adjust their prices based on demand and occupancy rates. A well-designed pricing strategy also helps to increase revenue per available room (RevPAR) and occupancy rates.
  2. Marketing and Sales Strategy: A robust marketing and sales strategy can help properties increase their visibility and attract more guests. Properties can use a combination of digital marketing techniques, including SEO, social media marketing, and email marketing, to reach their target audience. They can also work with travel agents and a range of booking channels to increase their online presence and reach a wider audience. Costs of acquisition across all distribution channels and return on investment of all marketing campaigns must be measured and monitored.
  3. Customer Experience: Providing an exceptional customer experience across all touchpoints is crucial for attracting and retaining guests. Accommodation properties can invest in customer service training for their staff, focus on personalised guest experiences and offers, and analyse customer feedback and reviews to improve their guests’ experience. Customer reviews are powerful and influence property value perception which impacts your pricing.
  4. Revenue Management: Revenue management strategies involve optimising revenue streams by managing inventory availability, room rates and occupancy levels in real-time for all market segments across a range of distribution channels. Properties can implement techniques such as upselling and attribute-based selling to maximise customer spend. Allowing customers to curate their stay based on their needs and wants also enhances their experience and perceived value. Automated forecasting solutions that predict demand, draw on a broad range of data sources, and have the capability to re-forecast multiple times a day to adjust pricing are beneficial for your best chance of success.
  5. Cost Management: While increasing revenue is important, managing costs is equally essential. Accommodation operators should regularly evaluate their costs and identify areas where they can reduce expenses. This can include implementing energy-efficient systems, reducing food and beverage costs, and outsourcing non-core activities.
  6. Diversification: Diversifying revenue streams can also help increase revenue and profitability. Accommodation properties can generate additional revenue by offering additional services such as spa, golf courses, or conference facilities. Adding services can also help to differentiate a property from its competitors.
AdobeStock By Sergey Nivens

Emerging trends are:

  1. Sustainability: This is a growing trend in the hospitality industry. Guests are becoming increasingly conscious of their environmental impact and are seeking sustainable options. Properties can reduce their carbon footprint by implementing sustainable practices like energy-efficient systems, recycling programs, and sourcing local products. Those that embrace sustainability can differentiate themselves from competitors and appeal to eco-conscious guests.
  2. Technology: Properties can use technology to improve the guest experience, streamline operations and increase revenue. Mobile check-in and keyless entry can enhance the guest experience, while data analytics and artificial intelligence can help operators better understand their guests and predict their needs. Technology also improves your commercial capabilities.

Accommodation operators must continuously evaluate and adjust their revenue and profit-generating levers to stay competitive in the ever-changing market and this requires a combination of strategies.

Additionally, emerging trends like sustainability and technology, including artificial intelligence will impact the hospitality industry and require properties to adapt to stay competitive. By embracing these trends and leveraging revenue-generating levers, properties can remain profitable and sustainable.

Melissa Kalan Australian Revenue Management Association will be a Speaker at the Maximum Occupancy Conference.

Tickets are on sale HERE! 

Event Details:

Where: Sydney, Australia

When: June 6-7 2023

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