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November 5, 2013 / BSP Marketing

30 Ways Hotels Can Increase Revenues, Decrease Costs and Boost Booking

Increase Revenues and ADRRunning a successful hotel is an ongoing challenge that requires the combined forces of both management and staff. Policies must be in place to make sure that daily operations run smoothly and all hotel guests are treated well. It is fair to say that the primary goal of almost every owner and operator of a hotel is to make as big a profit as possible. To achieve such a goal the focus needs to be on both revenues and costs. Hotels can boost their bottom line by increasing revenues or decreasing costs.

Ideally, you want to increase your top line (sales) and decrease your expenses (variable and sometimes fixed costs) to get the biggest increase in your hotel’s bottom line. When a hotel’s occupancy rates and RevPAR rise, it is usually a good indication that management is executing well. Following are 30 ways that hotels can do better and boost their bottom line.

1. Invest in a more efficient HVAC system

You never want to tell a guest that they can not keep their room as cool as they like because you are try trying to conserve energy. Since hotels often spend more than 50 percent of their operational budget on air conditioning and heat, the best way to cut those costs is to invest in a highly efficient HVAC system that uses less energy and fewer kilowatts to cool and heat a room.

2. Differentiate your hotel from your competitors

Give your guests a reason to choose your hotel over a hotel two blocks or two miles away. You can differentiate your hotel from your competitors on the basis of price, policy and service. Offering free HBO or a 3:00 pm checkout are just a few possibilities. While you do not want to get into a losing battle by dropping your room rates 25 percent below your competitor’s rates, you can have a policy where you are always at or near the lowest rate in town.

3. Make your employees happy

In the hotel industry or any service-oriented industry, it is particularly important that your employees project a friendly and outgoing attitude toward the customer. If you make your employees happy by paying them fairly and recognizing them for their achievements, there is no doubt that they will want to be good ambassadors for your hotel. When your employees go above-and-beyond their official duties to help out a guest that creates tremendous goodwill and can lead to repeat visits and recommendations.

4. Make your guests feel at home

Whether your guests are just staying for one night or for two weeks, you should always do your best to make them feel like your hotel is their home away from home. Soften the decor by adding comfortable furniture, flowers and pictures on the wall. Having a lobby and a breakfast area with comfortable seating areas makes your hotel feel more like a home and less like a sterile hospital room or nondescript office. When your hotel is warm and welcoming, people want to come back.

5. Develop incremental revenue sources

Don’t be overly aggressive but do try to gently persuade your hotel guests to spend a little more. You might ask a guest who is checking-in if he or she would like to get the Junior Suite overlooking the pool for just $20 more than the standard room they booked.

6. Sell hotel branded products

We all know that hotel guests like to help themselves to the little soaps and shampoos that come with the room and that some will “accidentally” pack a couple of towels in their bags before they check-out and head back home. You can add a new revenue stream by making available for purchase branded hotel products like towels, linens and shampoos.

7. Interact with hotel guests personally

Guest will take notice when the person at the front desk calls them by their name. If the manager takes the time to walk around the breakfast area and asks you how you are enjoying your stay, it makes a difference. It shows that you are important and not just another face in the crowd.

8. Be creative, proactive and productive

You do not have to always go by the book. If a guest has an unusual problem, be creative to find a good solution. If you see something not quite right, be proactive and fix it before it leads to a complaint. Whether it is engaging a customer or sweeping the floor, a productive employee will help the hotel function more efficiently.

9. Switch from incandescent to LED lighting

Switching to LED lighting, which is almost 10 times more efficient than incandescent lighting can, in the long-run, save your hotel thousands and thousands of dollars in higher electric bills and the cost of buying and replacing burnt out light bulbs. Investigate all of your lighting options and see which ones work best for you and your hotel.

10. Offer guests an in-room holiday tree

During the holidays, many guests would love to have a small holiday tree in their guest room. You can charge extra for special holiday rooms with fully decorated trees or you might offer guests a chance to buy ornaments to decorate their tree. When guests leave, they can take home the ornaments as mementos of their stay.

11. Market directly to the hotel guest

The personal touch is always a good way to reach out to past guests and encourage them to stay with you again. Today, social media sites, smartphones and many other types of technology, make it easy to talk to your past and future guests.

12. Take advantage of point-of-sale opportunities

Use your front desk or other designated area to take advantage of point-of-sale opportunities. You can do things like sell tickets to attractions, rent cars or even sell key chains and letter openers.

13. Focus on perceived value

Guests are usually willing to pay more if they feel like they are getting more value. Actual value is not as important as perceived value. If a guest feels like the “extra” you are offering is worth $20 and it only actually costs you $5, then that is a win-win scenario you can not b

Ways to boost hotels sales14. Focus on customer satisfaction

The customer is always right is not just a catchy phrase, but also, one of the most fundamental rules of the hotel business. If your guests are satisfied, it will pay positive dividends. On the other hand, if you upset a guest, that will come back to haunt you with negative posts on hotel review sites and the loss of a paying customer.

15. Do an OTA audit

It is easy to get caught up in the OTA trap. Online travel agencies can send business your way, but they also charge a commission and you usually have to sell those rooms at a discount to the customer. In certain situations, using an OTA to increase occupancy works well, but to know how much, or little, it is adding to your bottom line, you should regularly audit your OTA sales and expenses.

16. Do an energy audit

In a similar vein, doing an energy audit can identify areas where you are overspending. Check everything that uses electricity, gas or other fuel. You will see where you are spending the most money and can make adjustments to lower your overall expenses.

17. Host business and private functions

If you have the space, put more emphasis on using it to host business gatherings, reunions or other social events. You can do everything from holding a training session in a conference room to being the venue for a wedding on the grounds of your hotel.

18. Focus your marketing on your most important customers

Statistics show that 20 percent of a hotels customers account for 80 percent of their revenues. If you have large corporate customers or do a lot of business with a travel agency, it makes sense to give more direct attention in your marketing campaign to those very important customers.

19. Encourage guests to refer new customers

When you have satisfied guests, they can be a great source for new customers. Encourage them to refer friends and family to stay at your hotel by giving them various incentives like a room discount on a future stay, free dinner, or perhaps, a gift card.

20. Make a few rooms pet friendly

Many travelers would love to take their pet along with them when they travel. If you make your hotel pet-friendly, you not only can attract a different segment of traveler, but you can also charge more for your rooms.

21. Offer discounts for extended stays

Some people are flexible with their travel schedule and might want to stay an extra night. If you offer them 50 percent off on the third night when they pay the regular rate for the first two nights, many will take the offer and you will generate incremental revenue.

22. Network with other nearby businesses

Networking with other area businesses that tend to attract travelers and tourists (amusement parks, museums, restaurants…) increases revenue for the hotel and the business partner, and at the same time, benefits the customer. A hotel could offer discounted tickets to local attractions that benefit current hotel guests. Business can be driven to the hotel if the hotel offers a special rate for anyone who books a room and shows a ticket or receipt from the hotel’s networking partner.

23. Try to rise on the hotel rating scale

You might be surprised how big a difference it can make if your hotel goes from a 2-star rating to a 3-star rating in a popular hotel rating service. If you achieve a higher star level, more people will want to stay at your hotel and you probably can raise your daily room rates based on your higher ranking.

24. Start a Honeymoon Bridal Registry

A unique way to increase your revenue is to make it possible for honeymoon couples to enhance their stay at your hotel. Wedding guests can buy the couple those desirable extras like spa treatments, a round of golf or dinner at your hotel’s restaurant. Proper marketing can make this another solid revenue source that will differentiate your hotel from others and create a whole new way to book a honeymoon.

25. Encourage all employees to be salesmen

If your employees are happy, they will be happy to talk positively about your hotel. In addition to relating positively to hotel guests they encounter, you never know when they will encourage a friend or family member to stay at your hotel. Don’t ignore your employees. They are your most valuable asset.

26. Add some entertainment

Give your guests a little something extra to look forward to with some free or inexpensive entertainment. You could have a local musician play his guitar out by the pool or have Bingo at 7:00 pm in the lobby.

27. Provide outstanding service

Always meet or exceed expectations and you will have happy hotel guests.

28. Have a smart discount room rate policy

One of the world’s biggest hotel operators refuses to sell empty rooms to last-minute arrivals at a discount to that day’s regular room rates. It is not that they will not make money on the room, but rather, they do not want to “train” customers to arrive at 5:00 pm and expect to pay half-price for a room. All hotels adjust their prices regularly, depending on supply and demand, but they do not single out individuals for lower rates unless there are special circumstances involved.

29. Reward employees for good suggestions

If an employee comes up with a good idea that will help generate more revenue or lower expenses for your hotel, recognize and reward that employee. When employees know that they are appreciated, they will continue to work hard and look for ways to improve the hotel.

30. Publish a hotel newsletter

Last, but certainly not least, you can give a boost to your hotel by publishing an effective newsletter. Guests can opt-in to receive an email subscription to the newsletter and it is a great way to stay in touch with current and future visitors to your hotel. Always add great current content and offer incentives that are only available by subscribing (for free) to the newsletter.

If you remember to follow the rule of “people first, then money, then things,” you will be well on your way to running a successful hotel. Your guests and employees come first. Then you need to manage revenue and costs. Finally, you can reap the rewards of your hard work by taking a nice vacation in an exotic hotel in the South Pacific.

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