how do hotels grow rates? 5 strategies for success

BOOKING TECHNOLOGY AND CONVERSION OPTIMISATION EXPERTISE

NET AFFINITY | WWW. NETAFFINITY . COM

5 STRATEGIESFOR SUCCESS

H O W D O H O T E L S G R O W R A T E S ?

OVERVIEW

B U D G E TS E A S O N

I T ' S T I ME F O R 1 . D I S T R I B U T I O N S E G ME N T S

2 . C O MP E T I T I O N A N A L Y S I S

3 . G I V E D I R E C T T H E A D V A N T A G E

It's time for dedicated sales teams to divedeep into planning for the year. How can youdrive direct bookings while also growingrates?

We've outlined 5 successful approaches torate growth.

4 . A V A I L A B I L I T Y

5 . G R O U P B O O K I N G S


BERKSHIRE UNIVERSITY | COLLEGE OF ARCHITECTURE

DISTRIBUTION SEGMENTS

S E G M E N T SD I S T R I B U T I O N

When examining yourdistribution segments for rategrowth opportunities, start by

reviewing each segment forthe year gone by.




Challenge yourself on the lowestperforming ADR segments. Ask yourself

what you might have done differently oneach segment.


Example: Could you have started your BestAvailable Rate at a lower figure? By startingwith a lower BAR and gradually increasing,

you gain more total revenue than you wouldby starting too high and needing to reduce at

the last minute to pick up bookings.




KEY POINT:When looking at the net rate from each segment, subtract thecommission paid to each channel. If you remove a channel with highercommission rates, could you replace the business with bookings fromchannels with a better cost per acquisition?


COMPETIT ION ANALYSIS

A N A L Y S I SC O MP E T I T I O N

Analyse your competition carefully.

In a few hotels I’ve worked for, therehave been instances where a group

inquired and we knew we were directlycompeting with our neighbours for

the business.




D R I V E T H E M T O T H E C O MP E T I T I O N :

In some cases, we would drive them into the arms of thecompetition by quoting a higher rate. This would let ourcompetitors fill up on group business at a lower rate.

When the next group inquired, we were able to drive higherrates, knowing that the competition didn’t have the space to

quote for them.

If this strategy is successful, you can take complete rate controlwithin your market.




The same concept applies for BAR and Package business.Review your competitors in detail – can you identify their rate

strategy? Be as independent as possible with your rategrowth strategy.

Give added value to your guests, and they will understandwhy your rates are above your competitors’.

If you make your value proposition strong enough andyour market allows for it, value can trump price to a

certain point.




F R E E B R E A K F A S TTHE STRONGEST ADDED VALUE IN THE MARKET

RIGHT NOW?

We recommend bringing this into packages and rateplans wherever possible.


GIVE YOUR HOTEL WEBSITE THE ADVANTAGE

ADVANTAGEG I V E D I R E C T T H E

Give your hotel website the advantageover other online channels.

Managed correctly, your directchannel has the lowest cost per

acquisition, and it should be yourbiggest focus for rate growth.




When guests book directly, you gettwo important benefits: yousave money and increase revenuein the short term, and you have amuch bigger opportunity to acquireloyalty and repeat bookings in thelong term.

How do you do it?




One easy way to promote direct bookings and achieve ADRgrowth is to remove the Single room option from all channelsexcept your own site.


This will benefit you in a number of ways. Firstly, your website will trulybe offering a “Best Rate Guarantee“ for the Single room category, ratherthan simply maintaining rate parity with OTAs.

It is important to note that won’t affect your parity agreements withOTAs and other channels. The only change will be that you are onlyoffering a specific room category on your own site.



HOWEVER, A ROOM CATEGORY BY ITSELF IS NOT A REASONTO BOOK DIRECT. YOU MUST ALSO OFFER A CLEAR,COMPELLING AND UNIQUE REASON TO BOOK DIRECT.


These are different from your hotel’s overall selling points (e.g. free WiFi,no booking fee, a free children’s club, and other things that should beoffered across all channels).

NET AFFINITY | NETAFFINITY . COM


B O O K D I R E C TGREAT REASONS TO

Free Breakfast

Early/Late Check In

Free Drinks or Chocolates on Arrival


AVAILABIL ITY

AVAILABILITYL E T ' S T A L K

Your availability strategy comeswith huge opportunities for

advantage.



AVAILABIL ITY

Review your lead time and cancellation percentages foreach channel.

Reconsider when you give availability to channels:instead of giving them 12 months in advance ofinventory, try reducing it to 6 months.

Let your website sell your longer lead bookings, ratherthan keeping long term availability on all channels.



AVAILABIL ITY

If you are a property with a high volume ofweddings bookings, consider implementing a

minimum stay policy to try and maximise theshoulder nights. Offer package options to your

guests, rather than just your Best Available Bedand Breakfast rate.


Net Affinity’s Wedding Packages solution offersthe perfect opportunity to do this. Any of ourhotels can create a unique wedding package

code within our Booking Engine that allows thecouple to give their guests that special code to

use when booking their rooms for the wedding.


GROUP BOOKINGS

BOOKINGSG R O U P

Ask these questions when youdiscussed the group highlights forIncentive, Corporate and Leisure:

Did you need them? Could you havegotten more on the rate? Can you

push them to a different week nextyear?



GROUP BOOKINGS

WH E N T O R E V I E W:

Review week by week, 52 weeks inadvance, and try and make the jigsaw fit.

Remember: The greater the room block,the more you can drive your Corporate

Rate – and, more importantly, your BestAvailable Rate and Packages on your own

website.



GROUP BOOKINGS

G E T C O N F I R M E DB U S I N E S S O N T H E

B O O K S E A R L Y .

THE FUNDAMENTAL GOAL IS TO

After that, you can adjust your rates accordingly tomaximize rate.


RATE GROWTH

A C H I E V I N G R A T EG R O W T H I S AC H A L L E N G E .BUT THERE ARE KEY FACTORS ANDINFLUENCES FOR EVERY HOTEL.


RATE GROWTH

DO WE NEED THAT BUSINESS?

HOW MUCH DID IT REALLYCOST US?

COULD WE HAVE GOT MOREON THE RATE?

WH E N Y O U A S KT H E S EQ U E S T I O N SS E R I O U S L Y ,Y O U ' L L C O ME U PWI T HI N N O V A T I V ES O L U T I O N S .

RATE GROWTH


T H A N KY O U !

F R O M A L L O F U S A T N E T A F F I N I T Y ,

WE ' R E E X P E R T S I N H O T E L T E C H N O L O G Y A N DC O N V E R S I O N R A T E G R O WT H F O R H O T E L S . I F

Y O U ' V E G O T Q U E S T I O N S , E MA I L U S A TS A L E S @N E T A F F I N I T Y . C O M

how do hotels grow rates? 5 strategies for success

Sales