It’s no secret that hospitality is one of the industries that was hit hardest by the COVID-19 pandemic. Thousands of people lost their jobs, and many businesses were forced to close their doors. Travel is also not expected to return to pre-pandemic levels until 2024, according to a report by the American Hotel & Lodging Association. However, it’s still possible to stay afloat — even thrive — despite the pandemic and labor crisis. This simple guide on how to improve hotel revenue will help you fill those empty rooms and find success during challenging times.
First, ask yourself is whether or not your current challenges stem from staffing struggles. If the answer is yes, you can skip this whole guide and quickly solve the issue with Sprockets. Our hiring platform reveals which applicants are the right fit for your hotel, making it easy to improve the guest experience, loyalty, reputation, and bookings.
How to Improve Hotel Revenue — Simplified
Track Key Metrics
You won’t be able to identify areas for improvement if you don’t keep track of hotel revenue metrics. Here are a few of the numbers you should keep a close eye on:
- Occupancy Rate
- Average Daily Rate
- Average Length of Stay
- Revenue per Available Room
The last one, commonly referred to as RevPAR, is arguable the most important indicator of success. There are two ways to measure this: divide room revenue by the total number of available rooms or multiply your average room rate by the occupancy rate.
Also, calculating hotel profit margin can be easily accomplished by dividing net profit (total revenue after subtracting expenses) by total revenue. This should give you a decimal value that you can multiply by 100 to find your profit margin as a percentage.
Promote Direct Bookings
It’s a common practice to promote your hotel via online travel agencies (OTAs), like Expedia and TripAdvisor, but fees from advertisements and commissions can cut into your revenue. While we’re not suggesting you abandon all OTAs, it’s a good idea to try driving more direct bookings.
You can do this by getting the word out to potential guests about the value they get from booking directly on your website. Often, hoteliers advertise how visitors get the most up-to-date information on availability, access to exclusive specials and add-ons, and even the benefit of establishing direct communication for enhanced service.
Of course, make sure your direct booking process is user-friendly and convenient since that’s one of the main reasons why so many people use OTAs to book trips.
Hire the Best Applicants
It can cost upwards of $5,000 to replace a single staff member, according to a study by Cornell University’s Center for Hospitality Research. That’s why you must keep an eye on your hotel labor costs. Specifically, make sure you hire the right applicants every time to avoid costly employee turnover. It’s not only possible — it’s easy with Sprockets’ hiring platform that’s proven to improve 90-day employee retention by 43%, on average.