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Understanding Hotel Revenue Management Strategies and Their Impact on Occupancy Rates
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Understanding Hotel Revenue Management Strategies and Their Impact on Occupancy Rates | Hotel Marketing • #HotelMarketing #BeatTheCompetition #Bezla Bezla.com • No matter where you are on your hotel revenue journey, Bezla can help you go further. • Bezla.com LLC • Website: https://Bezla.com • LinkedIn: / bezla • Phone: +1-888-999-8086 • 1800 JFK Blvd Suite 300 PMB 91649 • Philadelphia, PA 19103 • - - - - - - - - - - - - - - - - - - - • Hotel management is assessed through occupancy rates; hence, setting room rates is crucial to increase occupancy. Establishing reasonably high rack rates and standard prices is common among hoteliers to increase revenue instead of giving considerable discounts to guests. Negotiated, corporate, and government rates lower than the rack rates are also provided. These are generally based on the guaranteed number of room nights during a specific period giving businesses and government guests stable rates for planning. Moreover, considering variable costs estimated at around 15 to 25 percent of the total expenditures shows that a slight increase in occupancy rate can significantly affect revenue. Creating pressure among hoteliers to increase their occupancy rates and even going as far as offering discounts to meet the target volume. Yet, offering lower room rates can result in a loss of net operations income since competitors can counter the said room rates through discounts. Likewise, when occupancy rates decrease, it is not practical to raise the room prices to cover the overhead cost since higher prices result in lower occupancy rates— further increasing the overhead cost per room. What must be done is to have an established pricing strategy and policy to avoid overpriced room rates and loss of revenue. • Hotels can also consider how pricing complimentary products and services helps increase occupancy rates. It could be through discounted prices that can build loyal guests, generating higher demand for food, beverages, and other hotel amenities. To illustrate, hotels in Las Vegas successfully increased their profit with lower room rates and meals. Also, prices for room rates can still be increased while the prices for food and drinks remain the same. In a nutshell, logical decisions still play an important role in hotel management revenue, especially today, when guests are keen on dealing with room rates. • If Bezla could be of service to your hotel marketing, call us at +1-888-999-8086 or visit our website at www.bezla.com.
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