If your occupancy rates surprise you season after season, it’s time to change your methods.
Despite the belief among some hoteliers that occupancy rates are unpredictable and uncontrollable, occupancy rates can be predictable -- and knowing where they’re headed can help you increase them.
Prediction is Key For Good Revenue Management (+ Increasing Overall Hotel Occupancy)
Is it really that important to know your occupancy rate ahead of time? Haven’t you been doing fine just checking people in day to day? Maybe, but prediction helps you make the most of the good times and survive the bad times.
It helps you adjust to changing business conditions and tells you where you could make necessary changes. In other words, it can help you better manage your revenue.
How to Improve Your Predictive Power and Use It
All of this sounds good, and maybe it’s even a strategy you’ve thought about employing before. But you’re a hotel owner, not a fortune teller, so how do you begin to predict occupancy?
Here are some of our best suggestions that you can start doing today (and none of them include using a crystal ball).
Keep Records and Use Them:
Stay on top of things like room rates and occupancy. Make sure that you’re noting important things like seasons where occupancy spikes or declines, and what the prices were at those times.
Some other records to pay attention to include:
- Information about functions that might have been held at your hotel.
- How many people used your website and the kinds of features they explored.
- Promotions and sales that you ran in the past that guests actually took advantage of.
Finding out what worked in the past means that you can copy those strategies and employ them again moving forward, especially in seasons where your occupancy is already low.
Do the Math:
Despite all the complex methods out there for crunching the numbers, the arithmetic you need is rather simple. You can determine your occupancy rate by dividing the number of booked rooms by the total rooms. So 400-room hotel with 300 rooms booked has an occupancy rate of 0.75 or 75%.
But what do those numbers translate to for your hotel? And how can you use them to increase your occupancy rates?
Here’s the tricky or, more accurately, the tedious part. If you really want your occupancy rate to be useful, you need to break it down, maybe right down to the month and day of the week, and the room that they stayed in.
You might find that you have a great occupancy rate on Fridays but a really low one on Wednesdays. If so, you might ask yourself why and work on ways to raise that Wednesday rate.
Consider Your Customers:
Asking these questions will give you important clues to what your future guests might want and like and will help you build occupancy rates.
If you know that the majority of guests that stay with you in January stay for business, you can offer special deals for business travelers in January that will bring more travellers through your doors, and watch your occupancy rates skyrocket.
Market, Market, Market:
Like being in the right location, doing the right kind of marketing is essential to increasing your occupancy.
Being able to predict your occupancy is a big step toward effective marketing. It can tell you when to run promotions and what kind of promotions to run, when and how to adjust pricing so you can advertise low rates ahead of time.
When marketing your hotel be sure to:
- Use a lot of images. Do you have stunning custom hotel furniture? Showcase that on your website, ads, and social media.
- Renovate where needed. New renovations are a great way to improve your guest spaces, and showcasing these renovations in your advertising can help increase occupancy rates.
- Convey the value of your hotel. Are you the closest hotel to the airport? Talk about that! There’s a chance that guests don’t know that, and if they did, they would choose your hotel, thus increasing your occupancy rates.
Increasing your occupancy rates really boils down to figuring out what is working for your hotel, and capitalizing on it.
Let your guests do the talking, use what works, and watch your occupancy rates soar.