Simple Ways to Optimize Revenue In Times Of Low Demand
Periods of low demands are categorized as Seasonal and Accidental. Seasonal low demands occur at specific times during the year. For example non-vacation months, weekdays, weather conditions based on location come under the branch of seasonal low demand and these can be easily predicted. Accidental low demand on the other hand is not only unpredictable but can take place globally, nationally or locally.
Consequences of low demands are low reduced room occupancy, strong competition and competitive pricing. Therefore, during times of low demand periods, optimizing revenue is the highest priority and here are a few ways that can be helpful.
The concept of forecasting is based on the performance data of your hotel, wider industry data and additional information to help gauge future levels of demand. This is crucial for any hotelier who is wanting to optimize revenue during low demand because forecasting helps you to plan and develop strategies.
For precise forecasting multiple factors such as existing bookings, performance of competitor hotels, market conditions are taken into consideration. With a good digital franchising system in place, you can get detailed information and always be up-to-date. This should help you to make informed decisions regarding expenditure, room rates, which demographics to target and more.
Closely Monitor Your Pricing Strategy
During times of low demand, the pricing strategy that you choose to adopt is highly critical. Charging lower rates for your rooms will attract customers who would have otherwise chosen your competitor and that results in an increased revenue for you. However, if the demand is very low and you further reduce your room rate, customers who were willing to pay the previously reduced price will end up paying even less and you lose out on revenue.
Reducing room rates drastically also has an impact on the perception of your property and the services you offer. Therefore, you must select an appropriate pricing strategy.
Get in touch with our Stayflexi team and find out what works best for you.
Work On Your Advertising and Marketing Strategies
Gone are the days when you hope that customers will themselves find your hotel and book a stay with you. Which is why, it is crucial to have effective advertising strategies in place. It may seem like a bad decision to invest in marketing during seasons of low demand. However, this could change the game and make a huge difference for you since your competitors will work on cutting down on advertisement budgets.
Your marketing message should clearly state why potential customers ought to put up at your hotel. Ensure to list your unique selling points whether it’s the location, level of services offered, style of hotel or other amenities offered by you. Highlight customer needs such as great wifi service or selection of restaurants to choose from in the hotel. Try to reach out to a wide audience.
Up-Sell and Cross-Sell
Up-selling refers to the practice of encouraging your guests to spend more on the current purchase made by them. For example, offer them slightly discounted upgrades to a bigger room or a room with a better view.
Cross-selling refers to encouraging additional purchases. Provide your guests with offers they can’t turn down on sight-seeing, zumba classes, spa amenities et cetera and help increase your revenue.
Low demand periods are inevitable. However, if you have effective strategies in place, you will always be able to keep your hotel up and running.