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4 Tips For Successful Resort Revenue Management Right Now

December 3, 2020 | Sarah McCay Tams, Director of Content, EMEA

As we round out the year and resorts and travelers both start tentatively looking ahead to 2021, what revenue tactics should resorts be considering for the year ahead?

We caught up with four revenue consultants to get their top tips on what resort revenue managers should be considering in order to maximize on profit in the months ahead.


Discover more top tips and best practices for building out your Resorts Revenue Strategy for 2021 in our latest eBook ‘Resort Revenue Tactics: Building Robust Strategies For 2021.’ Download your copy here


1. FOCUS ON PREMIUM ROOMS & SUITES

One strategy applied very successfully is to keep the lowest room category closed and start selling from the higher room categories upwards. This has an immediate and substantial impact on the ADR and overall revenue. It’s a great way to mitigate year on year revenue decline with hotels achieving only marginally lower revenues year on year in spite of substantially lower occupancy. 

During the pandemic demand cannot be generated by discounting rates because the demand just isn't there. Safety is the highest concern, so by selling and converting those higher categories, that are typically larger room types, offering more space, you're delivering on rate and a much better guest experience. 

This strategy is particularly successful, if due to social distancing you can only sell up to 80% of your inventory even during high demand periods such as weekends and holidays. This also applies if you have a large proportion of suites, chalets or cottages where people can experience family life while also enjoying the hotel services like turning up for breakfast, lunch, dinner, but then the rest of the time being in their own bubble rather than isolated.  

This strategy can have a substantial impact on your overall revenue and guest experience, so go as high as you can in terms of still delivering exceptional value. 

Jutta Moore, Managing Director, Moore Hotel Consulting

 

2. MANAGE ANCILLARY REVENUE

There is a huge opportunity to keep people on property and drive ancillary revenue. The on-property experience, once viewed as safe, means guests might be hesitant to go out and try new things. Lots of restaurants and activities they may have been interested in are no longer open or are less attractive. Those resorts who can keep these services open have a huge opportunity.

You need to really highlight this and sell the on-property experience before the guest arrives. This takes more than just the confirmation email. I’m seeing hotels doing really well with drip marketing campaigns to show them what’s possible when they get on-property; place the guest at that destination before they actually arrive.

Total revenue management has always been important. Oftentimes you have to look at it through a different lens. Owners are making big decisions: can we be open, what services can we offer? Revenue teams need to make a compelling case for owners as to why these services should be open.

Mike Medsker, President, Focal Revenue Solutions

 

3. TRY BRANDED ACTIVITIES

I love resorts, because they have the ability to do so much. They have lots of locations. They have pools. They have indoor spaces. They have teams of people. They've got great food operations. They can handle so many different things. So I always push resorts to do branded activities, branded packages and branded add-ons, so that they can increase revenues, but also increase their brand loyalty.

It can be little things. It could be hula demonstrations if you're at a beach resort in Hawaii or if you're on a golf resort it could be a tee time with the course champion, and you get some pro tips. It’s free, but it’s on Sunday night, so why don't you stay an extra night?

It's all about being creative within your brand and thinking strategically. Doing that on a Friday or Saturday night really isn't going to help you at all. Increase your activities to make it so that it's more interesting for folks to stay with you during the times that you need them to stay with you.

Communication is central to the success of this. Let's take the tee time example. Email or message guests the day before they leave. “Hey, we have this opportunity and we have 10 spots. We're doing this in a socially distanced fashion. Everybody is going to be following the rules in this way and this is what we expect of you. We have 10 spots available.”

You have got to take the time to actually sit down and think about how you're going to do these things and just do it.

Sam Trotter, Marketing and Technology Consultant, https://tomorr.ooo/

 

4. FOCUS ON PRODUCTIVITY

With the limited demand out there, it is more important than ever to start shifting our attention from revenue (topline) to profitability (bottom line). A lot of things have changed in 2020, and Revenue Managers could now become Profitability Managers where instead of optimizing RevPAR they now optimize GOPPAR.

For a resort hotel owner, this also means understanding better the cost structure of the hotel operations. What is my breakeven ADR and occupancy? How many full-time employees do I need and how many part-time, contract basis staff can I take if the occupancy increases?

We have seen some hotels getting ready to have a leaner team as a base then adjust accordingly with variables if the occupancy/demand increases. Utilizing task force consultants, outsourcing some key positions and shifting from fixed staffing to demand-based staffing.  

Thibault Catala, Founder and Managing Director of Catala Consulting

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