Despite signs of recovery in 2023, the hospitality sector's 2024 outlook is unpredictable. Deloitte's Hospitality Industry Outlook 2023 identified the hospitality sector's key challenges for 2024 as a drop in consumer confidence, continuing labor shortages, and the inability of hotels to raise prices despite escalating costs. However, by leveraging strategic hospitality revenue management, hotels can navigate these hurdles and even drive revenue growth in the coming year. While the effectiveness of these hotel revenue management strategies will vary by location, audience and the economy; here are ten effective ways to increase your hotel's revenue in 2024.
Elevate the guest experience
For hotels, it's more important than ever to offer experiences that meet guests' evolving expectations.
Achieve exceptional client experiences by enhancing your customer journey, actively pursue and promote sustainability initiatives, deliver seamless customer experiences, and consider expanding your venue's customer base with hosted events.
1. Enhance the guest experience with customization
The guest experience begins well before check-in. Review every touch point in your customer journey, from booking to check-out, and ensure you deliver exceptional customer service at every stage.
Make your booking process memorable with personalized service offerings, from room to balcony view recommendations.
Switzerland's Hotel Lugano Dante's online check-in portal, 'My Page', distinguishes its offering with up to 150 optional customizations per room.
2. Incorporate sustainability into concierge services
Increasingly, guests expect hotels to champion sustainability. Consider offering guests eco-friendly amenities and create a positive difference for your guests, business, and planet.
Advertising your hotel's sustainability policies can be a great way to attract the more eco-conscious traveler. However, be aware that consumers are increasingly wary of greenwashing.
Consider backing your claims with a recognized sustainable certification. Booking.com's Sustainable Travel Report 2023 found that 43% of today's travelers are willing to pay more for travel options with sustainable certifications.
3. Offer enriching experiences with hosted events
Don't be afraid to host different types of events at your hotel. Consider what would be suitable and the type of guests you want to attract.
It's not uncommon to transform hotel spaces. The Peninsula Hong Kong Hotel's 'Art in Resonance' programdelivered a series of celebrated art installations.
Luxury hotels are also great partners for health & wellness brands like SUDA, who deliver tailor-made programs and embed their wellness advisors in luxury resorts.
4. Unlock seamless customer experiences with technology
Technological innovations can enhance your hotel's customer experience and deliver savings over time. Introducing contactless check-in, mobile room keys, and transforming rooms with IoT devices can reduce friction points in the customer journey while providing guests with more personalization options for their rooms.
Introducing these innovations comes with the benefit of reducing staffing requirements.
Build a digital trading strategy
In 2024, your hotel must have a competitive online presence. This is vital to secure direct bookings customer retention and dynamically adapt room pricing to maximise revenue.
5. Be present online, provide direct bookings and enrich your distribution channels
While listings with Online Travel Agents (OTAs), like Booking.com and Expedia, increase the likelihood of customers discovering your hotel; given OTAs can charge up to 20% commissions, so they shouldn't be your only distribution channel.
It's vital that you have a website with your own booking portal. Given 38% of users report that they won’t engage with a website with an unattractive layout, your website must be simple and easy to navigate. Further, effective use of social media channels will help drive users directly to your site.
6. Maximize your hotel revenue with dynamic pricing
Dynamic pricing is a targeted hotel pricing strategy that allows you to optimize revenue per room based on real-time data. Utilizing software platforms, you can track market conditions, including room occupancy rates, abnormal events, and artificial peaks, which help inform you on when to make rate adjustments.
This approach can also reveal subtle booking patterns.
However, it's essential to be aware that frequent rate changes may raise concerns about your hotel's price integrity and that heavily discounted rooms can undermine brand value.
7. Upsell & cross-sell
Upselling and cross-selling are sales techniques used to sell guest room upgrades and additional hotel services, such as massages or tickets to a local attraction.
To maximise the opportunity for upselling and cross-selling, review each one of your customer touch points. However, for these methods to be effective, staff must have good knowledge of room categories, amenities and other hotel services.
To increase success rates, you can incentivize upselling and cross-selling with employee reward schemes.
Make the best of marketing
In 2024, the vast majority of hotel bookings will be made online. As a result, you must use data advertising and partnership opportunities as effectively as possible.
8. Use data advertising & virtual reality (VR)
Personalized adverts delivered on targeted platforms, from social media channels to email lists and pay-per-click adverts, are an incredibly effective way to advertise your hotel. They work best when segmenting your audience and tailoring campaigns for specific travelers.
Virtual Reality also offers exciting new ways for customers to experience your hotel before booking. The NH Collection Brussels Centre provides a 360-degree preview of their hotel to empower potential guests to explore the hotel before booking.
9. Make collaborations and partnerships
A collaboration with social media influencers is a great way to increase potential guests' reach. Social media personalities can offer exceptional engagement opportunities, with 70 per cent of teenagers claiming to trust influencers more than traditional celebrities.
Partnerships with local businesses and attractions also present new cross-selling opportunities for your hotel.
10. Create guest loyalty programs
Don't underestimate the importance of your existing guests. The Harvard Business Review estimates that the cost of acquiring new customers is five to 25 times more expensive than retaining existing customers. Incentivizing repeat visits by 5% can increase your profits by 25% to 95%, according to Bain & Company.
Offering a discount via your hotel's Guest Loyalty Programs effectively encourages repeat visits from existing customers.
Bonus tip from Iconic Brands: Give your hotel a strong and distinctive identity
Celebrating your hotel's single, standout feature is a powerful strategy to establish your hotel's identity and leave a lasting impression on guests. Whether it's a unique location, a rich history, or a striking chandelier in the dining room, identifying and emphasising that key feature sets your hotel apart. This approach resonates with guests because it helps make your hotel more memorable.
Iconic hotels have successfully employed this strategy for centuries. The Ritz-Carlton, renowned for its exceptional service, focuses on creating a luxurious atmosphere. While the Hotel du Cap-Eden-Roc on the French Riviera stands out by showcasing its glamorous history.
By directing attention to a distinctive feature and weaving it into your hotel's narrative, you can build a strong identity that resonates with guests. This sets the stage for an unforgettable guest experience and differentiates your hotel from the competition.
Enhancing hotel revenue performance: Education and expert resources
Given the challenging conditions hotels are facing in 2024, you must choose wisely among the best practices to drive revenue and support your business. To help you make informed decisions, consider seeking expert support and improving your knowledge of hotel revenue management:
- Get educated: EHL's Graduate School offers a number of online courses for hotel revenue management.
- Get an expert opinion: EHL Advisory Services offers tailor-made hospitality consulting solutions for businesses to improve their revenue management performance.
- Stay up-to-date: by reading blog articles about hotel revenue management, industry publications, attending conferences, or joining a professional network such as EHL Alliance to network with other professionals.
