Hotel room revenue yielding strategy

In the current ongoing of pandemic of COVID-19 situation whereby people will do less travelling, it is not easy to implement dynamic room yielding strategy for hotel business.

How to yield better in room revenue is usually part of the discussion of revenue meeting held on weekly basis attended by Sales and Marketing team as well as by some other necessary operational department in the hotel industry. 

Is it effective to apply room yielding strategy in the current situation or is it better to focus on increasing the number of rooms sold by creating several attractive room packages with competitive rates?

This writing is aiming to give some insights to sales, marketing and revenue practitioners in the hotel industry with the purpose to maximize the hotel revenue through room accommodation.  I believe it is important to understand on how to apply several ways to implement room yielding strategy which I am about to highlight here.

Some of these ideas may be able to be applied in the current situation while another idea can be used at later stage when it is appropriate.

1. Level of occupancy

The indication here is the occupancy level.  When the hotel occupancy has reached a high level (not yet fully booked), will you increase the rate?

Do some analysis on the hotel surroundings as well as the market situation.  Do other hotels in the high occupancy level too?  Is there any more market demand for your hotel?  Hence, when your hotel occupancy is high, it does not mean that increasing rate is the correct strategy if there are no more market demand or if the market will prefer to choose other hotel with lower rate.

2. Room rate

Here, we will talk about the room rate.  You are probably familiar with the terms of dynamic rate and rate structure.  It is a good idea to create several levels of rate in the rate structure with the guidance on when to use each rate.

You can create different level of rate modifier based on hotel occupancy level as well as type of room which allows you to be dynamic to apply the most competitive rate.

3. Type of room

Which type of room you will initially sell and promote when there is a significant demand for your hotel? Normally, hotel will sell the leading room category first to boost occupancy because the first category room is the easier room type to sell.

How about selling the higher room category first to fill the hotel?  This is an option to be able to boost room revenue and yet gain higher average room rate.

4. Room allotment

Room allotment is commonly applied for group business. This is the best practice in hotel industry.

How about applying room allotment based on market segment?  This is possible to be done too so you can target your market not only in terms of number of rooms but also what rate to offer to specific market segment.

5. Booking window

Booking window is generally used when creating a rate promotion which means guests are only able to book the promotional rate during certain applicable periods. By doing this, you can expect that the potential customers will do the booking as soon as possible before the booking periods end.

6. Stay periods

Stay periods are varied from specific days, weekend or weekdays periods.  During these stay periods, you can create a rate promotion, such as, based on length of stay, weekend package, Monday booster, Friday in love and any other promotion aiming to enhance room revenue through occupancy, room rate or type of room in that particular period.

7. Seasonal periods

Seasonal periods can mean summer periods, winter periods, spring periods or autumn periods.  In Indonesia, we can use seasonal periods based on the national public holidays, such as, during Eid Fitr, Christmas, New Year, during school holiday or also during peak season when there is big event in the city.

Implement dynamic room yielding strategy is significantly important to boost the hotel room revenue.  Hence, I do hope some of the methods mentioned earlier can provide good insights to sales, marketing and revenue practitioners.

Have a productive day.