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Hotel_Revenue_Management

Uncovered: The secret behind the Hotel Revenue Management Strategy

In our early days of Crown Property as the holding company of Equity Hotel Managementusually do our job well, we will always ask our clients’ questions, ‘Do You Have Standard Room in Their Hotel’. In this case, we will discuss how many people will pay for a service that is Standard (or more accurately average). The name and type of room type is an opportunity that is often missed at the hotel to position the product commercially more attractive and competitive.

Using Hotel Room Type for Strategic Positioning

The name and type of room type is an opportunity that is often missed at the hotel to position the product commercially to be more attractive and competitive. Before we get to the commercial aspects of this type of naming type, we have to go in why we have room types and how many hotels should have them. Room type is basically a different product that the hotel offers to the market. Having a varied product offering allows the hotel to offer different levels of prices to suit different levels of budgets as well as consumers’ psychological needs.

Price is a psychological game. Not everyone buys the cheapest product offered by a service provider. For those of you who go to a hospitality school, remember the restaurant management class that explains why the wine list requires choices? Many visitors will buy from the lowest price list. And we have to make sure the wine is very profitable. This menu technique should be applied to hotel rooms as well. We need to offer a wide selection of rooms, with prices slightly up from the category of rooms economical and do not require extra cleaning fees.

Need to be informed, Hotel visitors will sell their own without any effort on your part!

Well, that’s not entirely true. My esteemed friends. We need to be creative and open our minds …

It seems we are dealing with the heritage issue in the hospitality industry based on technological heritage and the indoctrination of old schools. In the early days of digital distribution, the hotel industry has a system code for rooms that include types such as Standard, Deluxe, Superior, Junior Suite etc. It seems that this level of standardization has flowed through the erosion of creativity in our industry. The hotel has pretty much mimicked this somewhat boring unification continues to be applied even when opening new hotels. It looks like we’ve been brainwashed or indoctrinated by old school thinking, and challenged to think outside the box.
Untungnya, masih ada pejuang pemberani di luar sana yang melanggar dogma ini. Lihatlah contoh di nama tipe kamar di W Hotels:

  • Cozy Room
  • Wonderful Room
  • Wonderful Sky Room
  • Fabulous Room
  • Fabulous Sky Room
  • Studio Suite
  • Cool Corner Suite
  • Marvelous Suite
  • Spectacular Suite
  • Wow Suite
  • Extreme Wow Suite

Metodology

There are many ways to choose the name of a creative and exciting type room, even with a more classic hotel. Always when we take revenue management for a new hotel, we undergo training where we list all room numbers with each feature;

  • Floor/Level
  • View / Orientation
  • Size in m2
  • types and sizes
  • Seating
  • Normal and max occupancy level
  • Extra Beds / sofa bed
  • Facility details
  • Shower vs tub

Based on this we can group rooms that are similar to the category, after which the creative process of naming them come into play. Focus on the different room attributes and connect to the concept of the property, and you can find some amazing room types.

I always like the exercise because it always motivates the team in understanding that we are selling experiences, not products. The name of the room type should capture the essence of your experience and concept, and communicate clearly what people expect.

Your Guest Will Be Upselling Alone

Go back to the wine menu class from the hotel school day. Putting 2 or 3 wines on the menu will make most people choose the cheapest. Adding more choices leads to people who are riding in their chosen price category.

Same goes for the hotel. As we apply this type of room option at both the hotels and resorts in the city, we see an increase in an average rate increase. People handle it by themselves. This works best if the supplements are not too high. For example, in city hotels, we often use increments for a certain price of Rp 100,000, and in luxury resorts or boutique hotels, we make a little more than $ 30 to $ 100.

In a medium-size hotel 50 to 60 rooms, I usually want to have about 6 types of rooms. Of course, it’s different for every hotel, but to drive up income, you need a measuring instrument, and the most effective type of room is included.

It works like a charm, ADR and RevPAR at all times apply this trick in the hotel.

Hope this be a very helpful eye-opener. Go back to your business plan board and view property assets objectively. If you need help, do not hesitate to contact us. We’ll be happy to help you tap into your untapped potential revenue.

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