Potential High and Low Demand Tactics – Hotel Front Office REVENUE / YIELD MANAGEMENT
High Demand Tactics
High Demand Tactics includes..
- Close or restrict discounts – Analyze discounts and restrict them as necessary to maximize the average rate. You may offer discounts to those who book longer stays, or restrict bookings to shorter stays.
- Apply minimum length of stay restrictions carefully – A minimum length of stay restriction can help a property increase room nights. For groups, study the groups’ patterns and decide how many days they are likely to add to their stay.
- Reduce group room allocations is another great tactics– Communicate with group leaders on a regular basis. Make sure the group actually needs the number of rooms identified in its contract. If not, make adjustments.
- Reduce or eliminate 6 P.M holds – Reduce or eliminate the number of unpaid rooms that are being held until 6 p.m. When demand is high, you need rooms available to fill.
- Tighten guarantee and cancellation policies tactics– Tightening guarantee and cancellation policies helps to ensure payment for room nights. Charge credit cards for the first night’s stay on the day the reservation is made.
- Tactics on raise rates to be consistent with the competitors – Charge rates consistent with the competition, but limit rate increases to those rates published in the central reservations systems and listed in brochures for the period.
- Consider a rate raise for packages – If you are already offering a package discount, consider raising the rate for that package.
- Apply full prices to suites and executive rooms – In a high-demand situation charge full price for suites and executive rooms.
- Reserve close to arrival dates – By allowing the reservations to be taken for a certain date as long as the guest arrives before that date, a property is able to control the volume of check-ins.
- Evaluate the benefits of sell-throughs – With a sell through, the required stay can begin before the date the strategy is applied. This is often used when one day has a peak in occupancy and management does not want the peak to adversely affect reservations on either side of the peak day.
- Apply deposits and guarantees to the last night of stay – For longer lengths of stay, make sure the deposits and guarantees apply to the last night of the stay, minimizing early departures.
Low-Demand Tactics includes..
- Sell value and benefits tactics– Rather than just quoting rates, make sure guests know you have the right product for them at the best value. Sell the various values and benefits of staying at your property versus others that the guests may be considering.
- Tactics on Offer packages – To increase room nights, one tactic is to combine accommodations with a number of desirable products and services into a single package with one price. Mention any additions, renovations, or new amenities. Non-room revenue can be included, for example – free movies, discounted attraction tickets and shopping coupons.
- Keep discount categories open – Discounts are directed toward particular markets or are instituted during a particular time or season. During low-demand time, it is important to accept discounts to encourage room nights.
- Encourage upgrades is another great tactics– Move guests to a better accommodation or class of service to enhance their experience and encourage them to come back to the property again and again.
- Offer stay-sensitive price incentives – A stay sensitive price incentive provides a discount for guests who stay longer. For example, a guest staying 3 nights might get an additional Rs.2000/- per night discount, while a guest staying one night might not
- Remove stay restrictions – Remove any stay restrictions so guests are not limited as to when they can arrive or depart. Guests who can stay only one night will be encouraged to stay as well as those who are staying for a week. This will help to maximize occupancy.
- Involve your staff – Create an incentive contest to increase occupancy and room nights. Make sure to involve all members of revenue department as well as central reservations staff.
- Establish relationships with competitors – Having a cordial relationship with competitors can help with referrals and can help to carry out cross-marketing efforts.
- Lower rates tactics– There is great value in keeping guests at the property as long as you are at least covering the cost of occupancy. You may want to lower your rates as low as possible. Identify the hurdle rate, which is the lowest rate acceptable at that given date.