Checklist for Hotel and Resort Revenue Management

OK, so last year we sold 1.836.117 rooms at Xotels. Not bad. To be honest I am even impressed by these kind of numbers myself. But how did our team of hotel strategy experts maximize revenue and profit for these? We have put together a revenue management and marketing case study, highlighting our best practices and proven techniques.

CASE STUDY REVENUE MANAGEMENT: HOTEL QBIC AMSTERDAM WTC

 

 

 

 

 

 

 

 

 

1. PROFILE OF THE HOTEL:
Modern Budget city property with very high occupancy (94%-95% every year.) The hotel is located in the business district called the South Acis, inside the World Trade Center. It is a real hub in the city. The property has a podstyle hotel with cool and functional design, located inside an office building.

2. THE REVENUE MANAGEMENT CHALLENGES:
Xotels has been running this property since 2010. After 8 years of successful performance the revenue management challenge of this hotel case study is to keep growing the generated revenue. And with occupancies always in the mid 90%, ARR increase is the only way to go … Ah yeah and of course to replace OTA business with Direct bookings.

3. REVENUE MANAGEMENT OPPORTUNITIES PROPOSED AND IMPLEMENTED BY XOTELS:
Better inventory management:
 Revising room-type supplements
 Overbooking room-types strategically in low demand periods
 Restrictions on OTAs on MLOS and room categories on high demand periods
 Inventory micro-management to optimize conversion on stay through availability

Group quotations:
 Increasing conversion levels for low/mid demand periods with competitive offers
 Driving ARR for high demand periods

Website growth techniques:
 Trademark protection
 Meta-search with a strategic selective approach, favoring high value stays over blanket volume bidding
 Conversion stimulation via persuasive pop-ups
 Subscription based discount and promotional codes prominently positioned on website
 Post stay emailing to gain loyalty and improve reputation score
 Focus on Best Price Guarantee on website and in Booking funnel
 Fixed corporate rates to used to drive demand on low season
 Yield opportunities, driving ADR on weekends and special events with a longer lead time
 Deeper and better analysis of segmentation and booking pace, micro managing yielding for a 13 month window

4. THE RESULTS: REVENUE MANAGEMENT KPI’S TO MEASURE THE SUCCESS OF THE HOTEL
After having this hotel at our Revenue Management portfolio for many years, and as result of the business strategy to increase revenue, the KPI’S are as follows:

• RevPar: 30% increase on the last 3 years
• Net RevPar: 32.3% increase on the last 3 years

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

Hotel Business in China; 10 Tips for Hotels to Penetrate this Market

With around $300 billion spent every year overseas, Chinese market is incredibly tempting for hotels, but it’s probably the hardest one to penetrate as well. We are always looking to develop our yield and revenue management and hotel distribution strategy for new opportunities. Talking with some of the experts in the market we have put together a top 10 list of tips and best practices to make your hotel ‘chinese friendly’ and attract this massive growing market segment.

So, if you don’t know where to start with the “Land of the Dragon”, forget about noodles, dumplings or martial arts B-movies and follow this short guide to turn your hotel into the ultimate Chinese-friendly experience!

1, 2, 3, GO!
Statistically, the average Chinese travelers stay is pretty short (according to a recent Ctrip study, most package-tour travelers visit over 3 Countries in 10 days), they prefer to move in groups and avoid the DIY approach. This is because of several reasons: usually Chinese do not speak fluent English, so traveling in groups is reassuring, moreover, agencies take care of pretty much every aspect of the travel, including getting Visas (only 7% of the population actually possesses a passport and getting a Visa is usually a pain in the butt, if you pardon my french). Chinese travelers have a clear preference for beaten-track destinations with known landmarks.

TIP #1: SPEAK TO YOUR TOUR SERIES AND GROUP BOOKERS AND FIND OUT IF THEY HAVE CHINESE CLIENTS. YOU COULD USE THIS GROUP MARKET TO QUOTE ‘OPAQUE RATES’ TO CREATE BASE OCCUPANCY. OF COURSE HIGHLIGHT THE SPACE YOU HAVE FOR BUSSES OR MINIBUSES TO DROP-OFF AND PICK-UP GUESTS.
THE YEAR OF THE CAT, NOPE, THE DOG
Equally important is to recognize the religious, cultural and political differences. For example is not unusual for Chinese to have only one or two weeks of annual holidays. Unthinkable, for us, lazy Europeans! Nevertheless, last year over 6 million of Chinese travelers spent the Lunar New Year Holiday week (late January – early February) overseas, a period that is usually considered low-season in Europe and can be, therefore, exploited!

TIP #2: STUDY THEIR TRAVEL HABITS AND CREATE SPECIFIC PACKAGES FOR THE SPRING FESTIVAL BREAK!
MEETING THE EXPECTATIONS
You should learn what the Chinese travelers expect from hotels when abroad: paying for wifi, for example, is unimaginable and, even though they do not expect your staff to speak fluent Mandarin, it will certainly improve their experience. Comb, toothbrush, and slippers in a room are expected, just like kettles to make (huge quantities of) tea. When managing a complaint with a Chinese guest, staff should be indirect, diplomatic and avoid confrontation at all cost: the worst offense you can do to a Chinese is to lose your temper, as hiding emotion seems to be the national sport over there. As bad as it may sound, hotel staff (and staff in general) is considered as servants by Chinese, therefore more delicate issues should be managed by General Managers directly. Never turn your back on a Chinese guest and don’t forget to smile like until your mouth aches when talking to them. Do not offer preferential treatment to women and, in the rare case a Chinese offers you his business card, treat it as the Holy Grail and grab it with two hands.

TIP #3: SOMETHING THAT IS NORMAL IN WESTERN CULTURES IS OFFENSIVE TO CHINESE. DO YOUR HOMEWORK! HAVING CHINESE SPEAKER STAFF IS A VERY EFFECTIVE, YET, NOT ALWAYS POSSIBLE FOR SMALL PROPERTIES. TRY ADDING SOME CHINESE TV PROGRAMS AND A FEW TYPICAL DISHES ON YOUR MENU! AND HOW ABOUT PARTNERING WITH A LOCAL CHINESE SPEAKING TOUR-GUIDE …
THE DEVIL IS IN THE DETAILS
Did you know that the Chinese word for “four” sounds like the Chinese word for “death”? Greek call this tetraphobia, or fear of the number 4. This number should never be pronounced during holidays or when somebody is sick. Chinese elevators often skip the 4th floor. So, you got it: NEVER put a Chinese guest on the 4th floor. Looking for a complaint (or an ancient Chinese curse?): assign the room 444… But, hey, the good news is that the numbers 8 and 9 are considered very lucky.

TIP #4: MAKE SURE YOU NEVER ASSIGN A ROOM WITH A “4” IN IT TO A CHINESE GUEST, BUT PREFER ROOMS WITH A 8 OR A 9
PAY WITH MY LITTLE PHONE
A friend of mine from Shangai once told me that “I can live pretty well by having only Alipay or WeChat on my mobile”. This can sound like a radical statement, but it is incredible how quickly the Country managed to move its payments from cash to digital, almost skipping the credit card phase tout-court. According to a recent Nielsen survey, when abroad Chinese travelers “subconsciously take out their phones, only to realize later that the merchant does not support mobile payments”.

TIP #5: ACCEPT ALIPAY AND WECHAT AS METHODS OF PAYMENT! DON’T FORGET TO MENTION IT ON YOUR WEBSITE
BANNED IN CHINA
Even though there is a timid, new trend of tech-savvy Chinese travelers using western online platforms such as Google (via VPN, of course) remember that over 6 million websites are blocked in mainland China. And, between them, there are the main western capitalist social media such as Facebook, YouTube, Twitter, and Instagram. So trying to penetrate the Chinese market using these platforms is like trying eat chicken soup with chopsticks.

TIP #6: ACCORDING TO DRAGON TAIL, OVER 70% OF CHINESE TRAVELERS USE SOCIAL MEDIA AS THE MAIN CHANNEL TO ORGANIZE THEIR TRIP. DID YOU KNOW THAT WECHAT HAS MORE USERS THAN INSTAGRAM? CREATE A WECHAT ACCOUNT (POSSIBLY A SERVICE ONE) NOW!
FORGET ABOUT BOOKING.COM AND GOOGLE
OTAs are different from ours in China (oh, yeah, that’s surprising…): even though Booking.com and Agoda are available, Ctrip, Qunar, and Alitrip are way more popular. TripAdvisor has its own Chinese language version (DaoDao), but it is way less used than Qyer or Mafengwo. Same with search engines: political pressures have negatively influenced the expansion of Google, so the majority of hotel searches start in Baidu (700 million users). On top of that, the algorithms developed to organize search results in Indo-European languages are not effective for different alphabet and syntax.

TIP #7: CONNECT WITH CHINESE OTAS, AT LEAST WITH CTRIP (OVER 50% OF MARKET SHARE AND 160 MILLION APP DOWNLOADS) AND DO NOT WASTE MONEY ADVERTISING ON GOOGLE, BUT TRY SOME BAIDU ADS!
PAPER IS DEAD, BUT NOT ENTIRELY
Did you know? One of the most popular travel search queries in China is “name of city + travel guide”. As anachronistic as it may sound, being listed on a few guides is not such a bad idea.

TIP #8: LIST YOUR HOTEL ON A FEW CHINESE TRAVEL GUIDES TO INCREASE YOUR BRAND AWARENESS
WHERE TO HOST YOUR CHINESE WEBSITE
Loading times for websites not hosted in China can be incredibly high. But, in order to host your website over there, you should register a Chinese business… And it’s bloody expensive.

TIP #9: IF YOU CANNOT HOST YOUR WEBSITE IN CHINA, CHOOSE HONG KONG: IT’S SLIGHTLY EASIER AND LOAD TIME WILL BE GOOD ENOUGH FOR CHINESE WEB USERS
KILLED BY DESIGN
The cultural background heavily influences Chinese aesthetic canons as well. Try to compare Tripadvisor with its Asian equivalent Daodao: the profound aesthetic web design differences are striking. Advertising in China is not that simple, either. Baidu, for example, is way more restrictive on advertisements than Western search engines and it requires the approval of your account before you can start bidding.

TIP #10: CREATE A DEDICATED WEBSITE VERSION FOR CHINESE USERS AND MAKE SURE TO FOLLOW BAIDU GUIDELINES FOR ADVERTISING!
THE FINAL WORD
China is a complicated market, especially for the cultural and political differences that divide us. If you want to attract the Chinese traveler to your hotel, you will have to learn and about their habits and preferences. Adapting to their needs and expectations is fundamental to success.

So, in order to penetrate this segment, enhance your hotel management strategy and start following these ten takeaways. Otherwise, they will simply pick another hotel that does …

PS: 1 more tip, but as we did not want to break the top 10, we put it here …

When traveling, Chinese prefer to spend more on shopping than accommodation. Yes, like to all Asian, shopping is a must. They spend a lot on buying European brands …

TIP 11: ADD SHOPPING INFO ON YOUR WEBSITE. A ROUTE OF DEPARTMENT-STORES OR LUXURY BRAND BOUTIQUES WILL BE VERY EFFECTIVE. ALSO INCLUDE DETAILS ABOUT THE CLOSEST OUTLET SHOPPING VILLAGE. SHOPPING PACKAGE COULD ALSO WORK WELL, EVEN THINK ABOUT PARTNERING WITH A LOCAL CHINESE PRIVATE SHOPPING CONCIERGE/GUIDE.

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

Hospitality industry tips? Use Demand Generators and what is the meaning of it?

In hospitality, meeting demand for goods and services is not only about meeting customers’ needs, whenever required; sometimes, a hotel or other type of hospitality business can create demand.

The best way to do this is by using hotel Demand Generators.

Yes, it sounds quite self-explanatory, doesn’t it! But let’s consider this in more detail…

Demand generator definition:
Demand can be increased by hotels (or, in fact, decreased during busy group booking periods or when refurbishing, for example), depending upon when they need or want to do this. They don’t have to sit and wait to see what customers will do (and therefore are at the mercy of consumer behaviour all the time). No. There is another way. A better way. And that is hotel revenue generators. When there is not sufficient demand to reach a good revenue result or occupancy the hotel can take action to generate more demand (shift demand to his hotel)

Examples of demand drivers are:

promotions (think via flash sales websites)
packages (sold directly via the hotel, ota or other channels)
discounts (stay 4 pay 3, stay 2 20% off)
Let’s look at this example:

A hotel in Portugal’s Algarve region does not have many bookings in the pre and after season, outside the main summer peak demand periods. So, the hotel management must find a way to attract customers during those times. The best thing they can do is create a Demand Generator, such as offering a reduced price deal, with lots of additional offers built into it.

‘Half-price rooms, with free breakfast!’ Now, that would be difficult to resist!

To make this even more appealing, the hotel could put a time limit on the offer: ‘This package is only available for the next fourteen days.’ This would encourage potential customers to book quickly, for fear of missing out on the promotion.

Psychology can also be used in Demand Generation by offering an Exclusive Package. That’s right; you don’t just have to cut prices to grow demand! Sometimes, by making people feel that they could become a member of a prestigious ‘elite club’ by joining other people on an exclusive holiday, that can result in increased (higher priced) bookings for a hotel, too.

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

Hotel Marketing Tips: Protect your hotel brand from brandjacking or Affliliate Brand bidding

CON AIR: WHAT IS BRANDJACKING?

The neologism brandjacking was coined over a decade ago, by astutely combining the words branding and hijacking. In our industry, when we talk about brandjacking, we usually refer to all those activities whose lowest common denominator is the exploitation of another company brand’s equity, such as the creation of fake social network profiles or mirror-websites. The most frequent use of brandjacking is, however, is the one that goes under the name of Affiliate Brand Bidding. This mischievous tactic consists in investing in search engines advertising campaigns and bidding on terms that are related targeted company. Ever googled your hotel’s name and found Booking.com, Expedia, trivago and TripAdvisor before your official website? Well, that’s ABB.

So how do we deal with this in our revenue management challenges?

Take a look at the Google Search for this hotel below. Whos is first? Is this what we want as hotels?

HOTELS: CHILDREN OF A LESSER GOD?
According to a recent study by MarkMonitor, the economic damage of Affiliate Brand Bidding in travel is estimated to be around 2.2 Billion USD because, while in almost any other industry companies are prevented from using this questionable strategy by the legitimate trademark owners, it is (unfortunately) common practice in our business. Online Goliaths such as Booking.com and Expedia, in fact, are not particularly worried about systematically hijacking hotels’ brands by redirecting traffic to their websites. Because of the almost-non-existent bargaining power that hoteliers have towards their distribution channels, in fact, it is no surprise that one of the many clauses of Booking.com contacts gives the famous OTA (and its subsidiaries) complete freedom to bid on the name of your property. Did you know that?

HOW CAN HOTELS PROTECT THEMSELVES
Renegotiating contractual clauses with OTAs and other distributors, therefore, would obviously the best way to go, even though it is, unfortunately, the most impervious. Another, more expensive but less complicated, solution is to bid on your hotel brand, using your official website as the landing page for the traffic generated by these campaigns (technically, this practice is known as brand protection).

A third, less known but extremely effective, method is to file a complaint with Google for trademark infringement. Let’s take a closer look.

The type of mark hotels should apply for is the word mark. This step is extremely important, because figurative marks (logos) are not taken into consideration by Google’s trademarks infringement team. The EUIPO website provides a simple step by step application form, where hotels can create and submit their application in less than ten minutes. It is crucial to know, anyhow, that one in five applications is opposed. So if you are concerned about conflicting trademarks, seeking legal advice is highly suggested. The mark is valid for ten years and it has a cost of 850,00 €, that should be paid in advance.

The complaint can be filed by the trademark owner or by third parties (consulting agencies, lawyers, advertising companies, etc.). In the latter case, the trademark owner must send written authorization to ads-trademarks@google.com , confirming that the third party is authorized to act on his/her behalf.

WHAT YOU CAN ACHIEVE
What next? Unfortunately, in recent years the legislative attitude towards Google advertisers has become more and more permissive. Just up until a few years ago, in fact, it was possible to ask for trademark protection at keyword level but, since 2010, it is no longer possible to prevent an OTA (or a review site, or a metasearch engine, etc.) from bidding on trademarked keywords. But not all hope is lost, on the contrary! Hotels can still protect their brands at Ad level: yes, OTAs can appear when a user searches for the hotel brand, but they can not use the hotel brand in the ad text (even though it may still appear in the display URL).

For ad campaigns targeting the EU and EFTA (Iceland, Liechtenstein, Norway, Switzerland) regions, the policy for trademarks in ad text applies, while no protection is possible for ad campaigns targeting Australia, New Zealand, US, Canada, UK, and Ireland. In these countries, in fact, AdWords advertising campaigns can include the hotel trademark in the ad text, hence the inutility to register one’s trademark worldwide.

Yandex, the main Russian search engine, is unfortunately much more permissive, asserting that Russian laws are “designed to encourage competition and freedom of economic activities”.

THE QUALITY SCORE
So, is it really worth applying for a trademark? Yes, it is. By preventing the use of one’s trademark in the ad, in fact, OTAs quality score in Google Adwords drops, forcing Booking.com et similia to bid more just to keep the same position on the SERPs or, if the quality score gets too low, preventing them to show the ad tout court. Google quality score, in fact, ranges from 1 to 10 and is an estimate of the quality of the ads and of the landing pages triggered by that specific keyword. A high-quality score indicates that Google believes that the ad (and its landing page) is relevant and useful to the end user and vice-versa.

CONCLUSIONS
Applying for a trademark is, especially if combined with a solid SEA strategy, the most effective way to regain control of one’s brand. And, according to Benjamin Sebagh, Technical Director at Creative Hackers, “Your Brand is your more precious asset”. And you don’t want it to end up on the wrong hands. Do you?

I think it is time that a Hotel revenue and marketing manager take charge of this issue. Trust me your web production goes up more than 10% if you control this well …. So nothing should be stopping you …

P.S. for more tips, check out our marketing plan for hotel industry

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

What is the meaning / definition of demand oriented pricing strategy in the hospitality industry?

In the Hospitality Industry, prices for services do not have to be permanently set. They can be adjusted, depending upon how many rooms, meals, etc. are needed by customers at any a particular time. This is what Demand driven Pricing is all about – the price of something changes depending upon how much demand there is for it at a given time.

So, you can see that dynamic Demand Pricing offers a lot of flexibility to hotels and other types of businesses in the Hospitality industry, which can only be a good thing!

Let’s look at a specific dynamic pricing strategy example:

A hotel in Wimbledon (London, UK) wants to make as much money as possible during the world-famous Wimbledon Lawn Tennis Championships. They know that demand for rooms and other services will be very high during that time in summer. So, they plan to increase their prices then, in parallel to demand escalation.

The economic ‘law’ of supply and demand is straightforward and universal. When managing revenue, making a pricing strategy Demand-Based is essential – a hotel can alter its room rates at different times of the year, instead of always being frustratingly stuck at one pricing level.

When demand is high, prices usually increase.
When demand is low, prices usually decrease.

Simple!

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

Hotel Mistakes; 5 common sins in Hotel Revenue Management

I have been in this hotel revenue management game for more than 2 decades now. And after all these years it still gets me anxious when I see hotels not performing at their full potential. So I have put together a list of 5 common mistakes made in revenue management in hotels, resorts and hostels.

Unfortunately, making just one wrong move can prove detrimental to your top and bottom line results. You could easily suffer less-than-stellar KPIs and lackluster market performance.

Here are several common mistakes we have noticed in hotels, to help avoid losing revenue potential in your hotel:

1. DON’T IGNORE TIME
It is imperative to understand your target segment typical booking window when rolling out an offer. Failure to do so won’t help produce your desired revenue results and may even cause a complete flop of a promotional campaign. Missing out on key booking windows, even by as little as one day, is a catastrophic mistake and can be avoided by taking advantage of dashboard and reporting features in revenue management software.

Timing is not the only thing that is essential here.

The Xotels team more than anyone else is focussed on ‘speed to market’. Time is of the essence. We aim to be more dynamic and work faster (more output) than our competitor hotels. Slow implementation times are costing money. Dynamics is what can get you ahead.

Make sure you also pick and choose actions that actually generate revenue. A lot of time can be spend on many topics. The question is however how much does it bring in return to the bottom line. Unfortunately in many hotels a lot of time is spent on meetings, actions and promotions that don’t generate revenue. So measure what works, and ditch what doesn’t.

Efficiency and effectiveness should not be underestimated.

2. FOCUS ON THE WRONG METRICS
We agree on the importance of the Room Occupancy, of the understanding the business demand, and the need of to tracking on the pricing of the competitors, but the key for success on Revenue Management is on analyzing the ARR (average room rate) daily while improving the occupancy.

Too much focus on only Occupancy or ARR (average room rate), could erode the business.

In the end the bottom line is what counts. So a Revenue Manager should always be tracking the impact on the NRevPar (Net RevPar) or GOPPar (gross operating profit per available room).

3. BEING AFRAID OF CHANGE
Failure to change rates can prove to be a major revenue losing mistakes made by hotels. Static rates prevent you from reaching your full revenue potential. Instead, rates should be changed often to reflect supply and demand in order to maintain a steady pace of bookings. Extraordinary high demand can throw an additional level of complexity into pricing decisions. Understanding that extra demand is not necessarily going to be on top of your typical business demand is essential.

Haphazard pricing is also a common downfall for managers. By merely relying on a “gut feel” with no analytics behind your decision, you are only increasing your chance of making mistakes as well as missing out on other increase of revenue opportunities.

4. NOT UTILIZING TECHNOLOGY
Hotel managers often fail to measure the impact of pricing strategy, something that can be easily achieved with the correct revenue technology and software. Revenue management software help you make data-driven decisions by providing vital information such as the booking history and details of rate discounts. With these solutions, managers can ensure they have a hotel revenue maximization while still offering competitive and attractive rates for guests.

Trust me when I say, the machine can help you uncover things you might not notice yourself that easily …

5. FEARING THE OTAS
Understanding booking patterns must also include gathering data from OTAs. While they may have been dreaded and feared by the hospitality industry at first, third party booking sites’ popularity gives hotel managers no choice other than to embrace them.

You have to use them to your advantage, as distribution channels. This means that you do not simply jump on the bandwagon with any promotion or feature they are trying to sell you (background article). But rather you pick and choose what coincides with the strategy you have laid out for your hotel.

As rule of thumb, make sure that you control your inventory and prices across all channels. You should not offer lower rates on more expensive 3rd party channels, than your own direct website.

Leverage OTA for global distribution and future demand trends, and stay in control!

The final word: lessons learnt on your hotel revenue management strategy
While it was a prosperous year for many in 2017, it’s also important to realize that success doesn’t come without continuous evaluation and data analysis. Hotel managers should utilize data, trends and technologies to their advantage, ensuring positive revenue results and business success for their hospitality business.

Using the right revenue management tactics and avoiding the above mistakes, will make your hotel revenue management strategy more successful.

Hope this has been helpful!

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

PMS System and Xotels collaborating to drive hospitality revenue management

We are excited to announce that Mews PMS System and Xotels are collaborating to drive hospitality revenue management to the next level! Hotel Scienz Revenue Management Software is developed by Revenue marketing Managers, for hoteliers. And we are actively building PMS interfaces.
Today, we are announcing the final piece of the puzzle getting Hotel Scienz integrated with one of the hottest cloud-based PMS offering out there – the Mews Commander PMS.

Did you know that the 90 percent of the world’s hotel properties still don’t use a professional revenue management solution despite the substantial revenue increase that it produces? And that the main reason behind is the belief that it is too difficult to handle? It is true that to run a professional revenue management strategy and execution, takes hundreds of pricing decisions, but the good news is that the entire process can be automated to help hoteliers to make not just better but also faster decisions.

At Xotels, we are committed to help independent hotels and resorts, private luxury hotels, youth hostels, bed & breakfast and campings on having the right and affordable resource to understand their own data, and to be able to manage their strategy of revenue management more effectively. This is the reason why HotelScienz was developed. Thanks to our revenue management software there is no need to understand complex statistics and scientific data because HotelScienz does it for you.

Xotels’ dynamic and affordable Hotel Scienz revenue management tool has been helping to boost yield across a vast range of properties, from luxury inner-city boutique hotels to youth hostels to beach and ski resorts.

The HotelScienz dashboard provides you with an overview of the most important KPIs, the pick-up, demand trends and the forecast; and the data is presented in easy-to-read graphs, charts and tables. As result of its algorithm calculations, it shows demand curves and price recommendations. And least but not last, it supports internal communication with the team and all stakeholders with a daily sales / pick-up report email, and month-end reports.

“We love finding ways to make our hotels more revenue and Xotels has been a leader in that very field with their ability to boost yield at hotels using smart revenue management algorithms,” says Mews Systems Founder, Richard Valtr. “It makes so much sense for us to be collaborating with the team at Xotels as, like us, they are passionate about upending the status quo and building dynamic cloud-based technology that is actually accessible. We are excited to be integrating them into the burgeoning family of apps that our PMS is able to offer to properties of all shapes and sizes.”

“Our growing management portfolio and our non-stop search for continuously improving technology has led us to the conclusion that the best way to move forward is to partner with companies that are experts leaders at their niche to develop together the final product that can completely satisfy our customers. We are working with the Mews PMS in various hotels in different countries, and our revenue managers love the agility of this cloud based system. It provides very good options to implement a dynamic and complex yield strategy.” Remko West, founder of HotelScienz and Xotels says.

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

Record Performance for (luxury) Independent Hotels in 2017

Looking back at 2017, it was an incredible year for independent hotels. We have measured record performance levels at Xotels. Financial results based on revenue management strategies have never been higher.

So, let us run you through 2017 at Xotels …

Total Revenue €190.295.324

Rooms Sold 1.836.117

68 Hotels

We have grown our international hotel client portfolio by 39% and turnover by 26%. An amazing year …

We have also expanded into new markets like the Czech Republic, Portugal, Italy, Greece, Curacao. Highlights in the new additions are:

San Domenico Palace – Taormina, Sicily  (a 5 star, Leading Hotel of the World)
SafeStay Hostels – a youth hostel group
Almalusa – Lisbon Portugal
Hotel Himalaia – Baqueira Beret, Spain (ski resort)
BnB Manager – vacation rental apartments

As you can see we are expanding both into 5 star luxury as well as more budget products like youth hostels and airbnb type vacation rental apartments. Revenue management adds value for any lodging sector.

Lets look at some of the room revenue calculation and TRevPAR growth results we have achieved, of which we are extremely proud of course:

Destination: extreme Revenue Growth

1           Bruges, Belgium          62%
2          Mechelen, Belgium     49%
3          London, United Kingdom          36%
4          Porto, Portugal             32%
5           Edinburgh, United Kingdom    23%
6          Paris, France   21%
7          Seville, Spain  20%
8          Zanzibar, Tanzania       17%
9          Ibiza, Balearic Islands   18%
10         Maastricht, Netherlands         16%
11        Brussels, Belgium        16%
12        Granada, Spain 16%
13        Prague, Czech Republic           15%
14        Amsterdam, Netherlands        15%
15        Santiago de Compostela, Spain 14%
16        Barcelona, Spain         13%
17        Sicily, Italy      13%
18        Barcelona Spain          13%
19        Mallorca, Spain           12%
20         Seychelles      12%

Whether it is in primary markets, like London and Amsterdam or secondary destinations in Belgium, Spain and the Netherlands, with the strong demand, Occupancy and ADR can be driven up with strategic revenue management.

We see this working in both 5 star, Leading Hotels of the World, like the San Domenico Palace in Taormina Sicily, with a 13% increase in turnover, but also for youth hostels like SafeStay, or Ladys Mile holiday park in the UK with 36% revenue increase.

Unfortunately Barcelona did not end up as expected. The market was trending up 25% year over year, however the political instability in Cataluña has pulled down annual growth to 13% only, due to heavy revenue declines in Q4. But thankfully Brussels and Paris have started the route of recovery after suffering from terrorist attacks in 2016 and 2015.

Yes, we are pretty excited about what we have achieved in 2017 with our international portfolio of independent hotels.

And 2018 is not looking to change our growth trend. We are looking at onboarding a good amount of new properties, supporting investors even more in generating an ROI on their hospitality assets.

Besides providing strategic revenue management services to hotels,  we are also a boutique hotel management company, running operations and finance.

We are looking forward to what 2018 will bring us in terms of global expansion. The latest project we are working on is the opening of a new 5 star boutique hotel in Paris. We will update you soon on our adventures at Xotels …

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

 

Posted in Hotel Management

How hotel revenue tools Drives Profits for B&Bs, Small Hotels & Vacation Rentals

Hotel revenue management has seen spectacular growth in recent years. It has become such a fundamental part of hotel business strategy that it is now on an equal footing with marketing and sales in many hotels, and it is driving hotel profit growth.

Both chain and independent boutique hotels are turning to revenue to help drive hotel performance management in an increasingly competitive sector.

Although while the hotel sector enjoys the benefits of revenue management, there is still much room for other types of accommodation providers, including B&Bs and vacation rentals to adopt revenue management. Smaller hotels too are yet to embrace it to the same degree as their larger lodging counterparts.

Of course, this is due in large part to tighter budgets, but it is important for managers and owners to consider that it is an investment whose purpose is to produce greater returns.

Here at Xotels, we have seen the results speak for themselves for other types of accommodation provider, including holiday parks and camping sites. It is however important to note that while there are similarities, there are also a number of key differences to do with revenue management among different types of accommodation sector. Vacation rentals for instance have complexities that the hotel sector does not have to face, and a good system reflects this.

How revenue management helps small accommodation providers in 3 main steps

By focusing on three main areas, revenue management helps to drive success for small hotels, bed & breakfasts and vacation rentals. These three areas are inventory management, pricing tactics and measuring hotel performance.

 

  1. Inventory tracking management refers to optimising occupancy levels and room rates, dictated by market supply and demand. Your rooms are your key revenue driver – your most valuable asset – and therefore, revenue managers focus first and foremost on extracting as much value out of them as possible while minimising costs.

A good revenue management strategy increases your distribution channels and ensures that no double bookings take place with automated updates through a channel management system or 2-way interfaces. This minimises human error and increases efficiency across the board.

 

  1. Pricing tactics include all methods used to drive bookings at all times of year (and even the day of the week and time of day), and sales from elsewhere in your establishment, such as the BAR.

These include price changes based on market demand, which leverages market data analytics. Other tactics include cross-selling and upselling, and different rate sets to drive bookings. For instance, these should include regular rates, promotional rates, package deals, group rates (which should offer a discount for bulk booking) and last minute bookings.

 

  1. Performance measurement is crucial to see where refinements can be made. For small accommodation providers like B&Bs and vacation rentals, budgets tend to be more limited. For this reason, it is absolutely critical to measure your success on an ongoing basis. Your PMS should be set-up effectively with segmentation and channel source codes to demonstrate where your revenue comes from. This way you can evaluate where you can implement improvements. A reservations system is fundamental in producing precise on-demand data and automating much of the process.

The final word

Competition levels are on the rise, notably from AirBnB and other peer to peer platforms, OTAs and rival hotels. In an ultra-competitive accommodation sector, B&Bs, vacation rentals and small hotels have to adopt and master new tactics to remain competitive.

Technology-based solutions are now replacing legacy and manual systems, and the small accommodation provider that neglects to consider them runs the risk of falling behind. On the other hand, fully embracing technology-led solutions like a revenue management system can offer your establishment an essential advantage and help drive your profits to new heights.

For your reference, at Xotels, we have taken on the Revenue Management for various small hotels and bed & breakfasts. We have seen increases of financial performance of 20% revenue growth and above. Yield management, online distribution and digital internet marketing are key parts your property needs to master, to be competitive and drive topline revenue and bottom line profit. If you need some support, we would gladly be of help …

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management

Foster your Direct Hotel Booking Strategy to Reduce OTA Commissions

Here is the fact, Direct hotel bookings have become a key objective for hotels large and small, and is one of the top recommendations at an efficient Revenue Management strategy. In an ultra-competitive sector, through moving room reservations away from online travel agencies (OTAs) and other third parties, direct hotel bookings make possible to take advantage of important opportunities such as repeat bookings, cross-selling and up-selling, and increased brand loyalty, which all ultimately lead to higher revenues and higher profits.

Does your hotel rely on OTAs for bookings? Would you prefer to have more reservations made directly with your hotel? In this article, we look at what your hotel can do to take the initiative back from OTAs (and your competitors) and implement a successful direct hotel bookings strategy once and for all.

  1. Forget about the classic loyalty programmeIndependent Hotels yet to focus on direct bookings as part of their overall business strategy can learn from the chain groups that have already invested in their own programmes to drive occupancy levels and customer loyalty. Brands such as Hilton, Choice Hotels and Marriott have reported positive results so far with their own respective direct bookings process. Hilton, as an example, added nine million more members to its loyalty programme in 2016. Loyalty members drove 56 percent of the hotel’s system-wide occupancy rates and web-direct and mobile bookings were up by 200 basis points compared to 2015. By starting your own loyalty programme, you can include incentives to drive repeat bookings such as discounted room rates.

But, will the loyalty program of a chain work for an independent hotel? Obviously not, because boutique hotels with unique hotel concepts have refined customers who look for smart deals that amaze them. For more background on our thoughts on this topic, have a look at our article hotel loyalty programs.

Through cross-selling, you can also offer promotions across the hotel, advertise additional services, products and member-exclusive package deals.

Tip: Consumers nowadays are looking for an instant reward, and don’t really like to save up points or credits. So why not simply give them a 5% discount option to sign up for. And make sure it is available directly (don’t let them wait for the sign-up confirmation email).

  1. Squeeze your communication channels

From email marketing to social media, and from hotel review websites to your own website, the success or failure of your direct bookings strategy will depend in large part on the effectiveness of your ability to harness the communication channels at your disposal.

Your hotel marketing plan and strategy can include a focus on advertising your loyalty programme on social media and via email with a focus on driving customers directly to your website. You can invest in online targeted marketing, including the use of paid campaigns on Google and social networks. Your email strategy should include an after-sales correspondence campaign to increase guest engagement, generate feedback and drive future bookings. For a direct bookings strategy to work, it needs investment, which could end up being less than the commission that you pay OTAs with more profitable results.

Tip: Send a post-stay email requesting a guest review on TripAdvisor or Google, and include a discount code of 10% off for their next stay (which can obviously be shared with their friends and family).

  1. Let every detail be covered by a innovative hotel concept

Ask yourself, why would a guest want to return to our hotel instead of shopping around for somewhere else? What do we offer our guests that sets us apart? Do we offer an experience rather than a service? Do we have a unique history, a unique food menu, or other unique selling points (USPs) such as our hotel’s settings that can drive direct bookings? If you cannot reply yes to these questions, you clearly need to work on an innovative hotel concept.

Your USPs differentiate you from the rest and they can persuade a guest to book directly with you rather than visit an OTA to consider the competition.

 

Tip: Start with using your room-types as sales tools to position your hotel uniquely.

  1. Turn your customers into brand ambassadors

By offering current guests an incentive to recommend your hotel, you can drive direct bookings. An incentive can include anything from a discount on a future booking; an exclusive offer for other hotel services such as a meal, a relaxation session at the spa or a round of cocktails at the bar. You can go further and throw in a free diner if a recommendation leads to a booking, and so forth. What it all comes down to essentially is your cost of hotel customer acquisition. It might seem an expensive option at first to incentivise recommendations, but when you compare it with other sales and marketing (advertising) costs, a referral programme can often be an inexpensive method to drive direct business and, accordingly, to increase your REVPAR.

Tip: When connecting to the Wifi of the hotel, request a share with a pic or video on FaceBook, Twitter or Instagram …

  1. Put to the OTAs on its right place on your revenue management strategy

While many hotels have reported positive results from their direct bookings strategies, it is also critical to understand the essential role that OTAs still and will play. Many hotel customers are open to, and interested in, joining loyalty programmes and booking directly, but there is also a large cohort of customers who prefer to book via OTAs.  In addition, OTAs offer customers a quick means of carrying out research and comparing hotels. There will always be guests who prefer shopping around, despite best efforts to nudge them towards direct bookings. These OTA guests go a long way to filling occupancy levels, particularly in times of low activity, and their importance to the success of your hotel cannot be understated.

However, your hotel should follow its own strategy when it comes to pricing and distribution, and not pay too much attention to the ‘commercial’ advise of the OTA market manager. At no time should we give 3rd party channels rates that are lower than we have publicly available on our own website.

Tip: So this means no discounts for loyal OTA members (read Booking Genius etc), or other schemes and programs. They are designed to undercut your public BAR rate. So simply don’t do it if you want to grow your direct sales.

  1. Best Rates Direct

A good percentage of customers say they ended up booking through an OTA because they assumed (and because they did not check it) that the hotel website would have worse price or conditions (type of bed, payment method than in OTA).

That’s why hoteliers should do everything possible to highlight the advantages of direct booking on their website instead of the OTA.

Tip: Mention it clearly on your website, booking engine, emailing and advertising that to get the best rate they need to book with your hotel direct.

The final word: Foster your direct hotel bookings strategy to drive you hotel revenue

Direct bookings strategy has become essential to hotels, hostels and resorts around the world and it offers ample growth opportunity and client retention for independent hotels. It should be crucial at our revenue management strategy, turning one-time guests into loyal, repeat customers.

Be loyal to your own hotel concept. Lead your booking channels. Make your guests love you and recommend you. Spread hotel uniqueness… And see how your direct bookings and your hotel revenue increase.

And to show you it works, we will shortly share case studies of our best performing hotels which achieve over 50% direct sales.

Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.

Posted in Hotel Management