Every hotel faces challenges. Whether it be difficulty finding and retaining staff, low demand periods due to seasonality, group wash or managing the business mix, hotel management can be an uphill battle. But small hotels located in large cities face unique challenges as well. Low demand hits harder when costs are distributed across fewer rooms. A limited marketing budget and reach means a higher dependence on OTAs which reduces the bottom line. Reviews, and therefore service, are of utmost importance as one bad review will have a bigger impact on the hotel reputation more greatly than a larger hotel with a higher quantity of rooms. Finally, a smaller hotel is typically run with fewer staff, at times even a sole operator, making yield management next to impossible.
Understanding the complexities of small hotels in big cities and their competitive landscape is something Rate Yield’s revenue managers are experts at. Here are some of our tips:
- Don’t sell out too early. Offering discounts to secure bookings in advance has the advantage of securing non-refundable revenue, however larger hotels are more likely to increase rates as their occupancy levels rise.
- Don’t wait to the last minute to sell rooms, larger hotels may try to sell distressed inventory at low rates at the last minute, make sure you are not in a position to compete on price in short booking windows.
- Set differentials for your different room types and be sure that these are dynamic. For example, rooms with two beds are in high demand for families and leisure travelers but may not be the required room type for business travelers.
- Understand review scores when picking your competitive set and where your property fits in.
- Maintain price integrity – you have costs, and your reputation is important. Don’t drop your price for no reason. Be competitive but understand your value.
- Yield according to your market and your occupancy levels along with your targets. Manage your rates on a regular basis to be sure you are still competitive with your comp set.
Revenue management can be a full-time job. Luckily, companies like Rate Yield offer revenue management software that will automate all these aspects for you.
About Rate Yield
Rate Yield was created in 2019 by seasoned Revenue Management consultants with over 30 years of experience within the field. Rate Yield RMS was designed to adapt to small hotels, inns, and resorts as well as large hotels in city centers. With settings and thresholds that can be modified against a hotel’s unique market trends, Rate Yield makes it more accessible than ever to implement AI in revenue management strategies. With real-time insights, agile strategy development, modules for budgets and forecasts, as well as a tool for displacement analyses, Rate Yield provides a robust and well rounded software that will help your hotel to yield more revenue, period! To learn more, visit us at www.rateyield.com