There are many factors that measure the success of a hotel, including how it’s featured on social media, how its reputation is viewed, and how often guests return for further stays. These are very valuable ways of assessing the business, but when it comes down to hard metrics, the Occupancy Rate is one of the most reliable measures, and it’s a very simple calculation: Divide the number of available rooms by the number of booked rooms, and you have the figure. The higher it is, the better!
We all know that hotel bookings are dynamic, depending on many factors such as the season, and whether any special events are taking place in the area. So it’s down to the management of each hotel to decide over what timescale occupancy rates are measured - be it weekly, monthly, or quarterly. What’s for sure is that measurement is needed, because otherwise it will never be clear whether a slump or a sudden rise in occupancy is a blip or a trend. Either way, by being aware of what is happening with occupancy rates in hotels, it’s possible to combat any drop in rates, and capitalise on indications of rises. Hotel occupancy rates are crucial as they directly reflect the level of demand for accommodation. Higher occupancy rates indicate a healthier business, as they imply more revenue generation per available room:
- Revenue generation - Higher occupancy means more rooms sold, which translates to increased revenue from room rates, as well as additional offers such as dining, spa, or other facilities.
- Cost efficiency - Hotels often have fixed staffing numbers and rotas, but higher occupancy often leads to better cost efficiency because staffing, utilities, and maintenance costs are spread across more occupied rooms, resulting in higher profitability.
- Market confidence - If a hotel is showing consistently high occupancy rates, this can encourage investment or loans to make improvements, so that the business is grown faster. If there is strong demand, then all the more reason to expand facilities.
Why are there peaks and troughs in hotel occupancy rates? Well it’s not possible to have an Olympic Games in your city every month, and there are times when guests simply don’t feel so keen on venturing out - for example if the weather is predictably bad. But it’s possible to be proactive in devising strategies that can boost the low periods, and make the most of high occupancy times too.
Defining your hotel's reputation, and managing it
The reputation of a hotel is one of its key brand values. Reputation takes time to build and is easy to get damaged, but it’s one of the most important assets any hotel has. What is your hotel brand? If it’s one of a chain then there are likely many brand values already in place, but even then, individual hotels within a chain can establish what makes them unique. It may be location, historical connections, a star chef, or special spa offerings.
An independent hotel has even more freedom to establish what its brand values are. What do you aspire to, and actually achieve? How do you communicate your values to potential guests? Careful consideration and brainstorming with your staff can help define what the strategy of your hotel should be, so that your reputation can be built on that. Go well beyond simple aspirations such as ‘Luxury’ or ‘Quality’ and drill down into what your hotel’s reputation is really founded on.
Communication, communication, communication
Knowing what your reputation is must be clearly communicated. And if it seems that your reputation in the market is poor, then that must be addressed. What are reviewers and previous guests saying about their stay, and what can you learn from that?
When you understand how your reputation is viewed, then reach out by strong communication which reinforces your brand values. This means using social media effectively and having a modern, well-functioning website. It means all the back office and front desk processes must be humming along, so that every guest has a pleasant and trouble-free experience with your hotel. And if there is ever trouble, then it means resolving it swiftly and learning from whatever mistakes were made. Also, congratulations and positive comments from reviewers should be shared on social media, with specific thanks to the person posting the comments.
Know who you are communicating with
Clear communication and reputation management are vital, but who exactly are you communicating with? If your answer is ‘everyone’, then your marketing needs to get a whole lot more focussed. Modern Property Management Systems provide masses of data, which can be easily accessed to show many details of the most ‘typical’ guests in your hotel. You’ll know their age, where they come from, whether they have family with them, their general interests (and perhaps their reason for visiting your area), along with how much they spent in your hotel, and on what. The more you know about your existing guest profiles (and you can know a great deal), the more you can communicate directly with them. That means more focussed and useful marketing activities.
So, with these points in mind, let’s take a look at some of the proven approaches to increasing the occupancy rate in hotels:
1. Targeting
Once you know your demographic, you can target them much more accurately - in social media, across the web, and on your own website. For example, it’s likely that retired couples are looking for something different to Digital Nomads or Bleisure travellers, so if you already know your primary demographic, go after them first with targeted communication. This includes telling them things that you know they will appreciate and need. Perhaps retired couples want quiet and light exercise facilities, while younger guests will be looking for blazingly fast wifi, and probably plenty of good coffee on tap! While it may seem obvious to you as a hotelier what your offering is, that isn’t necessarily communicated in a targeted way to your chosen group. Make sure it is! The simple truth is that no hotel provides ‘something for everyone’: You can’t be luxury and economy, or youth-oriented and elder-aware. Yes, cover some of the bases, but admit that pleasing everyone all the time is not possible, and target the guests that will bring maximum occupancy rates, and will smooth out the dips that are currently not in your control.
2. Packaging and promotions
Every hotel has something to offer its target demographic, so encourage your potential guests with special packages or promotions. This does not mean undercutting your rack rate to attract business, but creating different or special offers, depending on the season, or local events. Be attuned to what is going on in your area and get thinking in advance about how you can leverage this. Often big events (we’ve already mentioned the Olympic games, and events don’t come much bigger than that) come with their own massive marketing and media presence, so it doesn't take a lot to latch onto the existing publicity. Whatever is going on, ensure that your target audience knows about your offer - if it fits with your profile, and theirs. A promotion can offer discounts for stays, but more importantly shows that you understand the needs of your guests. Target their interests, and your promotions will pack a punch that results in increased occupancy rates.
3. Partner effectively with local organisations
It may feel like a tough call for hoteliers to create promotions and special offers while undertaking the many other daily tasks they must accomplish, which is why partnering is so important in helping increase hotel occupancy rates. There’s no need to do all the heavy lifting if you use the channels and media connections of other organisations and businesses. Twin-up with a local vineyard for a wine-tasting promotion, or partner with a history society to arrange tours to fascinating places connected with the past. Recruit the services of individual mentors such as yoga teachers or artists to run courses from your hotel. Think about what you have locally, and how to connect with people whose skills you can use for a win-win-win. That’s three wins: for your guests, for the local suppliers, and for your hotel.
4. Repeat business is great business
The idea of courses and activities which can be repeated and marketed to the same people is very attractive. Once a market segment has been identified, you have an inbuilt interest group that can be encouraged to return for more of the special promotion or package that attracted them in the first place. Let’s say you launched a successful summer painting course with local artists… Do it again as a winter special, then again in the spring. Once the value of an activity is proven and your hotel’s reputation is established in this field, guests can be encouraged to return again and again. Only slight ‘tweaks’ to the format might be needed to attract even the same guests as before (such as seasonal art courses), and the beauty of this is that your marketing effort is minimised, as you already know the contact names and details of many people registered in your hotel’s PMS.
5. Flex your marketing efforts
One size doesn't fit all, and there is no such thing as a single guest ‘type’. In recent times personalisation has become an increasing trend in the hospitality industry, where guests expect a very individual experience from their hotel of choice. With modern technologies this is entirely possible, with personalisation of initial messaging, right through a guest’s stay, and onwards through post-stay. Because of this ability to target, your marketing efforts shouldn’t be ‘one size fits all’ either, but need to flex at different times of the year, according to demand and local events. If there is a massive sporting event or concert coming up, then it’s safe to assume that demand will be high for rooms within your target demographic. In which case your marketing will pivot to answering questions about why your hotel is the best fit for guests at this time.
Seasonal events also need specific marketing approaches. Diwali or Christmas are times of high demand, but don’t just assume that guests will find their way to your door: Sculpt and flex your marketing efforts to reflect the season and guest profiles that you wish to attract. Often the key to successful marketing is simply about looking ahead to see what is upcoming.
6. Spread the word
The most powerful marketing comes from spreading the word of guest reviews on social media, and through Online Travel Agent channels. Making the ecosystem of guest reviews ‘sing’ involves proactively curating your social media presence. That means regular postings, and reposting positive reviews. It means thanking guests for great reviews, and always responding to apparently negative reviews, politely but firmly. If ‘negative’ reviews make a valid point, then learn from them and ensure that not only will mistakes not be repeated, but that your audience knows that you have taken action. Spreading the word is easier than you might think, and requires steady interaction with your potential and actual guests. By being in a dialogue with guests you are demonstrating your interest in them personally, and showing that their reviews matter. It’s all part of upping the occupancy rate of your hotel.
7. Strengthen your direct bookings
The OTA ecosystem has hugely changed the dynamic of how people find and book hotels, but we are now seeing a tipping point, where the possibility of direct booking is increasingly undertaken through a hotel’s own website. This is the well-observed ‘billboard effect’ where initial searching is done through the Online Travel Agents, but then the actual booking is achieved directly through the hotel’s website. There’s a large caveat here though: That’s if the hotel’s website functions smoothly and efficiently, and can take payments and all booking details. If it does, then the bottom line is boosted by not having to pay fees or deductions to the OTA channels, and guests have a direct connection with the hotel of their choice.
8. Ensure seamless hotel technology
Guests who can engage directly with the hotel and who experience a smooth process - from initial enquiry, through booking, and into their stay - are highly likely to post positive reviews, and to return for repeat stays. High-level seamless technology goes a huge way in promoting a great guest experience, whether from using multi-lingual chatbots to respond to Frequently Asked Questions pre-booking, or having systems that accurately record all guest details, including personalised needs, and which can accept direct payment and track all billing in-stay.
We are SabeeApp, and for over eleven years we have been providing seamless technology specifically tailored to the global hospitality industry, with our cloud-based Property Management System, and additional sophisticated and comprehensive Smart Solutions. Hoteliers using our PMS and apps increase profitability, and enhance their ability to create and maintain higher occupancy rates. We’d like to show you how this is possible with a free, no obligation demo of what SabeeApp can do for your hotel, and how we can help you boost occupancy rates.