A burning question on every property owner’s/manager’s mind is “how do I increase my revenue?” To achieve this goal, it simply isn’t enough to increase occupancy by selling rooms at a lower rate but rather focusing on increasing your RevPAR. So, here we will discuss what exactly RevPAR is, why it is important, and ways in which you can increase this metric to improve your overall revenue.
But first…what is RevPAR and why does it matter?
Revenue per available room, or rather RevPAR, is a key metric used to gauge financial and business performance for those in the hotel industry. The metric considers both room revenue and occupancy rate, making it a key factor in determining the overall performance of a property. Measuring both average daily rate and the ability to fill rooms, RevPAR paints a clear picture of your property’s current performance.
RevPAR matters to your property by helping you realize when you’re spending too much per room, compare the profitability of each room type and indicates if your rates are too high.
So, now that we’ve determined RevPAR is important, let’s see how you can take steps to increase it.
Adjust the length of stay
Consider adjusting the average length of stay. To help increase your occupancy rate implement a minimum length of stay (accept longer-term stays instead of shorter-term bookings) or a maximum length of stay (allow guests to the only book at a discounted rate for a maximum length of stay).
Less reliance on OTAs
Do not fall into the trap of allocating most of your inventory to OTAs so you can fill up your rooms. While you may have increased occupancy, you could see a dip in revenue if they are selling your rooms at discounted prices. Additionally, OTA commissions will take a large bite out of your profitability, so even if you do increase your revenue and your occupancy, you are diluting the value of that extra revenue. Instead, enhance the perceived value of your rooms by offering special packages or enhanced room offerings. It might be that by charging a higher rate and filling fewer rooms, you’ll see an increase in revenue.
Enhance room offerings
Consider upgrading your room offerings. For example, add in access to a private workspace or lounge to increase the perceived value of the room. This can give you an opportunity to increase your rates across different market segments.
Cancellation rates
Avoid high cancellation rates by offering more non-refundable reservations. Adding non-refundable reservations could help increase your occupancy and reduce your cancellation rate.
Invest in digital marketing efforts
Investing in digital marketing efforts is essential to be found online amongst all the noise out there. Having a strong online presence is key to driving more direct bookings and improving your website’s conversion rate – all of which contribute to an increased RevPAR.
With rezStream’s digital marketing services you will have access to proven marketing tactics to improve your online visibility, drive quality traffic to your website, and increase direct bookings.
If you are interested in learning more be sure to email marketing@rezstream.com to speak to one of our account specialists who can help customize a program for you.