The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.
Michels & Taylor’s Five Methods to Increasing Your Revenue per Available Room (RevPAR)
A common problem often facing hoteliers is how to increase revenue per available room. Jesper Johansen, Revenue Director Michel’s & Taylor Managed Hotel division, has provided his tried and tested solutions to this age old problem.
Although considered second nature by most modern revenue leaders, the adoption of length of stay (LOS) restrictions is the still the most effective way to increase revenue per room. To make a length of stay strategy even more effective, try implementing it through rate levels or market segmentation. However, to implement this strategy successfully requires the hotel to understand its booking patterns correctly.
Using one of the many hotel industry benchmarking tools, understand your current position within the marketplace. Use this data to identify whether there are opportunities, either in volume or through rate changes.
Hotels which tend to offer a variety of different room types can often benefit from reviewing the additional supplements for them which pose superior price points. By doing this, revenue can be increased with little or no impact on the volume of paid upgrades. In other cases it can actually narrow the price difference between room types, increasing the volume to a higher level. By measuring the RevPAR alongside the room type the hotel will be able to measure the success of these supplement changes.
Reviewing a room type and its attributes, for example the view, a balcony or a Jacuzzi can allow a hotel to introduce new room type levels within a current room type category, and as a result charge a supplement.
By enhancing the offering in which a room includes, for example, access to the executive lounge or a solarium, a hotel can increase the perceived value of the rooms. As a result this can give a hotel a greater opportunity to increase the rates across various market segments.
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