5 Ways to Increase your Hotel’s Revenue Per Room

accommodation - Saigon/HCMC: March 22, 2016

Revenue Per Available Room, or RevPar for short, is a crucial metric for any hotel. It’s a simple formula...

RevPar = total rooms revenue / total rooms available

… but the number you get is a good indicator of how well you are utilizing the value of your rooms. Let’s add to this another very important term: RevPor, which is money spent per occupied room. This is necessary when tracking how much people are spending on amenities - are they raiding their minibar and indulging in room service? RevPor is a useful indicator, especially in Vietnam where there are many niche hotels who need to watch their numbers closer than most mass market hotels.

Photo by: Intercontinental Asiana Saigon

If you’re paying close attention to your hotel’s booking patterns, RevPar and RevPor can determine what move you should make next to maximize revenue with your rooms. There is no concrete RevPar or RevPor that you can really aim for year round - the bigger the better of course, but this really depends on room demand during the season and other external factors.

Citypassguide.com consulted several industry professionals to finalize a list of five great methods to maximize both RevPar and RevPor. Get the most from your rooms this season:

1. Ramp up room benefits

Executive Lounge – Photo by: Hilton Hanoi Opera

Perception is reality, and if people perceive that a room is worth more than what you’re charging then it becomes an easier buying choice. This can done by adding exclusive benefits to certain rooms. For example, get the Executive Standard and get access to a private lounge with free refreshments and free flow drinks during fixed hours; free late checkouts; complimentary in-room breakfast; discounts on services like the spa or at certain F&B venues; or anything else that you can offer. While none of these are large investments, the person perceives these benefits as special treatment and values the room more than something similar but without the benefits. Ramping up room benefits is an excellent way to increase your RevPar.

2. Jacuzzi bonus

Jacuzzi – Photo by: Six Senses Con Dao

How many movies and shows have you seen where the characters enter a hotel room they can’t afford and get excited over the jacuzzi in the bathroom? No matter how overhyped, jacuzzis are what people think of when they imagine a luxury suite, a special treat they can only afford during special occasions. A jacuzzi room can be a lot more appealing to travellers than a “shower” room. Especially during colder or rainy months. This simple addition can change a regular room to a room with a taste of luxury.

3. Give them options - but limit their choices

Room with Welcom Fruit – Photo by: Eastin Grand Hotel

People like options, but they also like being told what to get. Using other items mentioned on this list (jacuzzi rooms and rooms with added benefits, for example) you can create more room options for guests. The next step would be to direct these rooms at certain demographics - if the Standard Room is now the Executive Standard, and couples have been flooding into the Standard Room this season, paint the Executive Standard as a honeymooner favorite, or something similar. This way, you get the added benefit of giving more budget options for travellers while promoting your “enhanced” rooms.

4. Stop sucking up to OTAs

Yes, there are plenty of travelers that head over to Agoda or TripAvisor or Booking.com without even looking at a hotel’s website. This can lead fearful managers to abuse their reliance on OTAs and neglect the fact that in the long-run, a balance between OTAs and direct bookings via website and phone is more profitable. This is because people on OTAs are looking for the cheapest option - meaning they are less likely to get room service, buy a bottle of wine, or even dine in the hotel. Many rooms on Agoda don’t even include breakfast - guests will be going to town to eat, not opting to laundry their clothes in the hotel, and avoiding the minibar like the plague. This is a big hit to RevPor.

5. Play with the length of stay

Photo by: Hotel Equatorial

If people are staying for a minimum of five to seven days in your hotel, give ‘em extra. Not only are they more likely to increase your RevPor by getting in-room dining and scouring your F&B outlets and spa facilities, but you will decrease maintenance costs as linens and disposable toiletries will have to be changed less. In-room breakfast, turndown amenities, better bathroom soaps and shampoos, gift baskets, welcome fruits and chocolates - these small investments make longer stays more attractive. And longer stays guarantee filled rooms, reduce costs and up both RevPar and RevPor. What’s not to like?

Post By: Aleksandr Smechov

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