Best Practices for Increasing Conversions, Length of Stay and Average Rates
By Glenn Pedersen President, Encore Enterprises | December 05, 2010
An Introduction – The "Roller Coaster" Effect
The hospitality industry is realizing momentum that didn't exist a year ago. According to a study released by Smith Travel Research (STR) on July 30, 2010, RevPAR in the U.S. hotel industry during the first six months of 2010 increased 8.6 percent over the same period in 2009, where rates were down 15 to 17 percent. While this roller coaster effect in the market is indicative of a recovery in the hospitality industry; we are not out of the woods yet.
The cyclical nature of the hospitality market and the resulting volatility of revenue streams means that hotel operators should continuously reevaluate and update their revenue management protocols and for selling and up-selling. By doing so, they can successfully build and maintain a structure that help keep rooms filled to capacity and increase conversions. This is an opportunity for organizations to implement processes that help their properties not only stabilize in soft markets, but also maximize long-term performance. The following best practice tips explore options to assist hotel operators optimize revenue management efforts.
1. Automate PMS call centers to increase efficiencies and revenue
Call centers are often overlooked pieces of the revenue-generating puzzle. During both good and bad economic times, it is critical to keep rooms filled to capacity. But the sole objective for the senior management of any hotel chain should not just be to simply fill rooms, but rather to implement a series of firm protocols for selling and up-selling, thereby bringing structure and a strategic approach to the process and ultimately improve profitability. Marriott® is one example. The front desk associates at Marriott brand hotels are not trained to take reservations or to up-sell to customers. Rather, the associates refer booking inquiries to one of Marriott's 16 PMS reservation centers around the world. With Marriott's worldwide pipeline of hotels under construction, awaiting conversion or approved for development close to 95,000 rooms, it makes fiscal sense to route reservations through the sophisticated network of PMS call centers in order to maximize the chances of increasing conversions via s longer stays and larger profits.
2. Realistic forecasting