Hotel Revenue Management — It All Starts in The Pre Opening Stage!
Planning to set up a hotel? You probably would have a lot to do! The pre-opening stage of a hotel, the most important one, usually starts 12 to 18 months prior to its actual launch. The time period is precious, where multiple systems and processes needs to be put in place, and the functioning of each can be well tested to see what would work and what would not. Put your thinking caps on, and start check listing — this is perhaps, the right time.
Thorough research, insightful market survey and tons of groundwork at this stage goes a long way in ensuring the success of the planned endeavour. One of the key ingredients here is the development of an efficient revenue optimizing strategy, besides countless other items in the list, which clearly needs to be ticked to ensure a big-bang entry in the market.
Certainly, it is a good piece of news for the industry and the travellers that a new hotel is coming up in town; the expectations seldom go pretty high. However, setting up a hotel is not an ordinary task that can be performed overnight — it is a tedious process, a wide field to be crossed, in order to reach the final destination.
The pre-opening stage of a hotel, therefore, is the most critical one, which could decide the fate of the hotel forever.
First, let us make it clear it is certainly more than just designing fancy rooms and attractive interiors and increasing the footfall. Planning to set up a hotel starts with creating and designing a right revenue management strategy, the planning of which should begin no later than 12 months prior to opening. To ensure a sure shot success, it is important that all the items of the pre-opening checklist are revenue optimized.
Bundle of things to do, one after the other. Below is the list of the most important things to concentrate on during the most critical phase of pre-opening.
- Create a website — Launching the website could be the first step of the pre-opening stage, and one surely does not need to wait for the launch of the property to do the same. In fact, as soon as the planning to set up the hotel is being concluded at the preliminary stage, it is advisable to launch an introduction website, giving out some details about the hotel’s facilities and the opening date, which could tickle some excitement amongst the travellers about the new property and pave its way forward. Keep posting relevant content and articles/ blogs on the website to ensure continuous engagement from day one.
- Start working on the SEO activities — In the highly competitive environment of today, where hotels capture about 90% of their reservations online, it is simply impossible to give Search Engine Optimization a miss. Well, you definitely would want the name of your hotel to appear on top of these search vehicles, whenever a traveller is looking for a hospitality solution. Having a strong presence on the internet thus, is important, and you would only need miracles to make this happen overnight. Therefore, understand the working of search engines, and create relevant content that could significantly affect the SEO. Needless to say, it is a gradual process, involving a good deal of patience and precision, and if started well in advance, probably a year, can drive more and more online bookings and generate a higher ROI.
- Create a Strong Leadership Team — To taste the flavour of success, right minds need to come together and join hands to create a perfect dish with all the necessary ingredients. Recruit professionals with the right skill set and a proven track record, who are capable enough to deploy the best technologies in the best possible manner to optimize revenues, and could be at the forefront to drive the launch of the hotel.
- Monitor your competition — Existing in isolation has never been possible, with other players offering the same product and service as yours, striving to capture a significant market share. Keeping a check on the performance of competition has therefore, always been an essential component of the growth strategy of any organization. The process of revenue management, in fact, begins with a thorough understanding of the competition. Do this — Open the doors of communication, and let the flow of interesting trends, facts and observations rush inwards. Gain insights on factors like occupancy, RevPAR, etc. to develop an appropriate strategy for your hotel, well optimized to generate a positive RevPar index.
- Be ready with your pricing strategy — A room price given by the hotel might seem to be just a number randomly quoted. The reality, however, is different. Many market factors like demand, supply, consumer behaviour, etc. are to be taken into consideration to arrive at the best prices, well suited for the hotel. Pricing is one of the most challenging tasks for hotel managers and an efficient tool for room revenue maximization. Running last-minute on creating a pricing strategy could prove to be a little dangerous. Why to take a chance? Rather, start in the pre-opening stage to analyse the market behaviour, create efficient pricing grids, and steer your way forward to capture a big market share.
Revenue management is an evolved function now, and the use of technology has multiplied its benefits for the hotel. The use of advanced revenue management software and automation has already made a huge difference by adding tremendous value to the system. Its implementation and integration with the hotel’s IT infrastructure from the very beginning could ensure a seamless financial success of your hotel. I would say, make most of the pre-opening phase and reap results from the day one.