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Sina Niedermaier
Jan 10, 2024

The Art of Revenue Management In Resort Hotels: Specifics and Strategies

Effective revenue management is critical to maximizing revenue and profits and ensuring long-term success. While the basic principles of revenue management apply to all types of hotels, resort hotels have important strategic considerations. This blog post highlights the challenges and opportunities faced by these types of properties. How can good revenue management succeed here?

Seasonal highs and lows

The primary challenge for resort hotels is to maximize revenue during the high season and ensure a minimum of revenue during the low season. Many resort hotels need to generate 80% of their total revenue in 20% of the year. Profitability and guest satisfaction during the quiet periods require creative marketing strategies and attractive special offers. The ability to respond quickly to changing market conditions is crucial. The traditional high and low seasons have evolved, not least due to the pandemic. Emerging travel trends have led to so-called micro-seasons, where demand for certain events or experiences increases. Effective revenue management requires flexible pricing that adapts to real-time demand profiles.

Segmentation through the establishment of personas

Classifying guests based on their preferences and behaviors to enable tailored offers and pricing strategies is essential, especially in resort hotels. It is therefore particularly important to select the right customer relationship management (CRM) system. Travelers should be grouped by market characteristics such as demographics, reason for stay, length of stay, booking channel, and preferences. In addition, you should investigate whether they are new or returning customers. Segmentation allows you to offer discounts to loyal customers or create customized packages to maximize revenue.

Optimization of the business mix

Diversifying the business mix by including wholesalers such as tour operators ensures consistent, reliable business in the form of a base occupancy, especially in the low season. However, it is advisable to evaluate this mix regularly in order to convert more tour operator business into individual business, which is usually more profitable. By regularly reviewing and spreading the business across as many shoulders as possible, the risk of financial losses due to market fluctuations, economic cycles, or industry-specific problems (e.g. insolvencies) can be reduced. If one business area is affected by a crisis, profits from other areas can help to offset the losses. A diversified business mix makes a company more resilient to external shocks. If an industry or market segment is affected by unpredictable factors, more stable business areas can keep the company on track.

Introduction of per-person pricing

One strategy in resort hotel revenue management is per-person pricing, where prices are based on the number of guests in a room rather than a flat rate per room. This pricing strategy can effectively attract larger groups or families, leading to higher revenue and therefore profits if implemented and promoted cleverly.

Dynamic pricing per room type

In high season, ensure that larger rooms or rooms with a view are priced at a supplement to maximize revenue. However, in low season, rooms with a view may not be as impressive as in summer. Therefore, when demand is low, it is important to ensure that room-type surcharges are reduced to maximize hotel occupancy. Doing this manually takes a lot of effort. Therefore, the use of a revenue management system (RMS) is recommended. This must be able to adapt the prices of room types to current demand and change them dynamically.

Offering arrangements

Creating appealing packages is an art. Sales departments and revenue managers must overcome the challenge of creating packages that meet the needs of guests. To do this, it is essential to have previously divided the guests into segments or personas. The right price-performance ratio is crucial to maximize revenue. Such arrangements can include wellness packages, adventure offers, or culinary experiences. By carefully combining offers, resort hotels can not only increase their room occupancy but also increase the average revenue per guest. It is important to regularly measure how often the packages are booked and whether they are still profitable.

Cooperation with local providers

Working with local suppliers requires coordination with external companies and local attractions. Resort hotels can create unique offerings through partnerships with local attractions or businesses, perfecting the guest experience while strengthening their regional ties.

Emotional marketing and branding

The emotional experience plays a key role in the resort segment. Emotional marketing can create a connection with potential guests. Marketing departments must be able to emphasize the unique atmosphere and experiences of the resort. This helps to create strong brand loyalty and retain guests in the long term.

Customer loyalty programs Returning customers are an important source of revenue as they spend more and automatically reduce the cost of acquiring new ones. To increase guest loyalty, strategies such as personalized services, loyalty programs or exclusive offers are effective. Incorporating these strategies into resort revenue management can ensure a steady stream of repeat guests and drive revenue growth.

An optimal online presence A strong online presence is crucial for the success of resort hotels. It must be ensured that the hotel website is appealing (mobile responsive), user-friendly, and communicates the resort's various offers and experiences. Search Engine Advertisement (SEA) and Search Engine Optimization (SEO) are an important part of this. SEA enables hotels to place ads in search engine results when potential guests search for relevant terms. This increases the visibility and reach of the hotel website. With SEA and SEO, hotels can place targeted ads for specific keywords that are relevant to their target group. This makes it possible to target potential guests who are actively searching for accommodation in the region. In this way, resort hotels could also set up flash sales for low-demand periods and advertise themselves in search engines via campaigns.

Possible dependence on means of transportation Some resort hotels are dependent on flight schedules, charter flights, or train connections, for example. This makes it particularly challenging to acquire business for the hotel in low season periods. Under such conditions, special creativity is required. It may be possible to encourage guests to stay longer with attractive offers. Local and regional marketing activities can also be emphasized, for example. These could be weekend packages, themed evenings, wellness offers, or other attractive activities.

Constant evaluation of opening hours

For hotels that are closed seasonally, it is important to regularly check whether the closing times still correspond to current demand or whether it may make sense to close or open the hotel earlier. Operating costs play a major role here. If the expected revenue exceeds the operating costs, it may be advisable and profitable to open the hotel.

Successful revenue management for unforgettable resort experiences

Given the complexity of revenue management in resort hotels, automation is often a necessity. It is generally worth paying particular attention to the right tech stack. For example, does the property management system (PMS) support all outlets? Does the CRM also support more complex requirements? Does the revenue management system (RMS) support the type of hotel? Are all relevant data sources integrated by the RMS? Revenue management in resort hotels requires careful adaptation to the unique circumstances of the property. For example, is the RMS able to incorporate currency exchange rates and incoming flights into pricing decisions? The ability to manage seasonal fluctuations, develop creative offers, and utilize a diverse range of revenue streams are key components to a resort hotel's success. Added to this is the intelligent use of technology through controlled but essential automation.

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