Increasing a hotel’s occupancy rate — or the percentage of rooms filled on any given night — is arguably one of the biggest concerns for hoteliers. That’s because the higher a hotel’s occupancy rate, the higher its revenue.
Occupancy is largely influenced by seasonality. While it might be easy to attract guests during your peak season, you may be wondering how to increase your occupancy during shoulder, low, or off seasons.
Often, hoteliers will consider discounting their prices to help deal with the slump. But you should remember that this strategy isn’t foolproof. While you may be able to convert travelers who are close to a decision, discounts won’t help create demand for travel.
So how do you increase hotel occupancy rates without providing deep discounts? Read on to discover nine practical methods.
Your hotel occupancy rate is considered one of the three most important key performance indicators (KPIs) for your hotel revenue management strategy — next to average daily rate (ADR) and revenue per available room (RevPAR).
Put simply, your occupancy rate is the percentage of occupied rooms at any given time compared to the total available rooms. You can determine this rate whatever way works for you — on a daily, weekly, monthly, or yearly basis for example. The higher your occupancy rate, the busier your hotel is.
Occupancy rates can be impacted by a wide variety of factors. Some, like seasonality, can be planned for. Others, such as a global pandemic, cannot. Further still, occupancy rates can be negatively impacted by a poorly positioned offer or other human error.
To make sure your property’s occupancy is never too far out of step with the industry standards and competitors, it’s important to regularly track what’s happening to your continent’s, country’s, or region’s occupancy rates to see how you compare.
Calculating your hotel occupancy rate is relatively simple and expresses the percentage of rooms filled on any given night. You can use the following equation to work it out:
Occupancy Rate (%) = Number of Booked Rooms / Total Number of Rooms
Calculating this at different times of the year is helpful to determine if you should adjust your marketing or sales in order to increase occupancy rates during downtimes. For example, if you want to look at which months are the quietest of the year, you can work out the occupancy rate for each, compare, and adjust your marketing and sales strategies accordingly.
When calculating, subtract rooms that are unavailable for reasons such as renovation.
Understanding your hotel’s occupancy rate, and finding ways to increase it when necessary is critical. Tracking it on a daily, weekly, and monthly basis will help you gain a clearer picture of your hotel, market, and guests.
If you can identify dips in occupancy, and the reasons for them, you’ll stand a great chance of patching them up with multiple strategies we’ll talk about in this article.
While understanding your occupancy rate will help you gain more revenue, it’ll help you in other areas of the business too.
For example, having a comprehensive view of it throughout the year can help you when it comes time to plan your annual budget.
If you typically find yourself with fewer guests in March, for example, you can put more budget into the first quarter to level up your marketing efforts.
With trial and error, you’ll be able to figure out what strategies work best for your hotel and market, and adjust your budget to incorporate more of those efforts.
The second way it can help is when it comes to your staffing schedules. If you know you’re going to be at high occupancy in the summer months because you’re a beach resort, adjust schedules so that you’ve got enough workers to handle the demand. The same goes for low-occupancy seasons. Knowing where to slim staffing schedules will help you save money.
Below are some tried-and-and true best practices for hoteliers looking to improve their hotel occupancy rate throughout the year.
A fantastic way to increase the value and appeal of your property throughout the year is by creating special packages and promotions. This is a better alternative to discounting, as you’re providing added value for the same price.
First, assess when and for what reasons you’re experiencing a dip in demand, then plan your promotions around that. For example, you’ll want to tailor these to different types of buyers such as leisure guests, corporate travel managers, and business travelers.
If you experience a dip in demand during weekdays, target these offers to guests who are most likely to travel mid-week such as conference attendees.
Bundling services or amenities is a great way to add value. For example, for midweek guests, throw in an afternoon tea or spa access.
Christian F Ix-Caamal, Sales & Reservations Manager, Rosas y Xocolate Boutique Hotel and Spa recently described how Canary Technologies’ Check-In, Checkout and Upsells solutions helped his team create upsell packages:
“We saw a lot of early check-in and late checkout sales very quickly. And it wasn’t long before we started adding other upsell options to our menu such as massages, bottles of wine and more. The owner of the hotel also has three restaurants around the city, so we’ve been pushing these dining options through the Upsells solution as well.”
When you’re looking at how to increase hotel occupancy rates, technology and software can help increase your chances without putting added strain on your workforce.
Offering contactless check-in can help you gather your guests’ phone numbers and emails as part of the process. Your marketing team can then utilize these to then send out content, special offers, and build customer loyalty and relationships.
Contactless checkout can help you improve guest reviews by directing guests to sites like TripAdvisor or Google to leave a review. The more 5-star reviews your property has, the more people will be inclined to book.
Additionally, these technologies can help you increase guest satisfaction by removing the need for guests to queue at the front desk. It will also take the strain off your front desk agents if your hotel gets busy.
“We also saw about a 35% increase in staff efficiency. It’s really nice to have a tool provide the exact value you expected it to, and Canary does just that. And guests love it.” - Christian F Ix-Caamal, Sales & Reservations Manager, Rosas y Xocolate Boutique Hotel and Spa
Meetings and events are an excellent way to increase hotel occupancy as this often results in purchased room blocks. Events will usually bring with them a group of attendees, many of whom will want to stay the night (or a few!).
Market your venue as a group destination by advertising meeting and event spaces, and offer special packages to event planners. Ensure your utilizing online travel agencies correctly to advertise your spaces. Some sites allow you to display floor plans and measurements based on room setups, photos, videos, and testimonials.
Whether it be weddings, book launches, family reunions, or trade shows, understand which events and meetings your hotel best suits, and amplify your unique selling points across the appropriate platforms!
It's easier to market to guests who have already visited your hotel. You likely know who they are and what they like, which means you can create more personalized offers.
Technology like guest messaging is a great way to enhance the guest experience, as it allows you to ask for feedback during the stay, giving you time to rectify issues and provide added value. AI messaging from Canary Technologies, can also help front desk teams operate more efficiently by automatically answering the most common guest questions.
Once they’ve departed, then comes the task of staying in contact. It’s a good idea for hoteliers to keep track of guest’s activities and preferences during their stay, as well as any basic demographic information. This will enable you to provide the most relevant marketing messages to them over time..
If you struggle with occupancy during certain times of the year, or even mid-week, one of the best ways to increase business is to adjust your hotel’s marketing strategy and create a year-round plan.
As we mentioned earlier, by working out your occupancy rate for different times of the year, you can plan your marketing according to periods of high and low demand.
Think creatively about how you can drum up demand. If you’re a ski resort trying to attract visitors during the summer, make a list of activities visitors can do like hiking, biking etc. There may be positives to guests visiting in the offseason, such as fewer tourists, that you can use as unique selling propositions.
To attract midweek guests, find ways to advertise amenities such as co-working spaces.
Your online presence and reputation plays a huge role in direct bookings to your hotel and will impact your occupancy rates. Demand might be high for your market but if your online presence is weak or you have a low rating, you’ll see a significant dip in visitors.
It’s well worth it to prioritize management of your online presence and reputation. Ensure your profiles are filled out on sites like Google, Booking.com, and Tripadvisor. Add your latest photographs, and make sure that all of your amenities are listed.
When it comes to improving reviews, you can be crafty about it. Use technology like contactless checkout, to push happy guests to review sites, or leave a tent card in the rooms with a QR code.
Something hoteliers forget is that they’re not alone. Convention and Visitors Bureaus (CVBs) and Destination Marketing Organizations (DMOs) can help you in a myriad of ways.
These organizations exist to serve their communities and help power the local economy — so, what if they could send some of that business your way?
Business travel, leisure, group business — CVBs and DMOs help with all segments. They work on a regular basis with event planners and corporate travel managers to source the perfect venue for their needs.
But while they can help, these organizations are often extremely busy. It’s a good idea to build long-term partnerships with them to ensure you’re fresh in their minds when a planner is looking for an event venue.
Fight to stay at the top of their list by providing all the information they need about your property, ask them the right questions, and develop relationships with the relevant people.
Business travel is an important segment of revenue for many hotels. If you’re based in a city, you’ll likely have swathes of people visiting for events, big and small, throughout the year.
First, keep an eye on the types of events coming up, such as concerts, trade shows, or film premiers. Market to the demographic of people likely to attend that event and, if you can partner with the event organizers, offer special promotions for those event attendees.
Research corporate travel managers and what they look for in hotels when sourcing for their upcoming travel programs. As with group business, ensure you’re present on supplier networks and venue directories so that when travel managers source, you’re visible.
You can learn about corporate travel managers, who they are, and their priorities and challenges by following news sites like Business Travel News.
With a bit of creativity, planning, and an understanding of your market, it’s not too difficult to increase occupancy rates. Implementing strategic technology and adjusting your marketing for times of low demand can make a huge difference.
But the number one rule is to understand your occupancy rate like the back of your hand. Analyze year-round, identify patterns, and you’ll be half-way to increasing your rate. From there, all you need to do is execute on a plan of action.
Next up, discover how your housekeeping department can cut costs while improving employee retention.
Though there is no indication that scammers looking to commit fraud will stop targeting the hotel industry anytime soon, that doesn’t mean hoteliers are defenseless. Combined with commonsense best practices, the right technology tools can help hoteliers reduce fraud by up to 90%Read More
Digital solutions can help your property optimize a host of basic hotel operations. This not only saves your team valuable time, it also opens the door to more personalized service, better reviews and increased revenue. And while it may feel like a bit much to implement them all at once, each of the tools mentioned here pays for itself in more than one way.Read More
Today, technology offers many opportunities to reduce typical hotel operating expenses. The right tech tools can be especially effective in addressing the biggest cost factors hotels have to deal with — labor and resource use. Apart from that, many of solutions also create new opportunities to generate revenue and delight your guests.Read More
A hotel’s front desk is the nervous system of a hotel. It’s the main contact point for guests throughout their entire journey with a property, from pre-arrival to checkout. The right hotel front desk software can have a huge impact on the guest experience, staff efficiency and hotel revenue. Read More
In today’s economy, cutting housekeeping costs is crucial, but so is keeping your staff happy. It’s a balancing act, which means proper research before you make the jump is crucial. When planning, think up pros and cons to each decision and potential knock-on effects.Read More