How To Increase Your ADR, Series 3
Series 3 – Take a walk
In Series 2, we looked at Dynamic Pricing; how this can immediately impact your ADR along with the considerations you need to make before implementing this strategy. If you missed it, you can read it here
In Series 1 we also looked at a great way to increase ADR by shifting business to more profitable channels (again you can read it here)
Both of these articles focus on the financial improvements that can be made by changing your pricing strategy, but for now I would like to ‘look inward’ and to focus on the improvements that can be made if you get your own house in order…
So, what does that mean exactly? Over my 25+ years in revenue, some of the cleverest Commercial Leaders start, not with reviewing segmentation or distribution, but actually spending time ‘walking the walk’.
Literally… when was the last time that you walked your rooms? Every single one of them…
Some of the most successful hotels I have worked with start here. Rooms are often categorised during inception and often just left that way for years and years. I love it when I see a new Revenue Manager come into a property and the first thing they ask to do is to walk the floor.
Whilst revenue gains can of course be made by channel shift or dynamic pricing strategies, you can also make an immediate impact by simply reviewing your product offering.
Do you have the right room configurations? Could some of your standard rooms be upgraded to superior allowing you to charge a little more?
Or, in reverse, does your standard demand vastly outweigh your superior, and are there upgraded amenities included in these rooms that actually cost you money if you upgrade guests for free?
Do you have too many room types (I recently spoke to a hotel with 16 different room types!) Honestly, your guests don’t care if one room is one metre larger than the other. Try and rein this in and focus on differentials and what will actually increase your revenue. Plus, make it easier not only for your team to sell but your guests to buy.
Do you want to perhaps focus on the family market? Do you have room for extra beds? I once worked with a hotel that didn’t have rooms for extra beds so bought little pop-up tents and put lots of quilts and blankets on the floor. Voila! Kids are on an adventure; parents are happy if the kids are happy, and you diversity into a new vertical with very little expense.
Staying on the family theme, maybe create a family package that includes milk and cookies being delivered to the room for the kids. Include good old-fashioned story books in the room and again, you have a lovely family experience.
Is there a case for zip-and-link beds if you want to increase your tour market or ‘friends’ weekend breaks? One of my pet peeves is seeing bedrooms with fixed bedside tables that don’t allow re-configuration to zip-and-link - easy to rectify and could be a great commercial decision.
Are your rooms tired and in need of a little love? Remember that our guests expect, as a minimum, better than they have at home. Does your hotel meet those expectations? Spend to gain – sometimes, it is that simple…
What are your room amenities like? If these were improved, could you charge a little more? We have all heard of the brands that allow you to ‘borrow’ a goldfish for company, but without raiding your neighbours carp pond, can you perhaps upgrade your tech or maybe include a yoga mat or wellness package. Guests will pay for these little luxurious.
Do you have a strong corporate base that might just love the idea of Club Rooms with additional perks?
Create interesting packages. Guests now want an ‘experience’, so what can you include? This might mean partnering with another provider to include a city walking tour or maybe bike hire. But something as simple as sending a taxi to the airport to collect out-of-town guests can be a huge perk. If it costs less than your OTA commission then you are winning and don’t forget that the beauty of packages is that you can ‘opaque’ pricing so that costs can be hidden within a total price.
But often, the most effective solutions are the simplest… empower your team to upsell and cross-sell. Allow them to price-match if a customer calls to say that they have seen a better rate on an OTA (we all know that they are using their commission to undercut us), so put some perimeters in place and give your team the guidance and support they need to secure as many direct bookings as possible (a blog for another day).
Simple upsell and cross-sell strategies can also work really well. Some hotels we have worked with in the past have great results with pre-stay ‘upgrade’ emails which allow customers to dig into that lucrative ‘second wallet’ and spend a little more. Or perhaps have a note on reception to say what the special upgrade price is or simply train your stay to ask… This, by the way is an art, so be careful, as wording and tone are important - just as much as ‘reading the room’ and understanding who may be open to the idea… This all comes with great training…
So, in short, our first two blogs definitely focused on the maths of profitability but as always, commercial success is not down to just one person i.e. your Revenue Manager. Whilst they absolutely should orchestrate the change, every single department has responsibility for the commercial success of your hotel… Revenue Managers may ‘Rule the World’, but having the whole team engaged and taking an inward look at how you can improve your product and service, will absolutely add to the bottom line.
(no ChatGPT algorithm was hurt in the making of this article)
