Strategies to increase hotel revenue

Looking for strategies to increase your hotel's revenue? Here are sixteen that work, and how to start each one.

From someone who prices independent hotels every morning. Pricing, stay rules, booking sites, fees and extras, each in plain words with a first step you can take yourself. Then play the game to test your instincts, or get the audit and see which ones are costing you the most.

10+ years · 50+ hospitality properties · 20% average revenue lift*

*At hotels that had never done revenue management before RHG set the rates.

II·The strategies

16 strategies, in four groups.

Five of these show a dollar figure from a real audit of a small hotel in Marfa, Texas: what the strategy was worth there in a year. Two show example math for a 20-room hotel that is 70% full with two-night stays, about 2,550 stays a year, so you can see the size.

Pricing

Set the rate on purpose.

  1. 1

    Stop pricing by feel. Set a floor and a ceiling for every room type.

    Let the rate move inside them with demand instead of sitting where it was set two years ago. At one hotel we audited, the rate had drifted $22 below the prior year while occupancy rose six points: 270 more rooms cleaned for the same revenue.

    Try thisWrite down the lowest and highest rate you would ever take for each room type. Those are your floor and ceiling.

    $53,000
    a year, one real audit
  2. 2

    Judge the year by RevPAR, not by how full you were.

    RevPAR is your room revenue divided by every room you have, sold or not. A full hotel at a cheap rate can earn less than a hotel that is three quarters full at the right rate, and the full one costs more to clean.

    Try thisEach month, write down three numbers: how full you were, your average rate, and RevPAR. If you got fuller but RevPAR did not go up, your rates are too low.

  3. 3

    Price by pace, not by the calendar.

    Pace is how many rooms are already booked for a future night, compared with the same point last year. If a Saturday next month has 12 rooms booked and last year it had 7 by now, demand is ahead. Raise the rate now, not the week of. If a night is behind, make a small move early instead of a big cut at the last minute.

    Try thisEvery Monday, look at the next 60 nights next to last year. Raise any night that is well ahead.

  4. 4

    Price the nights that always sell out before they sell out.

    New Year's Eve was selling at $149. A $279 floor with a three-night minimum, set in advance, is the whole fix. Festival weekends, holiday weekends and the local event calendar all work the same way.

    Try thisList every event in town for the next year. Put a higher floor on those nights today.

    $15,000
    a year, one real audit
  5. 5

    Give weekdays and weekends their own rates.

    In most towns Friday and Saturday sell themselves and Sunday through Thursday do not. One rate for the whole week is too cheap on the weekend and too high midweek.

    Try thisPull last year's occupancy by day of the week. Your busiest nights get a higher rate than the rest.

  6. 6

    Make the last three days count.

    The three days before a night tell you the most about it. If you are going to sell out, the last rooms should cost more. If you are not, a small drop can fill a room that would sit empty. Set the rule ahead of time so nobody at the desk is guessing.

    Try thisWrite one rule: three days out, over 85% booked, raise $20. Under 50%, lower $10.

  7. 7

    Price the gap between your room types.

    If your best room is only $10 more than your standard room, almost everyone takes it and the upgrade is given away. If it is $100 more, nobody does. Set a gap guests will pay, then offer the better room again at check-in for a set price.

    Try thisWhen a better room will sit empty tonight, offer it at check-in for $25 more a night.

    Example, 20 rooms: 1 in 20 stays upgrades at $25 a night: about $6,400 a year.

Stay rules

Shape how long guests stay.

  1. 8

    Use minimum stays on the weekends that fill anyway.

    A two-night minimum on peak weekends protects Saturday from the one-night booking that blocks a three-night stay. Lift it the week of, if the weekend hasn't filled.

    Try thisAdd a two-night minimum to your three busiest weekends and watch what books.

    $10,000
    a year, one real audit
  2. 9

    Reward longer stays when it is slow.

    Midweek in the slow season, one guest who stays three nights is worth more than three guests who stay one: one check-in, one full clean, fewer empty gaps. Offer a small discount on the third night, only on the dates you need it.

    Try thisSet a “stay three nights, save 15% on the third” rate for your slow months only.

  3. 10

    Tighten cancellations on your busiest nights.

    On a festival weekend, a free cancellation two days out leaves you a room you cannot sell again. On those nights, ask for a longer notice or offer a lower non-refundable rate next to the flexible one. Keep the easy policy for slow nights.

    Try thisMark your 15 busiest nights of the year and give them a stricter cancellation policy.

Booking sites

Pay less to sell the same room.

  1. 11

    Sell your own rooms for at least what the booking sites sell them for.

    Guests were paying $59 more a night for the same rooms on Expedia than on the hotel's own site. The hotel was underselling itself on the one channel with no commission.

    Try thisLook up tonight's rate on your own site and on two booking sites. Your site should never be the highest.

    $18,000
    a year, one real audit
  2. 12

    Know what each booking really costs you.

    A booking site's commission comes off the top, often 15% or more. A $200 room booked that way can leave you $170 or less. That is not a reason to leave the sites. It is a reason to price knowing the cost, and to give guests a reason to book with you next time.

    Try thisAdd a small perk for booking direct, like a later checkout, to every confirmation email and to a card in the room.

  3. 13

    Treat your listing like your front door.

    Rate is half of a guest's decision. The page is the other half: current photos of every room type, the things guests filter for (parking, pets, pool, breakfast), and a reply to every review, good or bad.

    Try thisSearch for your hotel on Google and on Expedia today. Fix the first three things a guest would see that are wrong or old.

Fees and extras

Get paid for what you already give.

  1. 14

    Charge for what the market already charges for.

    The town's default pet hotel had never charged a pet fee. $35 a stay, which no guest in 66 reviews mentioned, was money left on the desk.

    Try thisCheck what the three hotels nearest you charge for pets, parking and resort fees. Match what guests already expect to pay.

    $8,000
    a year, one real audit
  2. 15

    Sell early check-in and late check-out.

    Guests ask for these all the time, and most small hotels give them away. Sell them instead, only when housekeeping and the next arrival allow. On a full night, say no or charge more. On a quiet day, it is an easy yes.

    Try thisOffer noon checkout for $25 and 1 p.m. for $40, at check-in and in the email before arrival.

    Example, 20 rooms: 1 in 10 stays buys one at $30: about $7,700 a year.

  3. 16

    Package the reason they came.

    Guests come for something: a festival, a wedding, a trail, a winery. A package that adds parking, breakfast, a late checkout or tickets from a local partner lets you earn more per stay without changing the room rate the booking sites show.

    Try thisBuild one package around the biggest reason people visit your town and sell it on your own site.

The Modern Hotel Audit scores your hotel on thirty-five checkpoints, these among them, and puts a dollar on every finding. You see which of these are costing you the most, in order.

III·Learn by playing

Now try it. Fourteen nights, your room count, your costs.

Build a hotel your size, tell the game what a room costs you, and price a season in a desert town where the market moves every night. Sell out too early and the game shows you what it cost.

Tonight
Saturday · bachelorette weekend
Market rate
$240
Your rate
$240
matched · 11 of 15 rooms sold

Three minutes. At the end, your score and what the gap is worth at a hotel your size.

IV·At your size

What 15% looks like at your size.

A $400K hotel
+$60,000

a year · about $5,000 a month

A $750K hotel
+$112,500

a year · about $9,400 a month

A $1.2M hotel
+$180,000

a year · about $15,000 a month

Our average is 20% at hotels that had never done revenue management. The tiles use 15% on purpose, so the number you see is one we would rather beat than explain. Your audit prices three cases from your own PMS data, conservative first.

The Modern Hotel Audit is free for independent hotels, motels and inns doing $400,000 a year or more. One property or several, as long as you own the rate strategy. Not for franchised or brand-managed properties, where the flag sets the pricing rules. Under $400,000, start with the free downloads; they cover the same methods.

V·Next step

Get your own numbers.

Your next 90 nights are being sold right now, at whatever rate is loaded. A few questions, then pick a time for a 15-minute call. Scored out of 100, every finding in dollars, the two best fixes yours to keep whether we work together or not.

Book The Modern Hotel Audit

Free. No obligation, no pitch. Fifteen minutes to see whether the audit fits your property, and the two best fixes are yours either way.

Free. No strings. Text consent is optional.

Ramirez·Hospitality
By Adam Ramirez

Operator-led revenue and opening consultancy for independent and boutique hotels, motels and inns.

760-969-9249
adam@ramirezhospitality.com
351 E Via Carisma, Palm Springs, CA 92264 · Working nationwide
Begin
Book The Modern Hotel Audit

Mon–Fri 8a–6p PT · Weekends by appointment

Ramirez Hospitality Group is an operator-led revenue and opening consultancy for independent and boutique hotels, motels and inns, based in Palm Springs, California and working nationwide. Three offers: The Modern Hotel Audit (free, the hotel scored out of 100 across seven areas and sized in dollars); the revenue management subscription (three plans, Essentials, Growth and In-House, each a flat monthly fee, nothing on commission, no software included in the fee); and The Modern Hotel Plan (a flat-fee feasibility study, priced up front) followed by The Modern Hotel Launch (the opening and reopening engagement, quoted per project). Founded by Adam Ramirez: 10+ years · 50+ hospitality properties · 20% average revenue lift*; eight hotels opened from concept to ribbon-cutting, four repositioned, $10M+ in annual hotel revenue managed, six funded feasibility projects.

*At hotels that had never done revenue management before RHG set the rates.

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