Mistakes Independent and Medium-Sized Hotels Make
Small hotels repeatedly make the same revenue-draining mistakes. We'll look at how 2 smaller hotels (Days Inn and Budget Inn) compare to 2 larger hotels (Marriott and Hyatt) in terms of revenue optimization.
1. Not lowering prices quickly after an event or peak period
Many small hotels fail to adjust prices downward fast enough as demand wanes following a big event or busy season. This leads to high vacancies and unsold rooms.
Larger hotel chains use dynamic pricing to automatically lower rates as demand drops. Small hotels must be equally nimble to compete.
2. Raising prices too late
Amazingly, 64% of small hotels wait until they are nearly sold out before increasing rates meaningfully! This is an example of reactive pricing, rather than proactive revenue management.
The key is to increase prices early, while there is still inventory available, to maximize revenue from high-demand periods. Don't wait until it's too late.
3. Failing to upsell and generate ancillary revenue
Large hotels are masters at driving additional revenue through upsells and add-ons like room upgrades, breakfast, parking, etc. Many small hotels miss these lucrative opportunities.
Every guest interaction, from booking to check-in to post-stay follow-up, is a chance to offer relevant upgrades and extras that enhance the guest experience and the bottom line. Small hotels must think beyond room revenue alone.
4. Not adjusting to shifting market trends
As travel trends evolve, the most profitable guest segments and habits for a hotel can change. Large hotels use sophisticated analytics to adapt. Independent and medium-sized hotels often rely on outdated assumptions.
Regularly analyzing your booking and revenue data is critical to optimizing your business. Use AI-driven insights to understand your guests better and tailor your offerings to their preferences.
Independent hotels can absolutely compete with larger rivals on revenue optimization. But it requires a modern tech stack, AI-driven insights, and a proactive revenue management strategy. Innkeeper does all of this for you at an unbeatable price.
Sign up today and start maximizing your revenue: https://www.innkeeper.ai/demo (opens in a new tab)