Heavily discounting room rates is not the only way to increase your direct booking rates.
While discounting can increase occupancy in your hotel in the short-term, this is not a good long-term strategy. Prolonged reliance of discounting will undercut your property’s ADR (average daily rate) and RevPAR (revenue per available room). All this is to say that this strategy will bleed your company’s profits.
When you rely on discounting as your main means of driving up your occupancy rates, you are essentially inviting competing properties to participate in a so called “race-to-the-bottom.” In other words, your property will feel the need to continuously lower it’s rates to remain competitive with other properties that are also offering discounts. This, in turn, will only lead to financial failure in the long run.
Another reason why discounting is not an effective strategy is because it assumes that cost is the only thing guests are looking for in a hotel. However, almost all guests, and particularly millennial guests which will remain the most prominent market force in the hospitality business for years to come, prioritize travel experiences and service when it comes to choosing a hotel. Discounting alone will not do anything to improve your guest experience, which means that it is not the most effective strategy to boost bookings.
Rather than discounting, hotels are better off offering additional incentives for guests who book directly. These extras show your appreciation while keeping the cost of acquisition low. But properties need to be smart about which extra incentives they offer. Offering free breakfast or airport transfers require costs that can also affect your bottom line. Instead, hotels should offer things like free room upgrades or complimentary early check-in or late check-out, perks that cost very little but offer the guest significant value.
These are some of the ways in which you can boost direct bookings without relying on heavy discounting. If you want another way to offer more value to your guests, then you should consider making upgrades to your property. Turn to the experts at Parkwest General Contractors for assistance with all your building renovation and update needs. Contact us to get started today.