Is Your Peak Season Revenue What It Could Be? How To Increase Incremental Revenue This Year

May 24, 2018 Cody Putman

 

Imagine you live in Houston—where it is very humid and temperatures are projected to be 100+ degrees for over 30 days this summer. Your air conditioner is old and really needs to be upgraded. You know that an investment in a new system will make your home more comfortable and that you will save substantial money over the course of this summer (money that could be put toward other more satisfying home repairs, such as new paint). But you decide to wait until you have more time in the fall to deal with the research and inconvenience of a major purchase. It’s just not a good time for it, you think. This is what many hoteliers are doing but on a much grander scale: putting off revenue-generating solutions until the slower season and losing out during the hot months.

 

Many seasonal hotels rely on peak season for 70% or more of their annual revenue, so the success of high season dictates the financial health of the whole operation and the opportunities for growth in the ensuing year. We know this, and, yet when it comes to driving revenue and occupancy, major strategies and implementations get pushed to shoulder or offseason. Hoteliers, instead, find themselves concentrating on staffing volume, increased maintenance and cleaning needs, and guest satisfaction issues as peak season approaches. The negative impact of pushing revenue-generating strategies to the shoulder season is compounded when you consider that travel is expected to increase this year. A survey by The GO Group, LLC showed that 33% of leisure travelers plan to travel more than last year and 33% plan on traveling as much as the previous year.[i] Most of that travel will, of course, happen between June and September, but many properties will miss out.

 

You can’t afford to wait until shoulder season to focus on operational changes that drive revenue growth, including reservation technology that increases conversions, outbound programs that fill booking pattern gaps to drive incremental revenue, and guest history and inquiry data that impact current and future business. Now is the time to implement valuable programs that will drive substantial increases in incremental revenue during peak season. Here are a number of strategies that moving now allows hotels to take advantage of:

 

  • A new revenue-generating system pays for itself during high season. Implementing operational systems is less risky during high demand periods. Any shortfalls due to cost or training ramp-up are made up far more easily during peak season. Even if the transition isn’t seamless, hotels still drive incremental revenue during the same peak season.
     
  • Capture valuable leads. The longer you wait the more leads are lost. (Remember that you’ve already paid for the marketing to get those phone calls, so lost leads are like budget vanishing into thin air.) Database growth obtained from summer demand has long-term profitability impact.
     
  • Remarket. Not only are hotels able to remarket via outbound programs to those same prospects, but the leads also become the foundation for email marketing campaigns—the most successful outreach there is—in shoulder and offseason. Even during sellout times, capturing lead data will impact shoulder season and inquiry anniversary remarketing.

 

  • Fill midweek and demand pattern gaps. With a LifeCycle campaign, hotels can remarket to inquiries that didn’t book due to rate with a midweek deal, as well as remarket to guests who stayed during those periods in prior years.

 

  • Revenue in upsell potential. With tools and training at their disposal, reservation teams improve at selling higher ADR stays as well as ancillary activities.

 

  • Outbound marketing, beyond the booking. Outbound programs have a variety of uses. Among them, reservation agents can sell ancillary activities and services after a booking is made, increasing average revenue per stay.

 

  • Leverage rate. Rate optimization can also be a critical by-product of reservation technology that is just as, if not more, profitable in high season than in offseason.

 

Jekyll Island Club Resort implemented in May, just before the destination’s peak season. General Manager Kevin Runner said, “We are in a destination where we see about 70% of our revenue in a period of 5-6 months. With a projected upturn in the economy, we felt the need to not only benefit from the increase in occupancy but also felt we had become somewhat lazy in our rate aggressiveness. By empowering our reservation team to become more sales driven as opposed to order takers, we were able to see significant gains month over month in Leisure ADR.”

 

Jekyll Island Club Resort saw immediate returns. Revenue per booking increased 18%, and reservation team conversion rates shot up to 65%. Runner said, “The results were nothing short of amazing. We have been achieving year-over-year revenue goals for 20 straight months.”


Outbound sales programs executed during peak season further capitalize on the new technology by capturing leads for future outreach. (Additionally, with more efficient reservation sales due to call monitoring and coaching, agents can not only handle a higher call volume, but they are also more likely to have downtime with which to make outbound calls.) The Broadmoor, another property that integrated the technology just before peak season, made 3,000 outbound calls in the first year for a revenue gain of $770,000. During the second year, outbound revenue nearly doubled to $1.2 million.


While it’s a tall order to implement a new system while preparing for peak season, the immediate benefits are worth the time and budget. For a complimentary performance analysis with visibility into how you can drive even more peak season revenue, try our performance calculator and contact us for a personalized analysis.

 

[i] Survey: Big Increase in Travel Frequency Expected in 2018, Lodging Magazine, January 2018

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