Hotel Revenue

Occupancy Rate In Hotels: Importance And Ways To Increase It

Prerna Aditi
  2022-01-27  7 min

Who wouldn’t like to increase the occupancy rate of his/her hotel and maintain the same? It would be no mistake to say that wishing for a full occupancy rate for most of the time is one of the most sought-after wishes in the hotel business. However, this doesn’t happen all the time. Credit goes to factors such as ever-changing seasonal demands, people’s preferences, holidays, and of course the pandemic. In order to maintain the higher occupancy rates, hotel owners often take the pain to slash down their prices and offering exciting discounts. Here comes the need for understanding the effective strategies that can help us with this.


In order to understand those strategies, we first need to clear our basics about occupancy rates. Well, in simple words, occupancy rate can be understood as the ratio of booked rooms in a hotel to the total number of rooms available in that hotel. Or, it can also be paraphrased as the number of occupied rooms in a hotel for a specific time.


Ways To Increase The Occupancy Rate



1. Targeting The Right Audience


Targeting the right audience is quite important when it comes to working on increasing the occupancy rate. When you target the right audience, you are automatically promoting your hotel to the population that is likely to book your hotel. For this, you can collect data from the internet or your previous guest lists. Your target audience could be solo travelers, budget travelers, newly-married couples, or families.


2. Formulating Customized Packages


One of the major reasons why you are not having an increased occupancy rate in your hotel could be the absence of an effective holiday package. Once you have segmented your target audience, you can easily figure out the kind of packages you need to make. You can formulate packages by keeping the age, geo-location, ethnicity group, culture, and income in consideration.


A corporate guest would be more interested in free-airport pickup, wifi access, and a relaxing spa rather than watching sunset viewpoints. Once you are able to differentiate the needs and wants of different guests, you can customize packages.


While you are formulating the packages, you need to set strong pricing to stand out among the competitors and make profits.


3. Engage In Marketing During Off-Season As Well


Just because it is an off-season, doesn’t mean you can’t promote your hotels to your prospective guests. In fact, applying the same strategy always that you implement during the peak season, may not make much difference. You need to be prepared for reaching out to your customers even during the off-seasons. Even though it may be a low-occupancy season, you can still target business travelers, conference attendees, and other people.


4. Utilize Technology And Innovation


We are living in an era where everything has literally gone digital and so can you. All you need to do is make an online presence for your hotel. People sitting in a far corner of the world may not know if your hotel exists unless he/she doesn’t visit your city. But thanks to the internet, people can always know about your hotel and the facilities. With an impressive, robust, and user-friendly website and social media platforms, you can do wonders when it comes to occupancy rates.


5. Introduce Amenities As Per Customers’ Need


The time is changing and so are customers’ needs. In order to increase the occupancy rate in your hotel, it is quite important to introduce new amenities. Look in your reviews section. If you find your guests asking or complaining about certain amenities, then you need to think about that. For example, you can include some fun activities for kids, a relaxing spa, wheelchair facilities for senior and differently-abled citizens, mini-libraries, or medical facilities in your hotel.


By doing so, you will be increasing the demand for your hotel quite easily.


6. Invest In Grooming Your Staff


Any guest would love to be in a hotel that has well-groomed staff ready to provide the best class services. You can’t always blame low demands or increased competition for your low occupancy rates. No matter how beautiful your hotel is, guests will always find it a major turn-off if your staff does not behave well or make efforts to give the best experience. Therefore, it is important to invest in staff training programs along with guest-servicing.


7. Bring In The Loyalty Offers


One of the best ways to retain previous guests and increase loyalty is by introducing a loyalty offer. You can send notifications to your previous guests, informing them on how your hotel is willing to give discounts or extra facilities to its existing guests if they make another booking in your hotel. This way, the next time your guest thinks of a trip, they will be likely to rent a room in your hotel during their stay.


8. Connect And Interact With Your Guests


Staying in touch with your previous guests is as important as targeting new guests. One of the best ways to stay in touch with your guests is by sending a newsletter or asking them to review the new amenities in your hotel. You can also ask them to refer your hotel to their near and dear ones. Creating a specific list of guests who have rented a room in your hotel to send emails informing new announcements, can help you in connecting with them. Not only this, but you can also give them some attractive discounts and offers during the holidays season.


9. Promote Your Hotels To Local Guests As Well


It’s good if you are promoting your hotels to guests who are coming from other cities, states, or overseas. But it would be better if you target local guests as well. Let them know that you are eager to welcome them whenever needed. If not this, they may at least refer your hotel to their friends, relatives, and acquaintances.


Importance Of Occupancy Rate

Occupancy rate is quite important when it comes to running a hotel. If you are wondering why then here are some reasons:

  • It is one of the factors that can determine the success or failure of your hotel.
  • It shows how well you can compete with your competitors.
  • It highlights your hotels and indirectly increases the demand for your hotel.
  • It indicates the health of your business, thus affecting the revenue and profits.

Factors Affecting The Occupancy Rate

  • Off-seasons can be one of the major reasons why your hotel is running at a low-occupancy rate.
  • Not targeting the right customers can also be one of the factors behind the low-occupancy rate.
  • Lack of exciting offers and discounts can also affect the occupancy rate in hotels.
  • Promoting the same package for each segment of customers can also be one of the factors.
  • Lack of proper facilities and amenities can be contributing factors.

Above all, spreading word of mouth is still one of the golden ways of increasing the occupancy rate in your hotel. A good word of mouth can be spread only when guests find your services, facilities, and other factors satisfactory and impressive. You can try giving the above-mentioned tips a shot and then you will be seeing a positive difference.


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