How do Hotels Grow Rates? 5 Strategies for Success

BOOKING TECHNOLOGY AND CONVERSION OPTIMISATION EXPERTISE
NET AFFINITY | WWW.NETAFFINITY.COM
5 STRATEGIES
FOR SUCCESS
HOW DO HOTELS GROW RATES?

OVERVIEW
BUDGET
SEASON
IT'S TIME FOR 1. DISTRIBUTION
SEGMENTS
2. COMPETITION
ANALYSIS
3. GIVE DIRECT THE
ADVANTAGE
It's time for dedicated sales teams to dive
deep into planning for the year. How can you
drive direct bookings while also growing
rates?
We've outlined 5 successful approaches to
rate growth.
4. AVAILABILITY
5. GROUP
BOOKINGS

BERKSHIRE UNIVERSITY | COLLEGE OF ARCHITECTURE
DISTRIBUTION SEGMENTS
SEGMENTS
DISTRIBUTION
When examining your
distribution segments for rate
growth opportunities, start by
reviewing each segment for
the year gone by.

Challenge yourself on the lowest
performing ADR segments. Ask yourself
what you might have done differently on
each segment.
Example: Could you have started your Best
Available Rate at a lower figure? By starting
with a lower BAR and gradually increasing,
you gain more total revenue than you would
by starting too high and needing to reduce at
the last minute to pick up bookings.

KEY POINT:
When looking at the net rate from each segment, subtract the
commission paid to each channel. If you remove a channel with higher
commission rates, could you replace the business with bookings from
channels with a better cost per acquisition?

COMPETITION ANALYSIS
ANALYSIS
COMPETITION
Analyse your competition carefully.
In a few hotels I’ve worked for, there
have been instances where a group
inquired and we knew we were directly
competing with our neighbours for
the business.

DRIVE THEM TO THE COMPETITION:
In some cases, we would drive them into the arms of the
competition by quoting a higher rate. This would let our
competitors fill up on group business at a lower rate.
When the next group inquired, we were able to drive higher
rates, knowing that the competition didn’t have the space to
quote for them.
If this strategy is successful, you can take complete rate control
within your market.

The same concept applies for BAR and Package business.
Review your competitors in detail – can you identify their rate
strategy? Be as independent as possible with your rate
growth strategy.
Give added value to your guests, and they will understand
why your rates are above your competitors’.
If you make your value proposition strong enough and
your market allows for it, value can trump price to a
certain point.

FREE BREAKFAST
THE STRONGEST ADDED VALUE IN THE MARKET
RIGHT NOW?
We recommend bringing this into packages and rate
plans wherever possible.

GIVE YOUR HOTEL WEBSITE THE ADVANTAGE
ADVANTAGE
GIVE DIRECT THE
Give your hotel website the advantage
over other online channels.
Managed correctly, your direct
channel has the lowest cost per
acquisition, and it should be your
biggest focus for rate growth.

When guests book directly, you get
two important benefits: you
save money and increase revenue
in the short term, and you have a
much bigger opportunity to acquire
loyalty and repeat bookings in the
long term.
How do you do it?

One easy way to promote direct bookings and achieve ADR
growth is to remove the Single room option from all channels
except your own site.
This will benefit you in a number of ways. Firstly, your website will truly
be offering a “Best Rate Guarantee“ for the Single room category, rather
than simply maintaining rate parity with OTAs.
It is important to note that won’t affect your parity agreements with
OTAs and other channels. The only change will be that you are only
offering a specific room category on your own site.

HOWEVER, A ROOM CATEGORY BY ITSELF IS NOT A REASON
TO BOOK DIRECT. YOU MUST ALSO OFFER A CLEAR,
COMPELLING AND UNIQUE REASON TO BOOK DIRECT.
These are different from your hotel’s overall selling points (e.g. free WiFi,
no booking fee, a free children’s club, and other things that should be
offered across all channels).

NET AFFINITY | NETAFFINITY.COM
BOOK DIRECT
GREAT REASONS TO
Free Breakfast
Early/Late Check In
Free Drinks or Chocolates on Arrival

AVAILABILITY
AVAILABILITY
LET'S TALK
Your availability strategy comes
with huge opportunities for
advantage.

AVAILABILITY
Review your lead time and cancellation percentages for
each channel.
Reconsider when you give availability to channels:
instead of giving them 12 months in advance of
inventory, try reducing it to 6 months.
Let your website sell your longer lead bookings, rather
than keeping long term availability on all channels.

AVAILABILITY
If you are a property with a high volume of
weddings bookings, consider implementing a
minimum stay policy to try and maximise the
shoulder nights. Offer package options to your
guests, rather than just your Best Available Bed
and Breakfast rate.
Net Affinity’s Wedding Packages solution offers
the perfect opportunity to do this. Any of our
hotels can create a unique wedding package
code within our Booking Engine that allows the
couple to give their guests that special code to
use when booking their rooms for the wedding.

GROUP BOOKINGS
BOOKINGS
GROUP
Ask these questions when you
discussed the group highlights for
Incentive, Corporate and Leisure:
Did you need them? Could you have
gotten more on the rate? Can you
push them to a different week next
year?

GROUP BOOKINGS
WHEN TO REVIEW:
Review week by week, 52 weeks in
advance, and try and make the jigsaw fit.
Remember: The greater the room block,
the more you can drive your Corporate
Rate – and, more importantly, your Best
Available Rate and Packages on your own
website.

GROUP BOOKINGS
GET CONFIRMED
BUSINESS ON THE
BOOKS EARLY.
THE FUNDAMENTAL GOAL IS TO
After that, you can adjust your rates accordingly to
maximize rate.

RATE GROWTH
ACHIEVING RATE
GROWTH IS A
CHALLENGE.
BUT THERE ARE KEY FACTORS AND
INFLUENCES FOR EVERY HOTEL.

RATE GROWTH
DO WE NEED THAT BUSINESS?
HOW MUCH DID IT REALLY
COST US?
COULD WE HAVE GOT MORE
ON THE RATE?
WHEN YOU ASK
THESE
QUESTIONS
SERIOUSLY,
YOU'LL COME UP
WITH
INNOVATIVE
SOLUTIONS.

RATE GROWTH
THANK
YOU!
FROM ALL OF US AT NET AFFINITY,
WE'RE EXPERTS IN HOTEL TECHNOLOGY AND
CONVERSION RATE GROWTH FOR HOTELS. IF
YOU'VE GOT QUESTIONS, EMAIL US AT
SALES@NETAFFINITY.COM

How do Hotels Grow Rates? 5 Strategies for Success

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