Strategy to Drive Incremental Revenue

About the Property:

Waterfront independent boutique hotel located in Cape Cod, MA with limited amenities. Given the location, the property’s revenue was heavily seasonal and capturing incremental revenue would be critical to hotel’s financial success. However, the hotel lacked the capabilities to drive incremental revenue and needed the help of experts.

Our Work:

Our focus was to create structure and organize the team’s approach to pricing and upselling of their room suites to drive incremental revenue. The hotel would upsell room suites at check-in with no consistency in pricing and restricted online booking of suites to a limited set of channels. As a result, the hotel was missing out on revenue opportunity.

First, we defined the seasonality of the hotel (Peak, Shoulder, and Off-Peak seasons). Second, we did a competitive study of the rate differential the competitors were selling for similar room types in these seasons. We found the rate differentials were the same at all competitor hotels. We wanted to establish the range of rates the competitors were offering for 1 bedroom, 2 bedroom and 3-bedroom suites in the area. Third, we then set up a grid with all room types and seasons. We then assigned rate differentials based on season and room type. Fourth, we made suites available on all distribution channels, including online travel agents (OTAs).

Our impact:

The hotel’s pricing of room suites are now based on seasons. For example, a 1-bedroom suite would be priced as:

• Off Season: $100 higher than the best available rate (BAR) per night

• Shoulder Season: $150 higher than BAR per night

• Peak Season: $300 higher than BAR per night

By optimizing distribution channels and implementing a consistent pricing strategy, the hotel has increased suites online bookings of suites, rather than depending on upselling at the front desk and the hotel is in a more competitive position when guests are price shopping for suites.