Increase your turnover: why is tracking your own numbers not enough?

When you work on a hotel, a lodge or apartments, when you launch a revenue management strategy the first step is obviously to be able to know your own performance and to monitor it.

But do you know that this is not enough?

Here's an example: I'm often told my occupancy rate is X%, that's not bad, what do you think?

My answer is always the same: if your occupancy rate is 80%, but your competitors all have 95%, that's not really a good performance.

If, on the other hand, you achieved a 65% occupancy rate while all your competitors achieved 50%, this is a very good performance!

This example perfectly illustrates the fact that making your decisions exclusively on your own numbers could cause you to make mistakes.

Here are 3 essential points to consider, apart from your own figures, which will take your strategy to the next level:

1 – Compare yourself to competitors to find additional revenue opportunities

This first point consists of looking at the past to learn lessons about the future.

Like the illustration given above, here we compare our own performance to that of competitors on the basic indicators: occupancy rate, average price, turnover and/or revpar.

Did you sell more than your competitors, but for less? Or conversely more expensive, but less in quantity? Ultimately, is their turnover and/or revpar better or worse?

So two cases are possible:

A) You are better than your competitors in turnover and/or revpar : in this case well done. Try to understand if it's because you sold more expensively than everyone else or better in quantity. In any case: note the strategy you put in place and continue there.

B) You are less good than your competitors in turnover and/or revpar : it is essential to try to understand why . Did you set prices too high? This allowed you to sell for more, but ultimately left empty nights/rooms. Or on the contrary, have you placed your rooms at too low a price? This allowed you to easily end up with an occupancy rate of 100%, but missing out on potential turnover (if you had set a higher price). Potential that your competitors have clearly identified.

How to do it concretely?

To get an idea of ​​the past performance of your competitors, several solutions exist. If you read my content frequently, you will have already come across my recommendations, but for newcomers, here is a reminder:

For Airbnb: Airdna is to date the best reference I could find for this type of data.

If you want to learn in more detail how to make Airdna your best ally to increase your turnover, don't miss my free webinar to learn how to use it.

For booking: certain specialized companies can offer you these figures for the hotels present on the site here is a list MKG consulting, STR or OTA insight. You will need to choose a group of competitors (at least 4/5).

2 – Understand the evolution of demand to know when to increase or lower your prices

A second very important point is to understand the overall demand of your market.

Your own figures only give you a very partial view of the trends. They are influenced by the strategy you have put in place and once complete, you are no longer requested and therefore no longer see whether the demand is important or not.

But what’s the point of knowing your city’s overall demand?

The more you have in mind the total level of demand, the more you will be able to adjust your prices accordingly (upwards or downwards). If demand is high, prices may be higher. And if, on the other hand, demand is lower, it is better to lower your prices to be sure to sell.

So, how do we know total demand (also called by experts: unconstrained demand)? Advanced statistical models make it possible to estimate it in large groups. But when you are not a large group (and you do not have several hundred thousand euros to invest in a tool), I offer the following solutions:

– If you are a hotel: note at reception the requests that you were unable to honor due to lack of room, with the desired reservation date and the call date

– If you have apartments: a time-consuming method can be to put an ad for leboncoin and note the dates for which you have the most requests

– Finally, follow the city's sales overall (including Airdna) to see fluctuations in demand. The possible tools are either paid or free data communicated by chambers of commerce or tourist offices.

Also discover my article on the 7 nuggets from Airdna to increase your turnover.

How to do it concretely?

When you have the numbers, here are the specific points to look at:

– What periods of the year benefit from the best trends and which periods are the worst? Maybe in months, in weeks? if you can, also look at the difference between weeks and weekends and above all try to understand what influences the fluctuation in demand: school holidays, events in your city, etc.

– What are the price differences between the weakest and strongest periods (or even events)

– Finally, compare what you found with your own prices. Are you sometimes much more expensive than the market without being able to fulfill? In this case, you have to lower your prices to sell more (ultimately, you gain in turnover). Are you sometimes much cheaper than the market during periods of high demand? In this case, you have to increase your prices to earn more.

3 – Anticipate the future to surpass your competitors and become leader in your city

Here is the most overlooked and least implemented key among real estate investors to outperform your market: anticipating the future.

But if, unlike your competitors, you take the trouble to do so, you are guaranteed to be one step ahead of them.

The method consists of looking at the past performance of your city (see point 1 of this article) and your own past performance and estimating what the level of demand will be over the weeks of the coming year.

Yes, you read correctly: I recommend you do it for the coming year.

As part of this exercise, a key point to consider is the change of date of major events. In many cities, the most important events can fluctuate slightly (or drastically) in terms of dates from one year to the next. So don't forget to check for the new date of the event for the coming year.

For example, if the exhibition had a strong week during the week of 11/12/18, but this year it takes place the week of 10/14/19: you must anticipate strong demand during the week of 14/10/19 and set a normal level of demand for the week of 12/11/19.

How to do it concretely?

When you study the figures and seek to anticipate the future you need to come up with something very simple: identify week by week (possibility of differentiating week and weekend depending on your activity) what the expected level of demand will be. .

This level of demand can be classified into 4 categories: low demand, medium demand, high demand, event demand.

So you just need to assign a level of demand to each week.

Thanks to this information, you know before anyone else what price level to place on the week concerned and do not risk missing an event which allows prices to increase.

Please note: if you are a hotelier, make your forecasts day by day with a precise and quantified occupancy rate.

You've probably already heard about Airdna's benefits to help you maximize your revenue.

But this surge of figures leaves you unmoved?

I share with you how I use this tool, with my 10 years of experience in revenue management, so that you are as comfortable as I am with Airdna.

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