3 ways to increase hotel bookings profitability by 36%

What if someone told you that you are currently missing out on an extra 36% profit when selling hotels?

That's exactly what I am going to share with you today: how you can STOP leaving money on the table when you sell hotel reservations.

The hotel selling landscape has multiple obstacles that prevent travel companies from maximizing their profit margins when they sell hotels to other travel companies or directly to the end-traveler.

In this article, we will review three immediate action items you can implement in order to enjoy the extra profit immediately.

Data-driven inventory

In an era when everything around us is driven by data and artificial intelligence, it is not surprising that companies who utilize their own data generate significantly more profits.

Thus, it is important to better understand your customers and adjust your product and inventory based on your existing customer base.

The most important part is to understand what type of product your customers are buying.

For example:

• What are the top destinations you are selling?
• Are you selling more city hotels or maybe most of your bookings are for all-inclusive resorts?
• Are you selling more boutique hotels or mainly hotel chains?
• What is the average length of stay and what is the ADR?

These data points will give you a better understanding on what type of inventory you should focus on improving.

Though most of you might think that it is better to add as many providers as possible, I believe that the key is to add the right providers that fit your business needs.

For example, if you will add on hundreds of new providers specializing in resorts, but your customers are only buying city vacations, the addition you just made will not increase your profitability at all.

Certain providers have better negotiated agreements in certain regions. While some suppliers specialize in all-inclusive resorts, others have better agreements with boutique hotels.

So, it is important to analyze the data of your customers and bookings in order to find which providers to add. Adding the right providers can significantly increase your profitability.

Use technology

Though you might have the desire to add multiple providers, you might not have an in-house development team to do so.

If you don't have the IT capacity to hook up to many suppliers, you should consider connecting to an IT Hub such as TravelgateX or DCS Plus, which connects you to hundreds of suppliers with a centralized solution.

In addition to facilitating connections to multiple hotel suppliers via the same IT platform, you can gain access to the IT Hub's supplier of products you are not currently selling, such as park entrances and railroad tickets.

Plus, many IT platforms offer tools to analyze your reservations and gain insight in order to improve performance.

Re-shop till the (prices) drop

The most important action that you can take in order to increase hotel booking profitability is re-shopping your hotel reservation.

Hotel prices tend to change AFTER you sell the hotel. Not once, not twice, but 22 times from the moment you sell the hotel until the last date of free cancellation.

So, even if you did a broad search across multiple providers and you got the best available rate at the moment of booking, you didn't necessarily get the best possible rate.

Especially in the current market situation, price fluctuations became more aggressive and more frequent due a large number of factors such as occupancy rates, cancellations and uncertainty in the market.

These factors cause significant post-booking price drops that can reach as much as 72% off the original price.

Even though it's common knowledge that hotel net prices change after you sold the reservation, most travel companies don't re-shop the reservation after it was sold.

One of the reasons that hotel prices fluctuate so much is due to the number of suppliers and availability. For any given hotel room, you can have tens of different suppliers offering the exact same room at difference prices.

As with any industry, the more competition you have, the more aggressive pricing will be. Most travel companies are connected to a limited number of hotel suppliers, and this limits their capability to obtaining the best available hotel price.

While most travel companies are trying to obtain a competitive edge acquiring a customer before they book their trip, they are neglecting an effortless way to increase revenues from customers to whom they ALREADY sold hotels to.

By now it's clear that:

1. Hotel prices tend to change after you sell the hotel.
2. Re-shopping an existing hotel reservation can increase your profit margin significantly.

Theoretically, travel companies can re-shop their reservations manually. Those that try invest a lot of money and human resources in 24/7 price monitoring for all their reservations over their different providers.

Even then, they are limited to checking prices only on existing providers and still incur many human errors and inconsistencies that are caused when trying to map the same rooms across different providers. Manual room mapping is a terrible headache.

Comparing the room types over the different providers can result in a list of hundreds of different names for the exact same room which makes this manual room mapping inefficient and nearly impossible.

However, you can automate this process with an artificial intelligence driven solution that can help you do all the work, automatically and risk free with no-hassle.

Pruvo Revenue Maker offers a zero risk, hotel post-booking profit optimization service that utilizes artificial intelligence and big data in order to automatically track hotel bookings you made on any provider, monitor their price 24/7 and help you increase your profitability by 36% on average by rebooking those reservations when their net price drops.

Pruvo's secret sauce is composed of three ingredients:

1. Pruvo Revenue Maker allows you to customize the solution to your company's specific needs. For example, you can choose between multiple rebooking methods, decide which providers you want Pruvo to track and which you don't, decide upon the maximum amount of re-bookings per reservation and much more.
2. Pruvo Revenue Maker's artificial intelligence room mapping algorithm is capable of not only comparing the same room over different providers but also finds upgraded rooms (at a lower cost) for your customer.
3. Pruvo is the only company that not only helps increase profitability, but also generates new hotel sales via its vast customer base.

One of the common obstacles to implementing technological solutions is the integration and development required, which can intimidate companies with limited IT capacity or companies that have many development projects in their pipeline.

With that in mind, Pruvo developed a unique integration model that allows Pruvo to do the majority of the integration work on their end. This way, partners benefit from a lightning fast integration period and can go live with the solution within 14 days.

In order to facilitate an even faster integration period, Pruvo has partnered with IT platforms such as TravelgateX, DCS Plus, Parsec and IT4T Solutions in order to eliminate any integration time needed for customers of these IT platforms and allowing to go live immediately.

Conclusion

It is important to focus on technological solutions that bring new capabilities in the field of profit optimization and product improvements.

Competing in customer acquisition prior to booking a hotel is an expensive endeavor.

However, Pruvo Revenue Maker 's post-booking price optimization is a risk free, cost effective method to significantly increase your company’s hotel booking profit and scale your company to the next level.